september market seminar part i
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Weichert, Princeton Office September 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
Mind Exercises
• Which way is the bus heading?
Mind Exercises• The next picture was used in a case study on stress levels at St.
Mary's Hospital. Look at both dolphins jumping out of the water. The dolphins are identical. A closely monitored, scientific study revealed that, in spite of the fact that the dolphins are identical, a person under stress would find differences between the two dolphins. The more differences a person finds between the dolphins, the more stress that person is experiencing.
• Look at the photograph, and if you find more than one or two differences, you may want to take a vacation or at least get a massage.
Mind Exercises
Agenda
1. The Market:
- The National Economy a
Year Ago…
Chrysler in Bankruptcy…GM Next…Over 1000 Chrysler Dealers
to be shuttered…
Source: Autodata
‘TARP…BAILOUTS…
CREDIT CRUCH…“TBTF”
RECESSIONISTA…CREDIT DEFAULT SWAP’
Source: Autodata
We learned a new vocabulary…
Source: Autodata
2 Year Picture of the DOW…
‘Congrats! You Just Lived Through the Worst Stock
Market Drop Since the Depression’-about.com
Source: Autodata
We Survived…
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003
The consequences…
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003
The consequences…
What about the Real Estate Markets….?
A real estate market correction was taking shape the summer
of 2001…Inventory was growing…Rates were edging up…
Contracts were slowing…
Unsold Inventory from the MLS in Weichert Market Areas10/20/2003 thru 9/14/2009
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ASHBY TOTAL DOEPPER TOTAL BIXON TOTAL MCDONALD TOTAL PREVETE TOTAL WATERS TOTAL WILLIAMS TOTAL
9/13/0432,893
9/12/0538,513
9/11/0683,739
9/17/07*91,009
9/15/0891,267
*added Waters & Williams Region to Totals
9/14/0983,431
Listings from the MLS in Weichert Market AreasListings from the MLS in Weichert Market Areas
In our local area (CT/NY/NJ Lehigh Valley, PA), the number of homes for sale (Weichert and non-Weichert listings) has steadily increased over the past four years.
Variance % 2009 from 2008NY (Ashby) -9.26%CT (Doepper) +1.44%Passaic/Hudson/Bergen NJ (Bixon) +.32%Western Central NJ/Lehigh Valley PA (McDonald) +.32%Northern and Central NJ (Prevete) +.28%Eastern Central/Shore Points NJ (Waters) +.08%Southern NJ (Williams) -.03%
123 Any street, Princeton, NJ
123 Any street, Princeton, NJ
• First Time home buyers were priced out of the market
• Financing was too available (ie ‘subprime’)
• Banks made bad bets (ie that home prices would continue to
rise)Lehman, Merril, over 300+ fail• Credit freeze, affects ‘main street’
business…
Fast Forward to today…
Source: NAR, November 2008 Forecast
Long Term Supply …
Source: NAR, November 2008 Forecast
Richardson Commercial
September 24, 2009By Lawrence Yun, Chief Economist, NARThere is some disappointing news on home sales today, but overall positive news on a broader trend towards stabilization regarding prices and inventory. Existing home sales declined 2.7 percent in August to a seasonally adjusted annual rate of 5.10 million units from a 5.24 million unit pace in July (without
revision). Compared to the same month one year ago, existing home sales were higher by 3.4 percent.
Sales by Price RangeSales by Price Range
The Otteau Report – otteau.com
Where is the bottom of the market?
