What's Happening in Cranford Real Estate?

With all of the news media reports about the "national economy," and the "national real estate market," it is very difficult to decipher exactly what that means for towns like Cranford.

There really is no such thing as a national real estate market, as people who purchase homes in a community often work in that community, or within commuting distance. This means that they earn money locally, and usually spend that money locally. The national media often reports on national statistics, and while they can be helpful to uncover trends in the macroeconomy, it is important to understand that the real estate market, and even the economy are highly localized, and can vary tremendously from one state to the next, or even one town to the next. 

I thought it would be helpful to share what’s happening now, while also comparing it to historical data, to illustrate how Cranford real estate has performed from its peak of 2005-06 to the present. Whether you are buying or selling, or just live in Cranford, this information can help you better understand how the recent recession has affected the local picture.

Here are some Cranford, NJ, real estate statistics:

January through Sept. 15, 2009

Active Listings: 962

Closed Transactions: 119

Average Days on Market (DOM): 65

Average Sold Price: $428,272

Average Final List Price: $437,684

Sales Price to List Price Ratio: 96 percent

These statistics don’t mean much unless compared with other periods in time, to see how the market is trending. So, let’s compare with the same period 2008.

January through Sept. 15, 2008 

Active Listings: 917

Closed Transactions: 144

Average DOM: 68

Average Sold Price: $444,374

Average Final List Price: $461,633

Sales Price to List Price Ratio: 96 percent

What does all of this mean?

Well, in looking at the averages, here are some factual conclusions:

1. Average Sales Price declined by approximately 3.7 percent
   
2. Number of closed transactions declined by approximately 13 percent
   
3. Number of active listings increased by nearly 5 percent
   

In summary, with gradual price declines, and substantial increase in listings for sale, it demonstrates that thus far, 2009 was more of a buyer’s market for Cranford than 2008.

Examining the numbers in more detail showed a steep decline in listings sold in February and March of 2009, as this was the height of the financial crisis on Wall Street, started by the collapse of Lehman Brothers in September of 2008. After beginning the second quarter of 2009, the home sales stabilized in Cranford again, and much of the decline in price occurred in a short period of time at the beginning of this year.

Here is one more comparison. When we compare the 2009 data with data from the peak of the market in 2005, here is how the 2009 market compares:

Number of Closed Transactions: Decline of 45 percent since 2005

Average Sales Price: Decline of 10.4 percent since 2005

Sold Price to List Price Ratio: Decline from 99 percent to 96 percent 

Active Listings for Sale: Increase of 38 percent

Here is another very important statistic, which is number of expired listings which failed to sell:

2004 – 6 expired listings

2005 – 15 expired listings

2006 – 23 expired listings

2007 – 43 expired listings

2008 – 50 expired listings

To help you understand what all of this means, here are some general observations when examining this data:

1. Cranford sellers who price their homes competitively and at today’s market value will sell their homes successfully in approximately 65 days, for approximately 96 percent of list price
2. Sellers who overprice their homes are nine times more likely not to sell their home than at the market peak.
3. These numbers are averages only. Homes for first time buyers have been selling more strongly than “move up” homes, and the price declines in homes priced from $500,000 to $800,000 have been more severe than the less expensive homes. Be sure to get an accurate market analysis or appraisal before listing your home for sale.
4. Cranford buyers will be purchasing their home today at anywhere from a 10-20 percent lower price than they would have had just a few years back, depending upon the price range of the home they are buying. If a home is properly priced, there will likely be high interest, so offer fairly. If the home is not priced properly, use the comparable data to negotiate the best possible price.
5. Cranford has remained a stronger market than many other local towns because of the strong school system, access to transportation, and limited “investment, or speculative” buying during the real estate boom. The primary driver of the market and prices going forward will be employment, both locally and in New York City.

Thanks for reading, and check back next month for more Cranford real estate market news.

For comment, or for more information about the local real estate market in Cranford, Sean Carroll can be reached at 908-376-1569, or via email at Sean@TeamCarrollNJ.com 

Sean Carroll is a Cranford realtor for RE/MAX. He is part of Team Carroll Real Estate Professionals.