Weichert, Princeton Office August Market
Update Seminar
Offers analysis of the Princeton & Greater
Princeton, NJ real estate markets & effective
strategies to buy and sell.
Presented by:
Joshua D Wilton
Broker/ Sales Rep.
Weichert Realtors
Princeton, NJ
O 609-921-1900
Agenda
1. The Market
2. Strategies for Buying
3. Strategies for Selling
Agenda
1. The Market:
- The National Economy…
Chrysler in Bankruptcy…GM Next…Over 1000 Chrysler Dealers
to be shuttered…
Source: Autodata
Consumer Sentiment Not This Low Since Early 1980s
Source: University of Michigan
1966Q1 = 100
• U.S. Economy: Consumer Sentiment Falls on Job Losses
• By Shobhana Chandra and Bob Willis
• July 10 (Bloomberg) -- Sentiment among U.S. consumers, whose spending is critical to an economic recovery, dropped in July after four months of gains as unemployment approached 10 percent.
• The Reuters/University of Michigan preliminary index of consumer sentiment fell by more than forecast to 64.6 from 70.8 in the prior month. A separate report from the
Commerce Department showed the trade deficit unexpectedly narrowed in May to the lowest level in almost a decade.
• Unemployment is rising even as economists predict an end to the recession in coming months. Consumers in the survey said they are less likely to buy cars or appliances, suggesting that the recovery may be weaker than anticipated.
www.bloomberg.com
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003
2009: Foreclosure ForecastWithin Company-Owned Footprint
Over 1800 Foreclosure in Mercer County.
Less than 72 foreclosures in 08540 (3 townships).
Less than 27 foreclosures in West Windsor.
Majority of the 1800 are in Trenton.- foreclosurepoint.com
Home Price Trends in Down Markets: Big Declines in Subprime Neighborhoods
Yellow – Conforming Loans Only (OFHEO)Orange – All Loans including subprime and jumbo loans (Case-Shiller)Red – Subprime Loans (NAR estimate based on subprime weight)
Where is the bottom of the market?“The effects (of foreclosures) are continued declining
prices….probably another 5-8%* to the bottom. As for the effect of foreclosure pricing, all of these problems are
causing home prices to go lower than is necessary from an affordability perspective.
That’s because everyone is now worrying about job security.
As a result, the recovery will take place at a faster pace once it gets started.”
– Jeff Otteau (otteau.com- January 2009)
What about the Real Estate Markets….?
Pending Home Sales Record Fourth Straight Monthly GainWashington, July 01, 2009 Pending home sales show a sustained uptrend, rising for four consecutive months with very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in May, increased 0.1 percent to 90.7 from an upwardly revised reading of 90.6 in April, and is 6.7 percent higher than May 2008 when it was 85.0. The last time there were four consecutive monthly gains was in October 2004.
August 21, 2009By Lawrence Yun, Chief EconomistThe housing market has decisively turned for the better. Existing home sales (single-family plus condos and coops) increased 7.2 percent from the prior month to a seasonally adjusted annual rate of 5.24 million units from an unrevised 4.89 million unit pace in June. Compared to the same month one year ago, existing home sales were higher by 5.0 percent.The latest increase of over 7 percent is the highest monthly increase in at least 10 years. The latest positive gain from one year ago (rather than a decline) was the first occurrence since November 2005 (nearly four years ago).
August 21, 2009By Lawrence Yun, Chief Economist The year-over-year increase of 5 percent from one-year ago is the highest year-over-year rise since September of 2005. The home sales pace of 5.24 million was the highest since August 2007.Regionally, home sales rose in three of four major regions. From June to July seasonally adjusted sales were: In the Northeast, existing home sales increased 13.4 percentIn the Midwest, sales increased 10.9 percent In the South, sales increased 7.1 percent In the West, sales decreased 1.7 percentCompared to a year ago, sales are higher in all four regions. The current housing market recovery is broad based, not isolated in few cities.