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)
““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
‘Real Estate is a Bottom up market…’
The Local Inventory Trends:
Source: NAR, November 2008 Forecast
The Local Inventory Trends:
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 59 3 19.7 1 51 2 25.5 6 43 7 6.1
Pton Twp 120 4 30.0 0 93 4 23.3 6 122 14 8.7
W. Windsor 159 25 6.4 1 113 12 9.4 13 100 26 3.8
Lawrence 238 12 19.8 0 200 12 16.7 12 204 27 7.5
East Windsor 218 8 27.3 0 210 17 12.4 11 172 34 5.0
Ewing 276 13 21.2 1 262 11 12.8 11 246 27 9.1
Hamilton 590 39 15.1 1 611 45 13.5 31 530 86 6.0
Hopewell Twp. 194 4 48.5 0 128 10 17.0 1 164 26 6.0
Cranbury 31 0 99.0 0 32 0 99.0 0 0 0 0.0
Plainsboro 118 21 5.6 0 73 12 6.1 7 70 0 0.0
South Brunswick 208 16 13.0 8 206 17 6.1 10 196 21 9.0
Montgom. 145 16 9.1 38 129 12 10.7 39 138 24 5.8
Cum. 2356 161 14.6 50 2108 154 13.7 147 1985 292 6.8
Princeton Boro. Active Inventory
01020304050607080
Boro Activities
Princeton Twp. Inventory
020406080
100120140160180
Twp. Inventory
West Windsor Active Inventory
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West Windsor Actives
Hopewell Twp. Active Inventory
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Hopewell Twp. Actives
Plainsboro Active Inventory
020406080
100120140160180
Plainsboro Actives
South Brunswick Active Inventory
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9/4/
2006
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South Brunswick Actives
Cranbury Active Inventory
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Cranbury Actives
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 59 3 19.7 1 51 2 25.5 6 43 7 6.1
Pton Twp 120 4 30.0 0 93 4 23.3 6 122 14 8.7
W. Windsor 159 25 6.4 1 113 12 9.4 13 100 26 3.8
Lawrence 238 12 19.8 0 200 12 16.7 12 204 27 7.5
East Windsor 218 8 27.3 0 210 17 12.4 11 172 34 5.0
Ewing 276 13 21.2 1 262 11 12.8 11 246 27 9.1
Hamilton 590 39 15.1 1 611 45 13.5 31 530 86 6.0
Hopewell Twp. 194 4 48.5 0 128 10 17.0 1 164 26 6.0
Cranbury 31 0 99.0 0 32 0 99.0 0 0 0 0.0
Plainsboro 118 21 5.6 0 73 12 6.1 7 70 0 0.0
South Brunswick 208 16 13.0 8 206 17 6.1 10 196 21 9.0
Montgom. 145 16 9.1 38 129 12 10.7 39 138 24 5.8
Cum. 2356 161 14.6 50 2108 154 13.7 147 1985 292 6.8
YTD Closed Homes Snapshot:2008 2009
Princeton Boro
59 46
Princeton Twp.
144 113
West Windsor 247 224
Lawrence 228 203
Hamilton 561 521
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.
9/22/09Towns 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 43 7 6.14 6 1 12 27% 1 3 12
Pton -Boro Condo/ Thouses 14 3 4.6 4 1 4 28% 0 2 4
Pton-Boro
Single Family 29 4 7.2 2 (2) 8 27% 1 1 8
Pton Twp: All Styles 122 14 8.7 26 12 34 28% 9 10 18
Pton Twp: Condo/ Thouses 18 5 3.6 13 8 17 16% 5 10 15
Pton Twp:
Single Family 104 9 11.5 13 4 17 16% 4 0 3
Town by Town Analysis 9/22/09Towns 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
100 26 3.8 36 10 19 19% 17 6 28
West Windsor Condo/ T.Houses
14 8 1.7 7 (1) 5 35% 5 0 6
West Windsor
55+
12 0 99 - - - - - - -
West Windsor
Single Family
74 18 4.1 29 11 14 19% 12 6 22
Lawrence: All Styles
204 27 7.5 58 21 38 19% 13 10 26
Lawrence:
Condo/
THouses
94 9 10.4 24 15 18 19% 8 6 10
Lawrence:
55+25 0 99 - - - - - - -
Lawrence:
Single Family
85 18 4.7 34 16 20 23% 5 4 16
Town by Town Analysis 9/21/09Towns 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 Styles246 27 9.1 58 31 59 23% 25 11 26
Ewing : Condo/ T.Houses
45 7 6.4 16 9 8 18% 8 2 8
Ewing 55+: 4 0 99 - - - - - - -Ewing:
Single Family
197 20 9.8 42 22 51 26% 17 9 18
East Windsor:
All Styles
172 34 5.0 38 4 25 14% 17 6 32
East Windsor:
Condo/ THouses
99 19 5.2 25 6 15 15% 11 1 15
East Windsor:
