Monmouth County 2007 vs 2008 Market Activity Comparison

While the real estate picture on a national scale remains a less than pretty sight, looking at this past year's activity relative to the previous year, we get a much less dire view: Monmouth County 2007 vs 2008

• Sales Volume: about 21% fewer homes sold in 2008 than 2007 (5036/3966)
• Available Inventory: remains the same with less than 1/2% point difference (4357/4336).
• Median Sale Price: the median sale price across the county came down only about 5.5% ($450K/$425K)

What does this mean? Well, we certainly have much less demand, more than 20% fewer buyers were actually closing deals this past year... a significant drop. The available inventory however remained pretty much the same... many sellers who didn't have to sell decided to wait and took their home off the market. While the reduced demand didn't impact available supply, it did impact pricing. But I bet you're surprised by the less than 6% reduction in median sale price. Given the national media coverage of real estate, most people assume double digit reductions.

Further price & value erosion is likely to continue during 2009 unless some of the actions being taken by the federal government are able to balance the equation somewhat, but I would invite you to consider that the low interest rates being offered for primary residence conforming mortgages (under $625,000) mean savings that are much, much greater than an anticipated few percentage point reduction in purchase price. If you factor a similar pattern for 2009, we're looking at about a 1/2 % monthly reduction in price ($2500 savings on a $500,000 home) vs. 9% savings with a mortgage rate reduction of 1%.

Translation? Don't be so afraid to jump in the pool! There are many sellers eager to sell and while this may not indicate that a fire sale is taking place, you'll be grateful you locked in to such a low mortgage rate when you did.