princeton boro market update
DESCRIPTION
Report on the state of the Princeton Borough, NJ real estate market. Offers insights into inventory trends, sales patterns and price trends.TRANSCRIPT
Weichert, Princeton Office
Offers analysis of the Princeton Borough, NJ
Market Trends.
Prepared by:
Joshua D Wilton
Broker/ Sales Associate
Weichert, Princeton
O 609-921-1900
Agenda:
1.Inventory: Inventory in the local markets is a great indicator of the health
of the market, too much inventory indicates a slow pace of sales and
declining prices.
2.Sales Patterns: Each segment of the market is different; single family v townhouse and the moderate priced vs
the luxury market.
3.Absorption Rates: Indicates the pace of sales in a given market.
4.Pricing: Reviews price reduction trends
1. Inventory Pattern:• As depicted in the next slide the available
inventory in Princeton Borough is 19 units or nearly 30% lower than at the same point in
2006.
• This does not indicate a market correction merely that there is less inventory available, the
first step towards a normalized market.
• The following slides depict the inventory patterns in the Borough. As you can see on the
slide 6, we are at a 3 year low for inventory.
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 5 12.6 0 51 3 17.0 5 46 10 4.6
Pton Twp 139 11 12.6 1 111 7 15.5 9 146 17 9.0
W. Windsor 169 25 5.6 5 138 21 6.6 21 105 38 2.7
Lawrence 236 14 16.9 3 203 16 12.7 18 187 35 5.3
East Windsor 231 13 17.8 231 211 25 8.4 12 193 30 6.4
Ewing 282 26 10.8 5 246 11 22.4 12 243 24 10.1
Hamilton 583 50 11.7 0 638 36 17.7 25 575 97 6.0
Hopewell Twp. 205 13 15.8 7 137 17 8.1 20 182 12 13.0
Cranbury 38 1 38.0 1 37 1 37.0 3 26 1 26.0
Plainsboro 145 14 10.4 1 119 10 11.9 16 87 12 7.3
South Brunswick 241 32 7.5 19 207 24 8.6 13 230 17 13.0
Montgom. 169 35 4.8 59 144 29 5.0 43 0 0 0.0
Cum. 2503 239 10.5 332 2242 200 11.2 197 2020 293 6.9
Princeton Boro. Active Inventory
01020304050607080
Boro Activities
Princeton Boro. Condo/Townhouses Active Inventory
0
2
4
6
8
10
12
14
16
Princeton Boro C/T Inventory
Princeton Boro. Single Family Active Inventory
0
5
10
15
20
25
30
35
40
45
50
Princeton Boro Single Family Inventory
2. Sales Patterns:• In the Borough Single Families are selling better than the townhouses and the condos.
• The single family absorption rate is 6.6 months vs 13 months for the condo townhouse
market (slide 10).
• This is occuring due to the fact that the Borough condos and townhouses are extremely
expensive in comparison with neighboring towns and financing for condos with less than 4
units has become more stringent.
• 38% of the Condo/ Townhouse inventory has taken a price reduction in the last 30 days vs only 24% for the single family market (slide
10).
Town by Town Analysis 7/127/09Towns Active
ListingsPending Sales 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 6 7.7 6 0 13 28% 3 2 5
Pton -Boro Condo/ Thouses
13 1 13 2 1 5 38% 0 1 0
Pton-Boro
Single Family
33 5 6.6 4 (1) 8 24% 3 1 5
4. Absorption Rate4. Absorption RateThe Effect of ‘Absorption Rate’ The Effect of ‘Absorption Rate’
on the Housing Marketon the Housing MarketWeichert 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.
Market Absorption Scale(Absorption Rate in Months)
5-6 months absorption rate indicates a normal market.
Town by Town Analysis 7/127/09Towns 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 6 7.7 6 0 13 28% 3 2 5
Pton -Boro Condo/ Thouses
13 1 13 2 1 5 38% 0 1 0
Pton-Boro
Single Family
33 5 6.6 4 (1) 8 24% 3 1 5
Princeton Borough Absorption Rate By Price
Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
8 1 8
$500-750k 8 3 2.6
$750-999 7 2 3.5
$999-$1.5 million
11 0 99
$1.5 million + 13 1 13
• The Absorption Rate in the Borough is highest for the condo v the single family
home market.
• Slide 14 depicts how Absorption Rate goes up in the higher price ranges, indicating that the majority of the transactions are taking place in the moderate price ranges. The
higher the price, the tougher the market.
Princeton Twp. Condo/Townhouses Absorption Rate
0
20
40
60
80
100
120
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
Princeton Township C/T Absorption Rate
Princeton Twp. Single Family Absorption Rate
0
10
20
30
40
50
60
70
80
90
Princeton Township Single Family Abs. Rate
4. Price Trends4. Price Trends
• The next several slides show the overall pricing trends in the Borough. The highlighted area in the next slide shows that over 28% of the overall inventory was reduced in the past 30 days.• Condos were reduced at a faster pace than single families.
Town by Town Analysis 7/127/09Towns 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 6 7.7 6 0 13 28% 3 2 5
Pton -Boro Condo/ Thouses
13 1 13 2 1 5 38% 0 1 0
Pton-Boro
Single Family
33 5 6.6 4 (1) 8 24% 3 1 5
Princeton Boro. Active YTD Listings v Pending Analysis
0
10
20
30
40
50
60
70
80
Princeton Boro Active Listings
Princeton Boro Pendings
Princeton Boro Price Reductions
4. Price Trends4. Price Trends
• The next slide shows the relationship between price improvements and buyers placing contracts on houses.• As the overall number of price reductions increased in the Borough, buyers jumped in to buy.• Buyers have been motivated by deals for the past several years and it has been no different in the Borough.•
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
10
20
30
40
50
60
70
Princeton Pendings
Princeton Price Reductions
Princeton Borough Market Statistics Source: Trend MLS
Princeton Twp. Residential Transactions Settled: June 2009 Source: Trend MLS
4. Price Trends4. Price Trends• Of the 9 homes that settled in the Borough in June, 6 were under a million dollars. Keep in mind that as of 7/30/09, 23 homes are for sale under a million dollars in the Borough and 23 homes are for sale over a million dollars.• Another way to look at this is as follows:The seller to buyer ratio under $999k is 3:1The seller to buyer ratio over $999k is 11:1• The over $1million market will continue to be challenged and the super luxury market will be challenged even further.