August 21, 2009Strong Gain in Existing-Home Sales Maintains UptrendWashington, August 21, 2009 For the first time in five years, existing-home sales have increased for four months in a row, according to the National Association of Realtors®.Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.2 percent to a seasonally adjusted annual rate1 of 5.24 million units in July from a level of 4.89 million in June, and are 5.0 percent above the 4.99 million-unit pace in July 2008. The last time sales rose for four consecutive months was in June 2004, and the last time sales were higher than a year earlier was November 2005.
““Everything I am Everything I am seeing tells me we seeing tells me we have arrived at the have arrived at the
bottom of the market, bottom of the market, specifically in the specifically in the
popular and popular and affordable price affordable price
ranges.”ranges.”J. Weichert
6/2009
49.8%49.8%Increase in SalesIncrease in Sales
$300,000 & Under$300,000 & Under
Recovery Has BegunRecovery Has Begun
May YTD reported internal revenue units
Sales by Price RangeSales by Price Range
Source: NAR
Positive Indicators Across the Board….1st time in 4 years….!
The Otteau Report comes from an objective third-party appraisal company that provides regular market updates to developers and consumers.
Where is the bottom of the market?
Where is the bottom of the market?
Less New Construction in Mercer
Source: NAR, November 2008 Forecast
Richardson Commercial
The Local Inventory and Sales Patterns:
Source: NAR, November 2008 Forecast
07 Inventory Ct
07 Pending sales
07 Abs. Rate
07 Active w/ Contracts
08 Inventory Ct
08 Pending Sates
08 Abs. Rate
08 Active w/ Contracts
09 Inventory Ct
09 Pendings 09 Abs. Rate
Pton Boro 65 2 32.5 0 50 3 16.7 8 44 8 5.5
Pton Twp 127 14 9.1 1 111 8 13.9 14 138 20 6.9
W. Windsor 165 27 6.1 2 124 19 6.5 27 107 36 2.9
Lawrence 237 22 10.8 0 199 16 12.4 40 186 37 5.0
East Windsor 223 29 7.7 0 217 11 19.7 26 180 30 6.0
Ewing 270 29 9.3 3 256 14 18.3 31 232 36 6.4
Hamilton 596 57 10.5 2 627 50 12.5 20 572 95 6.0
Hopewell Twp. 199 11 18.1 0 144 10 14.4 23 176 18 10.0
Cranbury 27 2 13.5 0 27 3 9.0 0 31 2 15.5
Plainsboro 137 21 6.5 0 98 9 9.8 5 76 18 4.2
South Brunswick 0 0 0.0 0 202 22 9.2 16 211 20 10.0
Montgom. 149 28 5.3 54 135 26 5.2 37 155 34 4.6
Cum. 2195 242 9.1 62 2190 191 11.5 247 2108 354 6.0
Inventory is a combined 20% lower in the above communities than in 2007.
Lawrence Active Inventory
0
50
100
150
200
250
300
Lawrence Actives
Princeton Twp. Inventory
020406080
100120140160180
Twp. Inventory
Princeton Boro. Active Inventory
01020304050607080
Boro Activities
West Windsor Active Inventory
0
50
100
150
200
250
West Windsor Actives
Plainsboro Active Inventory
020406080
100120140160180
Plainsboro Actives
East Windsor Active Inventory
0
50
100
150
200
250
4/1
1/2
00
6
6/1
1/2
00
6
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1/2
00
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10
/11
/20
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12
/11
/20
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2/1
1/2
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4/1
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10
/11
/20
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12
/11
/20
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2/1
1/2
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4/1
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1/2
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8
8/1
1/2
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10
/11
/20
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12
/11
/20
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2/1
1/2
00
9
4/1
1/2
00
9
6/1
1/2
00
9
East Windsor Actives
•With few exceptions (Princeton Township, Hamilton and Ewing, Inventory in Mercer County is down compared to the
last several years.
•Absorption Rates in the majority of towns are lower, suggesting an improved sales performance, specifically in the
lower price ranges in each town and product line (is single family, townhouses, etc.
•The most expensive homes in each Community will have the slowest pace of sales and continued depreciation.
• The 55+ Active Adult market will continue to struggle.
