New construction is very much available in Hillsborough, New Jersey.  In fact, it constitutes nearly 18% of all active listings in the Garden State Multiple Listing Service (GSMLS).  There are nine separate developments by seven different builders, ranging from the large, national, Toll Brothers and Beazer, down to smaller local builders.

Among the larger builders, Beazer is at the low end in price, starting at $664,900, with Parkside at Mountainview - 8 homes available in GSMLS.  Toll Brothers has three developments in Hillsborough, The Preserve, Hillsborough Chase and Roycebrook Meadows, with 24 homes in the three listed in GSMLS. Among the other developments are Distinctive Domains (3), Colonial Square (4), High Branch Estates (5), Country Classics (2) and Hidden Forest (1).  These eight new home developments constitute the majority (65%)of homes in $600,000+ price range.

The overwhelming presence of new construction in Hillsborough demonstrates just how slim the selection of homes is becoming, since there are only 217 "resales" available.  More importantly, that means that there are only 217 homes under that $600,000 mark, which is the middle of the middle price range ($500,000-750,000). 

It may sound strange, but without more inventory in the under $600,000 price range, the steady market recovery in Hillsborough could stall.

The Hillsborough, New Jersey real estate market is clearly improving on a month-to-month basis.  Even though the number of sales is off 2007's pace, average sale prices are up, absorption rates (how long it would take to sell off all active listings)continue to drop, and supply/demand ratios (the ratio of new sales to new listings) are climbing.

The first two quarters of 2008 in Hillsborough, New Jersey, show some interesting trends in the real estate market.  Most obviously, the first quarter, compared to the same period in 2007, saw "sales made" numbers down 27%, and "sales closed" down 16%.  The second quarter saw an improvement in the market, but sales made was still down 12% over the same period in 2007, and sales closed were down 29% (reflecting the leading indicator of sales made in Q1).  Overall, the first six months of 2008 saw a combined 19% decline in sales made and a 24% decline in sales closed.  The average absorption rate in the first two quarters of 2008 is 7.01 months, compared to 2007, when it was 5.63 months.  However, in June of 2008, that rate fell to 5.0 months, the lowest since April of 2007, when it was just 4.7.

When we look at sale prices, the news is much better - if you're a seller.  The average sale price in the two quarters of 2007 in Hillsborough was $368,332.  In the first two quarters of 2008, that rose to $382,679, up nearly 4%.  This does not mean that every property in Hillsborough increased in value by that amount, but rather that higher-priced homes seem to be selling, compared to 2007.  Moreover, the number of active listings on July 1 of this year - 268 - is considerably lower than last year's 309.  Properties are selling and are not necessarily being replaced in the market.

Clearly, my advice to buyers is to move quickly to purchase the declining number of properties available.  If interest rates go up again, purchase power will decline, especially in the face of possible increases in properties prices.

 Here's a graphic comparison of some key numbers having to do with the real estate market in Somerset County, New Jersey, year-on-year for June (with active listing numbers representing  those on July 1). S/D stands for supply/demand ratio, the number of sales made in the month divided by the number of new listings taken.  Avg SP is the average selling price for properties closed, Avg DOM is average number of days on the market for properties closed, and Avg SP/LP% is the average ratio of selling price to list price.