The real estate market in Hillsborough, New Jersey, a distant (50 miles) suburb of New York City and Philadelphia (60 miles), continues to move along in spite of media hype about the "national market."  It is a bright spot in Somerset County, where the market stalled a bit in May.

Absorption rate.  For the fourth straight month the number of months that it would take to sell all inventory without adding any new has declined.  This is a very positive fact. The current rate is 6.6 months, compared to the County's rate of 9.0 months.  Six months is usually considered a market in balance.  The May 2007 rate was 5.7 months, the May 2006 rate was 4.0 months.

The supply/demand ratio.  The ratio of sales made (but not necessarily closed) to listings taken is at 47%, down from 60% in April, but for the year to date it is 49%.  A rising s/d ratio is a good indicator of future sales activity.

In May, 42 sales were made in Hillsborough, and 89 listings taken.  Comparable numbers in 2007 were 55 and 127, so sales are off about 24%, listings 30% over last year's May.

Hillsborough clearly is a good market in Somerset County, and seems to be more attractive to buyers than the County as a whole.

The numbers are in for May, and the picture for Somerset County is not as rosy as it could be, but of course in light of $4.00/gallon gas has many people in a tizzy.

Supply/demand ratio.  The ratio of new sales (not closed) to new listings dropped a bit from April, from 43% to 41%; in May 2007 that number was 47%, in 2006 45%, so it seems to be within the ballpark this year.  The negative here is that it is the first time since December that the number has not risen.

Absorption rate.  The number of months it would take to sell out existing inventory without adding any new listings rose to 9 months from 8 months in April.  Again, after four months of continuing improvement, we saw an uptick in this important number.  Last year at this time (before the mortgage unpleasantness of August) we were at 6.2 months, and in 2006, 6.0 months.  Six months absorption rate indicates a market "in balance."

Inventory.  On June 1, 2008 there were 2645 properties for sale in Somerset County, the highest number since October 2006 (2650).  However, the number of new listings taken in May was 717, compared to 761 in May 2007 and 933 in May 2006.  So, fewer homes are coming on the market than in preceding years.

What is interesting about these numbers is that several communities in Somerset County outperformed the County as  whole.  For example, Hillsborough and Bridgewater.  More about them tomorrow.