What to Make of Conflicting New Jersey Real Estate Data

By Richard Barrington
Local Lender Columnist
May 16, 2008
So you've done some mortgage calculations and figured out how much house you can afford. Now you are scanning the New Jersey housing market for potential bargains. You are taken aback by some news that seems contradictory at first: the number of New Jersey home sales is falling at a double-digit annual rate, and yet home prices have remained relatively flat.

What Sales Rates and Price Data Means to You

Sales volume (the rate at which homes are sold) and home prices are somewhat related, but there are also a number of other variables at work which can cause volume and price to change at very different rates.

So maybe there aren't across-the-board price markdowns waiting for you. Even so, the New Jersey housing data is useful to buyers in a couple of ways.

First, you have a stronger bargaining position than the seller. Lower volume means houses sit on the market longer, which makes sellers nervous. Nervous sellers are more ready to make concessions on price and other considerations. Those other considerations are one reason that price data can be a little misleading--in a soft housing market, sellers can find other ways of creating incentives for buyers, such as throwing in appliances.

Second, remember that housing trends vary greatly from town to town. Look at what's going on in different regions, and you may get a better sense of where the bargains are.

Mortgage Rates are Another Variable to Track

While you track sales volume and home price data, don't forget that mortgage rates are another important variable to watch. Mortgage rates vary from week to week, and this can affect your target home price. Keeping up with all this data will make you the best kind of buyer--an informed buyer.

Source:
The Newark Star-Ledger

About the Author
Richard Barrington is a freelance writer and novelist who previously spent over twenty years as an investment industry executive.