Find out the latest real estate market information for Madison 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 Madison NJ real estate market. If you are considering buying and or selling a home in 2012 in Madison 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.
As you can see from the chart above the volume of Listings in Madison have declined steadily over the past 4 years. Inventory has decreased slightly by 6% from this same time last year down from 5.3 to 5 months, which is bordering on moving from a “balanced” or normal market into what is referred to as a “seller’s” market. This would be quite unusual, given the regional and national state of the market where many areas remain in a strong “buyer’s” market environment, once again proving the point that all real estate is LOCAL. 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 approximately 5 months to sell all of Madison‘s current inventory. By all accounts, this data indicates that the real estate market in Madison is extremely robust and thriving, and should remain this way at least for the short term.
The chart above indicates a somewhat steady level in the Sale Price of homes in Madison NJ over the past 4 years in particular from the high $700’s to the mid $600’s. Based on the reasonable and consistent pace of Closed Sales, it is apparent that sellers are pricing their homes not far off from true market value. Based on the current trend of declining inventory, I would expect to see prices in Madison begin to edge up in 2012.
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 Madison are pricing their homes close to market value, resulting in more money at closing. According to the chart above, 2005 saw the smallest gaps in the past 7 years between the List Price and Sell Price with sellers discounting a mere .5% to 1.1% off of their price. The current ratio is slightly higher with sellers discounting on average of 4% in order to sell their homes in this market.
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 correctly has resulted in a steady downward trend for the past 4 years in the amount of Days on Market which will help to reduce inventory even further and result in higher demand and higher prices for sellers.
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 down by 17% from December of 2010 with Closed Sales remaining the same for the period. The data is currently trending in the direction of a “Seller’s” market condition.
What does the Madison 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.
Madison has always been a strong real estate market primarily due to its location, great schools, access to NYC train service, and its traditional Main Street USA downtown district. It has weathered the real estate downturn in fine shape and is showing many signs of leading not only itself but the surrounding towns out of the storm and into more smoother waters.
For listings or information on Madison NJ or any of the surrounding towns in Morris, Somerset or parts of Hunterdon 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 Morris County including Morristown, Madison, the Chathams, the Mendhams, the Chesters and Long Valley (Washington Township), as well as select towns in northern Somerset County including Basking Ridge, Bernardsville, Bedminster, Peapack Gladstone and Far Hills along with the Hunterdon County towns of Lebanon and Tewksbury Townships.