September 4, 2013 |
When comparing the average sold prices for the period ending August 31 to the same period last year, the average sold price show a 20% increase!
But did Tenafly home prices really go up 20% ?
This blog does not think so.
When analyzing the breakdown of sales by price range what we find is that while the total numbers of homes sold is the same (111 units in 2012 vs 112 in 2013) the shift in sales towards sales of higher priced homes is up by 50%!
Take a look at these numbers;
- In 2012 only 36 homes sold for $900,000 or higher….in 2013 this number increased 50% to sales of 54 homes!
- In 2012 75 homes sold for $900,000 or less….in 2013 this number decreased 23% to sales of 58 homes!
This shift in average sold prices is thus explained by the fact that many more expensive homes sell this year than last and the question to be asked is why?
We think that the rising interest rates are pushing the higher market along. The effect of higher interest rates over the life of the loan is much more pronounced in higher prices. This is making those buyers who are usually upgrading, take a stand and make commitments. The lower priced buyers in Tenafly are usually first time home buyers who took advantage of the lower rates last year.