september market seminar part i

Weichert, Princeton Office September Market Update

Seminar

Offers analysis of the Princeton & Greater

Princeton, NJ real estate markets & effective

strategies to buy and sell.

http://upload.wikimedia.org/wikipedia/en/b/b7/Census_Bureau_map_of_Princeton_Township%2C_New_Jersey.gif

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…

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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15000

20000

25000

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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 …


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:


07 Inventory Ct

07 Pending sales

07 Abs. Rate

07 Active w/ Contracts

08 Inventory Ct

08 Pending Sates

08 Abs. Rate


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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250

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


08 Inventory Ct

08 Pending Sates

08 Abs. Rate


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:



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







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








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






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 - - - - - - -








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







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








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






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

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

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t A

bso

rpti

on

in M

on

ths 1

2

3

4

5

6

7

8

9

10

11

12

No

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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


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



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



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



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



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



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…

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