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The following is an example of how supply and demand in the real estate market is price-point dependent, The information specifically relates to East Orange, NJ, but similar information can be developed from any north Jersey town. Contact Brian McCabe (973-865-1863) for more information.
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Is East Orange a tough market for sellers?
It all depends on the price point, says Realtor.
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It’s not easy to be upbeat about selling a single-family home when there are 185 single family houses on the market and relatively few are getting sold. Then again, things are not always as they appear to be.
The first thing to realize is that a real estate market…just like any market…operates on supply and demand. Lots of buyers combined with a low inventory of houses for sale means high prices and fast sales. That’s not the way it is in East Orange, right now:.
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Houses Sold in Past 6 Months
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Monthly Sales Rate
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Active Listings (Inventory)
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Months Required to Sell Inventory
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Here's how to interpret the above table; with a sales rate of 9.3 homes per month (demand), it will take an estimated 19.9 months to sell the current inventory of 185 houses (supply). That’s not good, especially since it assumes that no new listings will come on the market, which is a very unlikely possibility.
The second thing to realize is that even though is a tough market for sellers, there are price points within East Orange that are far less tough and maybe your house is in one of them.
Here is an actual market analysis for a seller with a home in the $224,500 - $244,000 price point in East Orange. The seller’s goal is to go under contract within 6 months. All of the information is derived from actual East Orange sales as reported by the Garden State Multiple Listing Service.
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Data for table as of June 30, 2011
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Seller Requirements
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Seller's desired price point
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Seller's sales goal:
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Under contract within 6 months
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The Market
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Recent sales in seller's price point (past 6 months)
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Recent sales that went under contract within 6 months
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Active listings in the seller's price point
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Sales Goal Evaluation
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Mathematical chance of meeting 6 month sales goal
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Other active listings to be better than to meet 6 months sales goal
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Hyperlocal market Analysis
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| Hyperlocal Market Analysis |
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The $224,500 - $244,000 price point affords this seller a 30% chance to go under contract within 6 months. In fact, if the seller’s house has a better perceived value than 7 of the 10 active listings in the seller's price point, the chance of it going under contract within 6 months rises from 30% to virtually 100%.
The third thing to realize is that an analysis like this is based on numbers, only: it does not take into account subjective factors that play a key role in the sale of any property. That said, numbers are at the heart of every market, regardless of whether it’s the market for Pampers, jet planes or houses. Moreover, trying to sell a house in the absence of market information such as this can leave a lot of money on the table and, as a seller, that's the last thing you want to do.
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My name is Brian McCabe. I am a licensed Realtor with Coldwell Banker Residential Brokerage (973-226-2577) and I am available to speak to church and civic groups about residential real estate markets in North Jersey and, of course, I invite your business..
You can reach me directly at 973-865-1863 (cell), bmccabe362@wessex-homes.com (email), or at 973-226-2577 (office).
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