Morristown NJ Real Estate 2011 Annual Market Report

Find out the latest real estate market information for Morristown 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 Morristown NJ real estate market. If you are considering buying and or selling a home in 2012 in Morristown 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.

Morristown NJ Real Estate 2011 Annual Market Report

Closed Sales and Listings in Morristown NJ from 2005 through 2011

As you can see from the chart above the volume of  Closed Sales in Morristown has been trending steadily downward for the past 7 consecutive years, with Listings doing the same for the past 4 years. This is mixed news at best for the Morristown real estate market. Inventory has increased modestly by 9% from this same time last year up from 11.2 to 12.2 months, which is a step in the wrong 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 12 months to sell all of Morristown‘s current inventory. This figure indicates that Morristown, like some of the surrounding towns is experiencing what we call a strong “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.

Morristown NJ Real Estate 2011 Annual Market Report

Average and Median Sale Price in Morristown NJ from 2005 through 2011

The chart above indicates a somewhat steady level in the Sale Price of homes in Morristown NJ over the past 7 years from highs in the mid $400’s to lows near $400K. Based on the reasonable and consistent pace of Closed Sales, it is safe to assume that prices are not far off from true market value, however it would help reduce the current inventory if sellers made the adjustment. Incorrect pricing causes inventory to rise, and listings to become “stale” because they are on the market much longer than the norm, resulting in a stagnant local market condition like the one we are currently experiencing. Based on the excess amount of inventory, I would expect to see prices in Morristown continue to decline moderately, at least for the short term until some of the older inventory is finally sold off or withdrawn from the market.

Morristown NJ Real Estate 2011 Annual Market Report

Average and Median List to Sale Price Ratio in Morristown 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 Morristown are pricing their homes 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, 2005 saw the smallest gaps in the past 7 years between the List Price and Sell Price with sellers discounting a mere 1% to 1.5% off of their price. The current ratio is much higher with sellers discounting on average between 4.5% and 5.8% in order to sell their homes in this market.

Morristown NJ Real Estate 2011 Annual Market Report

Average and Median Days on Market in Morristown 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 average number of Days on Market for 2011 was the lowest it has been in the past 3 years. Perhaps this was caused in part by those sellers who ended up offering those 4.5% to 5.8% discounts in order to get their homes sold resulting in some of the older inventory getting cleared out.

Morristown NJ Real Estate 2011 Annual Market Report

Rolling 13 Month Listing and Sold Activity in Morristown 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 and Closed Sales in December 2011 is nearly the same as it was in December of 2010, which indicates no immediate changes at least for the short term.

 

What does the Morristown 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.

 


For more information on Morristown including its schools, follow this link:

 

How to find Listings on your own:

For listings or information on Morristown 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 Morris TownshipMadison, 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.

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