Hi Susie. I like your new haircut.
<laugh> Thank you! It’s been a minute again. It’s been a busy summer busier than we anticipated. We did have a hot minute where we got to take a breath. But it’s good news for everyone that the market is still very lively. So we thought we would just address the question … the perennial question we get at every conversation we have on the corner, at the cocktail parties … How’s the market? How’s the market, Bonnie?
Well, that depends, Susie <laugh>.
Yes. That always depends on your…
…goals, but what we do want to point out is there’s a lot of fear-based marketing and just marketing in general that is focused on the national scale of what is happening in our current economy. And we want to point out that what’s happening everywhere else isn’t necessarily the same as what is happening right here right now. So we just kind of want to look at some data that is factual about what is going on locally, here in our markets.
Right? So every other week we get these great charts from our office. Our sales manager shares with us, and we just want to remind everybody … we’ve said this before, but in case you’ve forgotten … a normal market has an absorption rate of five to six months. What absorption rate means is that if nothing else came on the market, that all of the inventory that is on the market would be absorbed within a certain amount of time. So if we have a five to six months supply that’s at the balance point between a seller and buyer market. So these numbers that we get are incredibly telling about what’s happening in our local communities.
Right? So if you look at that third column over, absorption rate, and you can see the towns listed on the left, we’re hovering right around two months of inventory for these particular towns. So within two months, all the buyers who are looking would snap up a house and there would be no more inventory left.
Right. And then of course the average list price is very informative as well. They’re still very high for these two towns that we primarily serve–Short Hills/Milburn and summit. And then if we look at the trend line, it’s gone up and down, but it has not in the past year, gone into the realm of a balance point. Likewise, for Summit, we’re not anywhere near that balance point of a buyers and sellers market. Then if we move into Essex county … more of Essex county and the towns that we serve, Livingston, Maplewood, Montclair, South Orange, West Orange…
Go back up. Those are in
Yeah. So these are more in the, you know, even South Orange is 0.8, which is extremely low. That’s about as low as we got, even during the pandemic. I think we were in for a while 0.5, but it just shows you we’re still really low on inventory.
And these average price points … look at them. I mean, we have been saying, between ourselves, that our average price points in our towns, our primary towns have been close to around a million. Prior to the pandemic they were closer to five to 600 were the average sales that we were experiencing. So a dramatic shift in the price points having been balanced by, as everyone knows, the ridiculously low cost of borrowing money. So we had seen down to like ,,, what? Two and a half percent at times sometimes, for some people lower.
I just want to add that locally, I mean, we’re hearing a lot of news about the low inventory for rentals in New York city. And then the high rent prices. So that is continuing to drive buyers, especially millennial buyers out from the city to all of the towns that we serve. In addition to that, you know, people are still working from home. They still need more space, millennial buyers. Some of them are starting to have families and they need more space. So there’s just continual reasons why people are moving out here and we’re continuing to see that we already have fall buyers calling us and lining up and hoping for new houses. So if you’re thinking about selling, it still is a good time to sell. I know it’s sleepy August and typically nothing happens, but things are happening. So it’s still a good time to sell. And as a buyer, you know, the rates are not that terrible. In fact, they went, they went way down on the 25th. They were 4.75. And then by the 28, they were at 5.37. They have kind of leveled out this week to 5.5. But historically those are still really low rates. So, absolutely.
And we’re definitely seeing continued traffic coming through because people are going to now, I think forever at this point need, more office space at home. And since we’re seeing that as a trend and yet they’re still commuting into the city. So whereas during the pandemic, people weren’t sure if they were going back into their offices ever again, it’s become clear that people are going to do some sort of hybrid. Now a lot of people. So mm-hmm, <affirmative>, we are starting to see more and more of the fall buyers starting early. And then we still have lots of spring buyers that haven’t gotten houses. So we know we did this really quick. It was a fly by because we’ve got a call coming in. So, if you wanna geek out with us more on these numbers, please reach out. We’re happy to go drill down even further and talk about your particular situations. All right. See you later. Hi everyone.
New Speaker (05:53):