SP-F Home Sales Continued to Rise in Third Quarter

Scotch Plains-Fanwood home sales were higher during the 3rd quarter of this year compared to the same period in 2008, but home prices still remain lower than they were before.

Here are the raw numbers:

3rd Quarter 2009

Closed Sales: 101

Average Sales Price: $452,008

Average Days on Market: 66

Sale Price to List Price Ratio: 95.3 percent

3rd Quarter 2008

Closed Sales: 91

Average Sales Price: $504,572

Average Days on Market: 66

Sale Price to List Price Ratio: 96.5 percent

So what does this mean for homeowners and people considering a home purchase in Scotch Plains-Fanwood? Well, quite simply there are signs that the market continues to stabilize, but still will take some time to level out.

The SP-F market was considerably more active in Q3 2009 than one year ago. The number of transactions increased by 11 percent. However, it’s worth noting that the average sales price did still decline by 10 percent. This decline in price is due in large part to the supply of homes on the market still being higher than the demand, and the decline is consistent with what our last report showed for the “year to date” numbers. The difference between supply and demand is shrinking due to the increase in sales transactions, which should lead to price stabilization if the trend continues.

This increase in number of transactions can be likely attributed in part to the first time homebuyer $8000 tax credit that is set to expire on Nov. 30. Many first time homebuyers decided to make a purchase this year due to this incentive. Also, mortgage financing became less restrictive than a year ago during the worst of the financial market challenges. Also, very low interest rates in the 2nd and 3rd quarters of 2009 helped improve affordability and purchasing power of buyers.

Congress is currently debating whether or not to extend/expand the first time homebuyer tax credit, and this decision will likely have a sizable effect on the residential real estate market. If they extend or expand the credit, sales are likely to remain strong. If the credit expires, it may cause a short term slowdown in sales activity until more job creation spurs more home purchases.

Sean Carroll is Team Leader of “Team Carroll” at RE/MAX Classic Group, and can be reached via phone at 908-376-1569, by email at Sean@TeamCarrollNJ.com,  or via the web at www.TeamCarrollNJ.com