The real estate market in Hillsborough took a step back in September, unlike the Somerset County market as a whole.  Part of the problem is the fact that Hillsborough right now has nearly a quarter of its listings in the $750,000+ price range, a range not noted for its strength currently.  Additionally, of those 60 or so listings above three-quarters of a million dollars, the overwhelming majority are new construction, including Toll Brothers developments, a Beazer Homes development, and several smaller builders with big expectations.  As a consequence of this relative glut of new construction (which builders re-submit to the MLS periodically), the absorption rate has risen to 10.2 months, compared to 7.8 months last year, the supply/demand ratio has sunk to 39%, compared to 55% last year.  That includes re-sales as well as new construction.

However, there is good news in the market.  Last year at this time the entry-level (under $300,000) was in bad shape.  There were 88 listings and just 12 pendings at that time.  This year, entry-level homes are selling much better - with 87 active listings, there are 35 pendings - nearly three times the number of October 2008.  That price level and the next one up ($300-500,000) are now very strong.  This activity suggests that the first-time home buyer tax credit plan is working, driving the market for entry-level and first trade-up buyers.

Generally, if the new construction is factored out of the market in Hillsborough, the absorption rate is a couple of months better.  And just to make a point of why to factor it out, builders may put in their entire development - anywhere from a handful to fifteen homes - in essence, competing with themselves, and increasing absorption rates and decreasing supply/demand numbers.

Anyway, the Hillsborough market bears watching over the next couple of months, since there usually is a seasonal retreat, but there may be an improvement over the market of a year ago.

With the release today by the National Association of Realtors® of their cheerless report on the "national market," showing a decline of 2.7% in sales from July to August, it is important to observe that Hillsborough, NJ bucked that trend.

In August of this year there were 37 sales made, compared to 36 in July of this year, and 36 in August of last year.  This year the market seems to be on the rise, while last year at this time the market was spiraling downward.  From May through August this year we have seen a steady, but small increase in sales made.  Even more important, the absorption rate continues to decline, moving closed to the "balanced market" which is usually regarded as a six-month supply.  It is currently 6.8 months, after a disastrous January that say a 20.6 month supply.  That was ugly.

The median sale price so far this year is $330,000, compared to $345,000 for all of last year, a 4.3% decline overall.  The inventory of unsold properties is within two units of last year at this time.  So, are we seeing a reply of last year?  I'm inclined to say no.  The death spiral of last year was in the opposite direction of what we're seeing right now.

Who can accurately predict the market in Hillsborough?  No one.  However, if you're thinking of buying or selling now, it is best if you have a market-knowledgeable Realtor® on your side.  Any names come to mind? 

Compared to the first two quarters of 2008, this year's numbers in Hillsborough look dreadful.  The number of sales is down nearly 27%, and the median price is down 17%.  A pretty grisly picture in light of recently-released national numbers. 

However, comparing second quarter 2009 to second quarter 2008, the picture brightens considerably.  The difference in the number of closings 2008 vs. 2009 is less than 2%, and median price difference is less than 7.5%.  This points up the fact that the first quarter of 2009 in Hillsborough was terrible, really terrible, with less than half the number of sales for the same period in 2008.  Keep in mind that the market in 2008 was starting to decline, and the market in 2009 seems to be improving.  The two curves probably crossed in June.

In general, economic news has not been encouraging.  But interest rates have been very favorable for the past month or so (until this week, when they inched up at bit).  Assuming the national economy, and more importantly, the local economy, begins to improve - it seems to have hit bottom - we will see increased real estate activity as people feel more secure in their jobs. 

There are good homes at good prices to be found in Hillsborough.  Keep in mind that the first-time homebuyers $8000 tax credit expires December 1.  It's time for buyers to dislodge themselves from their fence.