While continuing economic challenges lie ahead, it’s instructive to remember that the housing market tends to lead
the economy in-to and out-of recession. … Building on last month’s column as to what a housing recovery will look like – more homes selling and fewer to choose from –
the New Jersey market continued in the direction of stabilization last month. In May, Contract-Sales continued to
rise by equaling the pace from one year ago and appear poised to exceed last year’s sales pace soon. Such a break-through above
the prior year’s pace has occurred only 3 times in the past 5 years, in early 2007 and again in July 2007, as the market attempted to stabilize before being swamped by mortgage foreclosures. But different from 2007 when home sales slumped in the critical spring month of April amidst rising foreclosures and falling
consumer confidence, this year’s sales pace has risen steadily in each month and now stands 86% higher than the January pace.
Source- www.otteau.com
1. Real Estate is Local
Top Five Rules for Understanding the Real
Estate Market:
2. Real Estate is Local
3. Real Estate is Local
4. Real Estate is Local5. Real Estate is Local
1. Understand the Local Market That You are Buying into…
Market Absorption Scale(Absorption Rate in Months)
5-6 months absorption rate indicates a normal market.
8/18/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
Princeton Boro:
All Styles 46 4 11.5 6 2 5 11% 1 1 4
Pton -Boro Condo/ Thouses 12 0 99 1 1 2 17% 0 1 0
Pton-Boro
Single Family 34 4 8.5 5 1 3 9% 1 0 4
Pton Twp: All Styles 133 20 6.7 17 (3) 30 15% 10 8 21
Pton Twp: Condo/ Thouses 20 4 5 2 (2) 5 25% 3 1 4
Pton Twp:
Single Family 113 16 7.1 15 (1) 15 14% 7 7 17
Town by Town Analysis 8/11/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
West Windsor:
All Styles
101 34 2.9 37 3 22 22% 7 4 43
West Windsor Condo/ T.Houses
18 8 2.2 7 (1) 5 28% 2 0 12
West Windsor
55+
7 0 99 - - - - - - -
West Windsor
Single Family
76 26 29 30 4 17 22% 5 4 31
Lawrence: All Styles
190 35 5.4 50 15 42 22% 13 14 31
Lawrence:
Condo/
THouses
91 15 6.0 25 10 19 21% 3 5 14
Lawrence:
55+26 0 99 - - - - - - -
Lawrence:
Single Family
83 20 4.1 25 25 23 27 10 9 27
Town by Town Analysis 8/18/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
Ewing:
All Styles237 30 7.9 44 14 46 19% 19 8 27
Ewing : Condo/ T.Houses
44 3 14.6 10 7 10 23% 6 4 7
Ewing 55+: 1 0 99 - - - - - - -Ewing:
Single Family
172 27 6.3 34 7 36 21 12 4 20
East Windsor:
All Styles
188 28 6.7 45 12 37 19 18 8 25
East Windsor:
Condo/ THouses
99 12 8.2 25 13 19 19 10 5 11
East Windsor:
55+
19 0 99 - - - - - - -
East Windsor: Single Family
70 16 4.3 15 25 18 25 8 3 14
Town by Town Analysis 8/18/09
Towns Active Listings
Pending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
Hopewell Twp.