55+
18 0 99 - - - - - - -
East Windsor: Single Family
55 15 3.6 13 (2) 10 18% 6 5 17
Town by Town Analysis 9/21/09
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
164 26 6 25 (1) 32 20% 14 7 15
Hopewell Twp. Condo/ T.Houses
22 6 4 1 (5) 3 14% 1 0 5
Hopewell Twp.:
55+
4 0 99 - - - - - - -
Hopewell Twp:
Single Family
138 20 7 24 4 29 21% 13 7 10
Hamilton: All Styles 530 86 6 100 14 132 25% 48 20 73
Hamilton:
Condo/ THouses 100 15 7 28 12 24 24% 12 5 16
Hamilton:
Single Family 390 69 6 72 3 108 28% 36 15 57
Hamilton: 55+40 2 20 - - - - - - -
Town by Town Analysis 9/21/09Towns 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 100 16 6 21 5 21 21% 15 5 15
Robbinsville
Condo/ T.Houses
46 6 8 7 1 10 22% 7 1 5
Robbinsville
55+ - - - - - - - - - -
Single Family54 10 5 14 4 11 20% 8 4 10
Hightstown Boro: All Styles 55 2 27 10 8 9 16% 4 4 3
Pennington22 3 7 8 5 8 36% 4 2 2
Hopewell Boro:
All Styles 8 3 3 2 (1) 1 13% 2 0 1
Market Activity: Town by Town Analysis 9/21/09Towns 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
65 7 9.2 17 10 8 12% 10 0 20
Plainsboro
Condo/ THouses
34 5 6.8 8 3 5 14% 6 0 13
Plainsboro
55+12 0 12 2 2 1 8% 1 0 1
Plainsboro
Single Family
19 2 9.5 7 5 2 10% 3 0 6
Cranbury:
All Styles33 0 99 5 5 4 12% 3 0 2
Cranbury:
55+5 0 99 0 0 0 0 0 0 0
Cranbury: Single Family
28 0 99 5 5 4 18% 3 0 2
Town by Town Analysis 9/21/09Towns 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
196 21 9 54 3 22 11% 21 18 36
South Brunswick
Condo/ T.Houses
61 10 6 27 17 8 13% 6 8 16
South Brunswick
55+
30 1 30 2 1 3 1% 2 3 3
South Brunswick
Single Family
105 11 9.5 25 14 11 10% 13 7 21
Monroe:
All Styles471 30 16 107 77 57 12% 62 4 57
Monroe:
55+302 27 13 70 43 36 12% 26 3 44
Monroe:
Single Family
168 13 13 37 24 21 13% 36 1 12
9/21/09
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.138 24 5.7 32 8 26 19% 10 9 32
Hillsboro265 41 6.4 62 21 43 16% 13 10 30
Rocky Hill5 0 99 1 1 1 20% 0 0 0
Franklin238 105 75 32% 37 20 59
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.
54Market Scale for Supply & Market Scale for Supply & DemandDemand
High Supply/Low Demand Low Supply/High DemandNormal
Ma
rke
t A
bso
rpti
on
in M
on
ths 1
2
3
4
5
6
7
8
9
10
11
12
No
rma
l
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.
Note: This Market Scale is valid only for absorption rates between 1 and 12 months.
Princeton Borough Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
10 0 99
$500-999k 12 0 99
$1 million - $2 million
11 0 99
$2- $5 million 9 0 99
Princeton Township Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
10 1 10
$500-999k 48 3 16
$1 million - $2 million
39 1 39
$2- $4 million 22 0 99
$4 + 2 0 99
West Windsor Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
8 9 5.7
$500-750k 56 8 3.1
$750-999 29 2 10
$999 + 32 0 99
Lawrence Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$300
105 9 11.6
$300-500 58 6 9.6
$600-700 26 1 26
$700-999 5 1 5
999+ 9 0 99
Ewing Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$150
35 1 35
$150-250 127 11 11.5
$250-450 75 5 15
450+ 6 1 6
Hopewell Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-300 8 5 2.6
300-500 56 5 11.2
500-700 29 2 14.5
700-999 32 0 99
999+ 37 0 99
Understand the Market That You are Buying into…
I want to live in West Windsor…
Market Absorption Scale(Absorption Rate in Months)
5-6 months absorption rate indicates a normal market.
Understand the Market You’re Buying Into
West Windsor<$500,000
5-6 Months Market Absorption Rate indicates a normal market.
Active Pending Absorption Rate
All listings 45 8 5.6 Months
Townhouses 8 3 2.7 Months
3+ Bedroom Townhouses
3 3 0 Months
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