Data Blog

September Update

Welcome back from what has been a great summer here in Mountain Lakes.  Kids are back in school, Football season and the World Series approaches, and it is time to reflect on what has happened in Mountain Lakes real estate so far this year.

The response to the Mountain Lakes Realty Data Blog has been outstanding.  I was in Hapgoods (isn’t that place great!!!) recently and overheard two folks talking about the TREAD Index.  The Data Blog is now the most popular page on the BestofMountainLakes.com site.  Thanks for looking, and we hope to make the dialogue useful and informative.  If you would like to discuss any topic or have questions on the data please contact me at GinnyCassidy@remax.net.

But first lets talk about what industry trends mean.  All the data we discuss here, the TREAD Index, total sales, absorption rates, average home prices, Case-Shiller Index©, and any others are Macro trends.  They show what is broadly happening within the industry, the State, etc.  We make an effort in this blog to bring those trends down to what is specifically happening in Mountain Lakes. 

These data can help you understand the health of the Mountain Lakes real estate market in town when you are looking to buy or sell a home.  Each home is different, however.  Each home is its own Micro market, where the decisions of home buyers and sellers are driven as much by the design, features, staging, location, marketing and layout of the home as they are by the Macro trends.  That is where the experience and creativity of the Cassidy Team can help make a difference!

Now for the update.  TREAD Index increased to 136%, showing the continued improved health of the market.  Activity in the fall is typically lighter, but as the TREAD tracks twelve months of data it should still provide a useful status on market trends as we enter the fourth quarter.  More information on the Index is found in earlier months’ blogs.
Now that we are almost through the third quarter lets look at total home sales year-to-date.  I caution you that in dealing with the small numbers of sales in our town it is sometimes easy to confuse randomness with trends, so take all these data with a grain of salt.

Total number of homes sold – Through August 57 homes have sold.  This compares with 50 last year.

What does this tell us?  First, few homes went under contract near the end of 2012, resulting in very few sales to start 2013.  Through the first quarter there were 13 sales in 2014 against a mere 5 in 2013.  The situation reversed in the second quarter – 2013 outperformed 2014 in each month, with 26 sales in 2103 against 20 in 2014.
So through July the numbers were almost equal  - 41 sales in 2014 vs. 39 in 2013.  Then came a “huge” August this year, with 16 sales against 11 in 2013 (congratulations to the buyers, sellers and realtors involved!).  This gives us year to date numbers of 57 sales in 2014 against 50 through August in 2013 (and 37 in 2012).  Lets watch carefully over then next few months to see how the year ends.  In any event, all indices are pointing to a continued healthy, recovering market.

Next month – Average Sales Price.  What it is and what it means!

How do you assess the health of the Mountain Lakes real estate market?

How do you assess the health of the Mountain Lakes real estate market? Average Sales Price - Helpful, but no home is "average".  List to Sale Price – Doesn’t take into account whether the home was realistically priced to begin with.

Overall market health can be shown by the total amount buyers spend to purchase homes in our town.  The proprietary Cassidy Mountain Lakes Total Real Estate Aggregate Demand (TREAD*) Index.  TREAD index tracks the trailing 12-month sum of real estate purchases, is updated monthly and is indexed against the January 2013 value.

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* - Total Real Estate Aggregate Demand Index (July 2014 = 130%, Jan 2013 = 100%)

What the TREAD Index tell us?  As of July 2014 the total value of homes purchased in town during the previous 12 months was 30% higher than the index baseline date of January 2013 (which measured the value of homes purchased during 2012).  Remember, the Index is designed to measure a full annual cycle of home purchases, so it reflects the differences in home buying patterns during all seasons of the year.

So there was a 30% increase in the sum purchase price of all homes – does this mean the prices went up by 30%?  No, in this case the biggest driver was an increase from 51 (2012) to 70 (12 months ending July 1, 2014) home purchases in Mountain Lakes.

Check back periodically to BestofMountainLakes.com as we further review home sales data and try to find the trends that can help you buy or sell your home.

Tags : mountainlakesrealestateblog mountainlakesrealestatedataanalysis mountainlakeshomevalues

August 2014 TREAD Index Update

First of all, an update on the TREAD Index.  The August index held at 130%, level with that in July.  This shows a continued, healthy Mountain Lakes real estate market over the past 12 months.  See below for the background on the TREAD Index.

Each month we will look at various aspects of the data surroundings sales trends and what it may mean (and not mean) to the purchase or sale of a home.

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This month it is Bull Market – Bear Market, the great real estate boom and bust and what actually happened in Mountain Lakes.

First the good times.  The Bull Market was in full effect during 2001-2007.  Prices rose. Sales boomed.  Everyone assumed you could buy a “historical” Hapgood and it would rise in price without fail, and that any renovation would be paid for by the appreciation on the home.  Some of the stats for that time:

  • Average prices peaked in 2004 and 2007 with the average home price exceeding $1M and total annual transaction volume ranged from $80M to $90M
  • During the peak years an average of 25 homes sold each year in excess of $1M and 3 of these on average sold in excess of $2M
  • In 2004 88 homes were sold

Then the world changed. As the financial crisis hit the Mountain Lakes real estate market was not immune from its effects.

  • From 2009-2012 the average total transaction volume fell to $47M, about half the peak value
  • Average transactions fell to 53
  • Average sales price fell to approximately $800k
  • The $1M+ transactions fell by 50%

The market split.  Nicely done, new and immaculately renovated homes sold well (although down from the boom times).  Homes that had not been renovated or which did not have the layout or amenities demanded by today’s buyers suffered a larger decrease and longer times on the market.

Next month we will update the TREAD Index and review the year-to-date transaction volume and trends.

Update August, 2014

First of all, an update on the TREAD Index.  The August index held at 130%, level with that in July.  This shows a continued, healthy Mountain Lakes real estate market over the past 12 months.  See below for the background on the TREAD Index.

Each month we will look at various aspects of the data surroundings sales trends and what it may mean (and not mean) to the purchase or sale of a home.

This month it is Bull Market – Bear Market, the great real estate boom and bust and what actually happened in Mountain Lakes.

First the good times.  The Bull Market was in full effect during 2001-2007.  Prices rose. Sales boomed.  Everyone assumed you could buy a “historical” Hapgood and it would rise in price without fail, and that any renovation would be paid for by the appreciation on the home.  Some of the stats for that time:

  • Average prices peaked in 2004 and 2007 with the average home price exceeding $1M and total annual transaction volume ranged from $80M to $90M
  • During the peak years an average of 25 homes sold each year in excess of $1M and 3 of these on average sold in excess of $2M
  • In 2004 88 homes were sold

Then the world changed. As the financial crisis hit the Mountain Lakes real estate market was not immune from its effects.

  • From 2009-2012 the average total transaction volume fell to $47M, about half the peak value
  • Average transactions fell to 53
  • Average sales price fell to approximately $800k
  • The $1M+ transactions fell by 50%

The market split.  Nicely done, new and immaculately renovated homes sold well (although down from the boom times).  Homes that had not been renovated or which did not have the layout or amenities demanded by today’s buyers suffered a larger decrease and longer times on the market.

Next month we will update the TREAD Index and review the year-to-date transaction volume and trends.