All Styles
174 19 9 25 6 35 20% 12 6 22
Hopewell Twp. Condo/ T.Houses
26 6 4 6 0 9 35% 3 1 5
Hopewell Twp.:
55+
6 0 99 - - - - - - -
Hopewell Twp:
Single Family
142 13 11 19 6 26 18% 9 5 17
Hamilton: All Styles 561 96 6 121 25 118 21% 36 19 91
Hamilton:
Condo/ THouses 95 22 4 27 5 27 28% 7 5 21
Hamilton:
Single Family 425 71 6 94 23 91 21% 29 14 70
Hamilton: 55+41 3 14 - - - - - - -
Town by Town Analysis 8/18/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
Robbinsville
All Styles 108 17 6 27 10 19 18% 8 8 22
Robbinsville
Condo/ T.Houses
51 11 5 20 9 10 20% 4 3 13
Robbinsville
55+ 0 0 0 0 0 0 0 0 0 0
Single Family57 6 9.5 7 1 9 16% 4 5 9
Hightstown Boro: All Styles 59 2 29.5 13 11 17 29% 4 3 7
Pennington25 3 8 3 0 8 32% 3 2 6
Hopewell Boro:
All Styles 9 3 3 0 (3) 2 22% 0 0 3
Market Activity: Town by Town Analysis 8/18/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
PlainsboroAll Styles
70 16 4.3 17 1 14 2% 9 0 22
Plainsboro
Condo/ THouses
41 10 4.1 11 1 9 21% 5 0 7
Plainsboro
55+11 0 99 3 3 1 9% 2 0 0
Plainsboro
Single Family
18 6 3 3 (3) 4 22% 2 0 15
Cranbury:
All Styles31 1 31 9 8 3 9% 1 0 0
Cranbury:
55+3 0 99 1 1 2 66% 0 0 0
Cranbury: Single Family
28 1 28 8 7 1 3% 1 0 0
Town by Town Analysis 8/18/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
South
Brunswick
All Styles
208 24 8 43 19 35 16% 27 6 4
South Brunswick
Condo/ T.Houses
70 9 7 21 12 19 14 6 3 1
South Brunswick
55+
31 6 5 2 (4) 4 12 4 0 0
South Brunswick
Single Family
109 9 12 20 11 21 19 17 3 0
Monroe:
All Styles487 39 12 92 53 105 21% 41 7 9
Monroe:
55+312 29 10 53 24 68 21% 22 6 1
Monroe:
Single Family
175 10 21 39 29 37 21% 19 1 0
8/18/09
Towns Active Listings
Pending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
Montgom.140 43 3.3 33 (10) 38 28% 6 9 39
Hillsboro262 31 8.5 56 25 46 18% 18 8 46
Rocky Hill4 0 99 2 2 1 25% 0 1 0
Franklin406 65 6.2 90 25 79 20% 22 17 57
Market Absorption Scale(Absorption Rate in Months)
5-6 months absorption rate indicates a normal market.
Absorption Rate by Price Range
Weichert has been studying market conditions for more than 3 decades and has found a direct correlation between market
absorption and property values.
As absorption rates increase beyond a normal market level of 5-6 months, property
values depreciate annually.
Sample Market Absorption RateSample Market Absorption Rate
107 current active listings
4 reported sales in last 30 days
=
24.3months absorptionrate
Anytown., NJ
5-6 Months Market Absorption Rate indicates a normal market.
Princeton Borough Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$5009 0 99
$500-999k 14 2 7
$1 million - $2 million
15 0 99
$2- $5 million 7 0 99
Princeton Township Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$5006 3 2
$500-999k 49 4 12.2
$1 million - $2 million
43 3 14.3
$2- $4 million 26 1 26
$4 + 2 0 99
West Windsor Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
46 12 3.83
$500-750k 36 11 3.27
$750-999 20 3 6.6
$999 + 6 0 99
Lawrence Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$400
134 16 8.3
$400-650 44 7 6.2
$650-999 11 1 11
$999 + 8 0 99
Ewing Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$150
30 3 10
$150-250 126 12 10.5
$250-450 80 4 20
450+ 9 0 99
Hopewell Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$400
63 4 15.7
$400-$650 46 1 46
$650-999 39 1 39
$999+ 33 0 99
Lawrence Single Family Absorption Rate
0
5
10
15
20
25
30
12
/29
/20
08
1/5
/20
09
1/1
2/2
00
91
/19
/20
09
1/2
6/2
00
92
/2/2
00
92
/9/2
00
92
/16
/20
09
2/2
3/2
00
93
/2/2
00
93
/9/2
00
93
/16
/20
09
3/2
3/2
00
93
/30
/20
09
4/6
/20
09
4/1
3/2
00
94
/20
/20
09
4/2
7/2
00
95
/4/2
00
95
/11
/20
09
5/1
8/2
00
95
/25
/20
09
6/1
/20
09
6/8
/20
09
6/1
5/2
00
96
/22
/20
09
6/2
9/2
00
97
/6/2
00
97
/13
/20
09
7/2
0/2
00
97
/27
/20
09
8/3
/20
09
Lawrence Single Family Abs. Rate
Princeton Twp. Single Family Absorption Rate
