Multiple Offers Drive the Short Hills Area Market in 2013

106 Fairfield Drive, Short Hills Sold with 17 Offers, $200,000 over asking.  Listed by Judith Daniels Real Estate.

106 Fairfield Drive, Short Hills Listed by Judith Daniels and Sold with 17 Offers, at $200,000 Over Asking.

It may be July, but ’tis still the season to be shopping for homes!

Home buyers eager to take advantage of the record low interest rates flooded the market at the start of the year.  It was more of a frenzy than anyone had predicted and within the first few days of January 2013, the Spring market was already in full effect.  Within the first couple of weeks, buyers were already engaged in bidding wars, and in some cases, purchased homes at 20%+ over asking.  Although the market had been fairly stable over the past several years, we have seen a shift from a buyer’s market to a seller’s market, as many homes have been selling way over what the market would have demanded merely a year or two ago.  Areas such as Millburn-Short Hills, Summit, New Providence, and Chatham have been highest in demand, and as interest rates have started to move up over the past month and the new school year is approaching, the market has only gotten hotter.

This past Saturday, I had appointments with four different groups of buyers, to show them homes in Chatham, Mountainside, Summit, Millburn, and Short Hills.  When making phone calls for those appointments the day before, I found that nearly every home already had an offer on it, even though many of the homes had just come out that week, and some even already had multiple offers. As interest rates have been rising, some people may have thought that the market would have slowed, but in fact, it has only gotten more competitive.  Savvy buyers are eager to purchase as rates are relatively low.

Taking a look at the monthly market snapshot, the year to date average sale price of homes in Short Hills has jumped from $1,303,342 in June 2012 to a whopping $1,567,526 in June 2013. From last year, we have also seen homes selling closer to the list price (on average) a significantly higher sale price to assessed value ratio.

So what is happening here and what can we expect for the second half of the year?  Many buyers are eager to purchase in 2013, as interest rates are still relatively low and there is so much uncertainty with what is to come in 2014.  This is still a fantastic market for sellers, and although there is competition amongst buyers, rates are still considerably lower than they have been in the past.  I anticipate that the market may slow a bit in the fall, because there will be less competition to get into a home before the school year, but that it will be the strongest fall market we have seen in many years because buyers are anxious to purchase before rates climb even higher and 2014 kicks in.

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