Far Hills NJ Real Estate 2011 Annual Market Report

Find out the latest real estate market information for Far Hills NJ through 2011 in addition to a look back at the years in between to 2005. See what the trends are indicating and what is next for the Far Hills NJ real estate market. If you are considering buying and or selling a home in 2012 in Far Hills NJ, this valuable annual market report is an absolute must read.

Attention… all residential real estate is local! Not everything you read about online, in the papers and hear through major media outlets about the housing market is correct or relevant, especially when information is presented on a “national” or “regional” basis. There are many factors that make up the differences in local real estate markets, even from town to town and especially in a state like New Jersey with its inordinate amount of municipalities making it a challenge for some to drill down and obtain the correct market value of any given home. This is why it is important for both buyers and sellers to start with the latest “local” market data before they make any real estate decisions.

Far Hills NJ Real Estate 2011 Annual Market Report

Closed Sales and Listings in Far Hills NJ from 2005 through 2011

As you can see from the chart above the volume of  Closed Sales in Far Hills has been a bit of a mixed bag. The good news is that 2011 saw the most homes sold in past 6 years. The amount of Listings has been unusually high in recent years, although, inventory has decreased significantly by 30% from this same time last year down from 15.2 to 10.6 months, which is a step in the right direction. Simply stated, “inventory” represents the number of homes currently available or For Sale in a given market, or in this case a specific town. This means that with all things remaining equal, at the current rate of sales, it will take a little more than 10 1/2 months to sell all of Far Hills current inventory. This figure indicates that Far Hills, like many of the surrounding towns is experiencing what we call a “Buyer’s Market” and will remain so for at least the short term. A buyer’s market is considered to be a market with an inventory of 7 or more months worth of homes to sell at any given time. With more homes to choose from, not to mention record low interest rates and low prices, things remain very advantageous to buyers right now. A “Balanced” or normal market is considered to have 5 to 6 months worth of inventory with no distinct advantage to either Buyers or Sellers.

Far Hills NJ Real Estate 2011 Annual Market Report

Average and Median Sale Price in Far Hills NJ from 2005 through 2011

The chart above indicates a rather volatile trend in both the Average and Median Sale Prices in Far Hills NJ over the past 7 years. The volatility is primarily due to two factors: the limited amount of homes For Sale in such a small town such as Far Hills in addition to the huge disparity in price ranges within this market. As a result, when a few of the higher priced estates sell, it has a significant impact on the data. Conversely, the same holds true for when there are long periods without a sale of some larger homes driving these numbers downward. Based on the excess amount of inventory, I would expect to see prices in Far Hills continue to decline at least for the short term.

Far Hills NJ Real Estate 2011 Annual Market Report

Average and Median List to Sale Price Ratio in Far Hills NJ from 2005 through 2011

Sale to List Price ratio is the difference between a home being sold at full asking price and what a buyer actually paid for the home. The higher the ratio indicates that sellers are pricing their homes closer to what the correct or true market value will bear. Recent trending indicates sellers in Far Hills are pricing their homes significantly above market value, which is causing them to spend more time on the market resulting in less money at closing. According to the chart above, 2010 and 2011 saw the widest gaps between the List Price and Sell Price with sellers having to discount up to 11% in order to sell. This gap represents the largest of its kind amongst the 4 other towns in Somerset Hills and I expect it to remain that way until sellers in Far Hills get more serious about pricing their homes correctly.

Far Hills NJ Real Estate 2011 Annual Market Report

Average and Median Days on Market in Far Hills NJ from 2005 through 2011

While this metric (the number of days a home is on the market) can be a bit misleading based on the way the data is reported on the Multiple Listing System, it does provide a broad indicator of current market conditions. The longer it takes to sell a home, the lower the price it will bring and vice versa. The data from this chart is directly proportional to the information contained in the previous chart (List to Sale Price Ratio). Pricing homes too high has resulted in an abnormally high amount of Days on Market which prohibits the market from moving forward. The good news here is that the amount of Days on Market for 2011 was the lowest it has been in the past 7 years. Perhaps this was caused in part by those sellers who ended up offering those 11% discounts in order to get their homes sold resulting in some of the older inventory getting cleared out.

Far Hills NJ Real Estate 2011 Annual Market Report

Rolling 13 Month Listing and Sold Activity in Far Hills NJ

Unlike the previous charts, the chart directly above focuses entirely on 2011 on a month to month basis of Listings and Sales activity. As you can see, the amount of Listings in December 2011 is lower than it was in December of 2010, however there were zero Closed Sales in 2011 as compared to 5 in 2010 offsetting any difference.

 

What does the Far Hills real estate market hold for 2012?

While it is impossible to make any long term predictions regarding the residential real estate market, especially at the national level, more experts and real estate prognosticators appear to agree (more so than in any of the previous 5 to 7 years) that 2012 may be the year the market finally hits the bottom in terms of pricing. In addition, there is a pent up amount of demand in terms of both buyers and sellers who have been sitting on the sidelines for a long time now with their plans on hold (in some cases up to  several years) who now feel they need to make a decision and get on with their lives.

Many of us would like to have the ability to time the market perfectly in order to avoid selling at the bottom or in the case of buyers to do exactly the opposite. Unfortunately, the rate at which information is gathered, (especially for real estate) does not lend itself to such timely decision making scenarios. It may take anywhere up to 6 to 12 months before we will know for sure when the market finally begins to reverse itself and by that time the opportunity to time the market will be lost.

Far Hills has not weathered the real estate downturn as well as some of its neighbors in Somerset Hills. A high inventory of homes currently for sale, coupled with incorrect pricing is causing this local market to delay its recovery to return to a more “balanced” level where both Buyers and Sellers benefit.

 

For more information on Far Hills including its award winning schools, follow this link:

 

How to find Listings on your own:

For listings or information on Far Hills NJ or any of the surrounding towns in Somerset County, parts of  Hunterdon, or Morris County simply use the search tools located on the right side of this page.  All listings are updated throughout the day so be sure to come back often for the most current information.  If you are unable to find what you are looking for using the search functions on this website, or you are looking for a home that is unique with specific features, feel free to contact me direct and let me know exactly what they are.  My colleagues and I preview all kinds of properties each week and will be sure to identify just what you are looking for.  In addition, my office often features “exclusive” listings that are not released to the public that might be of interest to you as well.  I will be glad to answer all of your questions and arrange to show you the homes of your choice at a time convenient to your schedule.

I also serve the surrounding towns in northern Somerset County including Basking Ridge, Bedminster, Bedminster and Peapack Gladstone as well as select towns in Morris County including Morristown, Morris Township, Madison, the Chathams, the Mendhams, the Chesters and Long Valley (Washington Township) along with the Hunterdon County towns of Lebanon and Tewksbury Townships.

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