0
10
20
30
40
50
60
70
80
90
Princeton Township Single Family Abs. Rate
Princeton Boro. Single Family Absorption Rate
0
20
40
60
80
100
120
Princeton Boro Single Family Abs. Rate
West Windsor Condo/Townhouses Absorption Rate
0
5
10
15
20
25
30
West Windsor C/T Abs. Rate
West Windsor Single Family Absorption Rate
0
10
20
30
40
50
60
70
80
West Windsor Single Family Abs. Rate
East Windsor Condo/Townhouse Absorption Rate
05
101520253035404550
East Windsor C/T Abs. Rate
East Windsor Single Family Absorption Rate
0102030405060708090
East Windsor Single Family Abs. Rate
Understand the Market That You are Buying into…
I want to live in West Windsor…
Town by Town Analysis 8/11/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
West Windsor:
All Styles
101 34 2.9 37 3 22 22% 7 4 43
West Windsor Condo/ T.Houses
18 8 2.2 7 (1) 5 28% 2 0 12
West Windsor
55+
7 0 99 - - - - - - -
West Windsor
Single Family
76 26 29 30 4 17 22% 5 4 31
Lawrence: All Styles
190 35 5.4 50 15 42 22% 13 14 31
Lawrence:
Condo/
THouses
91 15 6.0 25 10 19 21% 3 5 14
Lawrence:
55+26 0 99 - - - - - - -
Lawrence:
Single Family
83 20 4.1 25 25 23 27 10 9 27
Market Absorption RateWest Windsor Twp.
18 current active listings
7 reported ‘pending’ sales in last 30 days=2.5 month absorptionrate
Townhouses All Prices
Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same
5-6 Months Absorption Rate indicates a Normal Market
Market Absorption Scale(Absorption Rate in Months)
5-6 months absorption rate indicates a normal market.
Market Absorption RateWest Windsor Twp.
16 current active listings
3 reported ‘pending’ sales in last 30 days=5.5 month absorptionrate
Townhouses $0-500
Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same
5-6 Months Absorption Rate indicates a Normal Market
Market Absorption RateWest Windsor Twp.
current active listings
0 reported ‘pending’ sales in last 30 days=4.25 month absorptionrate
Townhouses $500k+
Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same
5-6 Months Absorption Rate indicates a Normal Market
Market Absorption RateWest Windsor Twp.
2 current active listings
0 reported ‘pending’ sales in last 30 days=99 month absorptionrate
Townhouses $500 +
Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same
5-6 Months Absorption Rate indicates a Normal Market
2. ‘I am going to time the Market and buy at
the peak inventory level and when no one else
buys…’Source: MLS
Source: MLS0
20
40
60
80
100
120
140
160
180
1/7/2007 4/1/2007 6/24/2007 9/23/2007 12/16/2007
Gross # of Guests 2007
Gross # ofGuests 2007
Weekly Guests Thru the Weichert Princeton Open Houses, 2007
Source: MLS
Inventory Levels, Princeton, New Jersey, 2007
0
50
100
150
200
250
1/8/07 3/5/07 4/30/07 6/24/07 8/20/07 10/16/07 12/11/07
3. ‘I am going to wait until the price comes down further and then make an
offer…’Source: MLS
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
10
20
30
40
50
60
70
Princeton Pendings
Princeton Price Reductions
Town by Town Analysis 8/18/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
Expired Listings
W/drawn Listings
Closed Listings
South
Brunswick
All Styles
208 24 8 43 19 35 16% 27 6 4
South Brunswick
Condo/ T.Houses
70 9 7 21 12 19 14 6 3 1
South Brunswick
55+
31 6 5 2 (4) 4 12 4 0 0
South Brunswick
Single Family
109 9 12 20 11 21 19 17 3 0
Monroe:
All Styles487 39 12 92 53 105 21% 41 7 9
Monroe:
55+312 29 10 53 24 68 21% 22 6 1
Monroe:
Single Family
175 10 21 39 29 37 21% 19 1 0
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
10
20
30
40
50
60
70
Princeton Pendings
Princeton Price Reductions
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
20
40
60
80
100
120
West Windsor Pendings
West Windsor Reductions
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
10
20
30
40
50
60
70
80
90
100
Lawrence Pendings
Lawrence Reductions
Seeing the Opportunity.Seeing the Opportunity.
Seeing the Opportunity.Seeing the Opportunity.
Q. If this were 2005, where would you place the Price and Rate dots?
Prices Rates
High
Mid-Range
Low
A. In 2005, the V would look somewhat like this one, where prices were on the high end of the scale and rates were in the lower range.
Seizing the Opportunity.Seizing the Opportunity.
In recent history, there has never been an opportunity like this, with low prices and low rates. In real estate, this circular area at the bottom of the V is called the “Buying Zone” – it’s an unbelievable time to buy.
Prices Rates
High
Mid-Range
Low
Jeff Smith,
Gold Services Manager/ Loan Officer
Financial Benefits and Financial Benefits and Process of Home-Process of Home-
Ownership.Ownership.
‘I don’t want to buy a house and then watch it drop in value!’
Purchase Price $329,000 Loan Amount $317400
Down Payment $11,515 Monthly P&I $1802
Appreciation/Depreciation Home Value1st Year -3% $319,1302nd Year 0% $319,1303rd Year 1% $322,3214th Year 3% $331,9905th Year 5% $348,5905 Year Appreciation/Depreciation $19,500
Tax Benefit Vs Paying Rent @
$1600/mo1st Year $5,000 $19,2002nd Year $5,000 $19,2003rd Year $5,000 $19,2004th Year $5,000 $19,2005th Year $5,000 $19,2005 Year Total $25,000 $96,000
Total Gain $44,200Create Equity
v Pay Rent
+ The Amortization Schedule on a Loan
Yearly Schedule of Balances and PaymentsYear
Beginning Balance
Payment Principal InterestCumulative
PrincipalCumulative Interest
Ending Balance
2010 $315,646.96 $21,625.92 $4,374.96 $17,250.96 $6,128.00 $24,508.72$311,272.0
0
2011 $311,272.00 $21,625.92 $4,621.30 $17,004.62 $10,749.30 $41,513.34$306,650.7
0
2012 $306,650.70 $21,625.92 $4,881.98 $16,743.94 $15,631.28 $58,257.28$301,768.7
2
2013 $301,768.72 $21,625.92 $5,157.36 $16,468.56 $20,788.64 $74,725.84$296,611.3
6
2014 $296,611.36 $21,625.92 $5,448.28 $16,177.64 $26,236.92 $90,903.48$291,163.0
8
= Total 5 Year Gain: $59,922
Incentive From the Government
First-time homebuyers can receive a
tax credit up to $8000!
Tax Credit OverviewAmount Ten percent of the cost of home, not to exceed
$8,000
Property Any single family residence that will be used as a principal residence
Refundable
Reduces income tax liability for the year of purchase
Income Limit
Adjusted gross income of $75,000 single or $150,000 joint tax returns
First-Time Must not have owned a principal residence in 3 years prior to purchase
Distribute NAR Tax Credit Overview handout
Tax Credit FAQs
• Can individuals with incomes higher than the income limits still benefit from the tax credit?
• How does a tax credit work?
• How do I apply for the credit?
• Is there a way to get the credit before I file my tax return?
• How does the repayment work? Distribute NAR Frequently Asked Question handout
How much house can I really afford?
• The first step is to meet with me!
Establish Establish YourYour Buying Buying PowerPower
Factors to consider Factors to consider when buying and when buying and
selling…selling…
Source: MLS
Inventory(supply and Inventory(supply and demand)demand)
Interest RatesInterest Rates
Interest Rates Remain Interest Rates Remain LowLowAverage Annual Rate (30-year fixed rate mortgage)
5%
7%
9%
11%
13%
15%
17%
19%
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Year
Percent
Source: Freddie Mac
Joshua D. Wilton, Manager
Strategies for Strategies for SellingSelling
The Impact of Pricing on the Salability of Your Home..…
‘Great speech but does it really work?
We know the best way to evaluate pricing
Does this really work?
We know the best way to evaluate pricing
Does this really work?
22. . The Effect of The Effect of StagingStaging on the on the Value of a Value of a YourYour
HomeHome..
The process of preparing homes for sale regardless of
Price, Location, or Condition
To achieve the maximum sales price in the minimum marketing time.
The GOAL is to appeal to the broadest range of BUYERS.
The Way You Live In Your Home…
… And The Way We Market And Sell A House Are Two Different
Things.
“The Investment in Home Staging
is Always Less than Your First Price Reduction!”
Buyers Only Know What They See …
… Not The Way It Is Going To Be.
Based on a StagedHomes.com survey of over 400 homes across Canada & the Continental US prepared for sale by an
Accredited Staging Professional (ASP™) from June 2007 through November 2007.
The average increase in sales price of an ASP Staged vs. non-Staged home is
6.9%.That is an additional
$31,050 on a $450,000 sale.
The average marketing
time of an ASP Staged vs. non-Staged home is 80%
less.
3.3.The Effect of ‘The Effect of ‘Pre-Pre-Inspection’Inspection’ on the Sale of on the Sale of
YourYour Home. Home.
What is
‘Pre-Inspection?’
Home Inspection
WHAT DOES PRE-INSPECTION INCLUDE? The standard home inspector's report will review the condition of the home's heating system, central air
conditioning system (temperature permitting), interior plumbing and electrical systems; the roof, attic, and visible insulation; walls, ceilings, floors, windows and doors; the
foundation, basement, and visible structure.
PRE-LISTING Home Inspection
DOESN’T THE BUYER DO THE HOME INSPECTION?
All Negotiations, including real estate, are all about negotiation and control.
Who is in control?
Right Price
Right Staging
All Repairs are done in advance.
Offer a Home Warranty to the buyer..
PRE-LISTING Home Inspection
Data on where most sales fall apart: attorney review, home inspection.
Fall Thru Percentage 2007: 26%Fall Thru Percentage 2008: 10.2%.
Home Improvements
I am moving out of the house, I do not want spend too much money to move.
Or
I just spent $$ on a new kitchen, I want $$$$$$ back on that investment when I move.
Reality of today’s market is that you will see the return on your investment not in an inflated sales price but in retaining the highest percentage of your list price and staying on the market the fewest # of days.
Please consult with your Realtor & staging professional as to which improvements you should finish to make your home the most salable.
Weichert Family of Companies
What will a real estate company
do for me?
Making Your Purchase as Making Your Purchase as Smooth as PossibleSmooth as Possible
Buying a home involves the careful coordination of many people.
Choosing a real estate team you can count on will make the process smoother
and easier.
• Time is money.
The Weichert The Weichert DifferenceDifference
• Stress kills.
• Time is life.
Educate You.
Negotiate on your behalf.
Offer advice on due diligence.
Manage all aspects of the transaction
process.
What Will a Weichert Agent Do for Me?
We’re Here to HelpWe’re Here to Help
The Entire Process is reviewed by Legal Council.
Weichert Princeton on Facebook
Search ‘Weichert Realtors Princeton’
Click ‘Become a Fan’
Download seminar & read other market data
Resource and website list:
Realtor.org
http://www.facebook.com/pages/
NAR-Research/73888294183#
Remodeling.com
Resource and Website Resource and Website ListList
http://www.realtor.org/research/research/housinginx Remodeling.com
www.Otteau.com
www.Pre-listing-inspection.com
Resource and Website Resource and Website List:List:
www.Housemaster.com
www.Stagingshoppingcenter.com
Resource and website Resource and website list:list:
www.Stagedhomes.com
www.realestatestagingassociation.com
www.foreclosurepoint.com
www.realtytrac.com
Good Luck with your Good Luck with your Move!Move!