Princeton Real Estate Market Presentation June 2017

Princeton AreaPrinceton Area
Real Estate Market UpdateReal Estate Market Update
June 2017June 2017
Josh Wilton
Managing Broker
Weichert Realtors
Princeton Office

“
Dave Ramsey
Financial Guru
When getting help with money,
whether it is insurance, real estate or
investments you should always look for
someone with the
heart of a teacher,
not the heart of a salesman.

Agenda
The Market: The Big Picture
Understanding the Local Market(s) You’re
Buying Into or Selling Out Of
Process and Strategies for Buyers and
Sellers
Agenda

What are you hearing about the market?

Economic factors
6
Now ** 2013 2010
Gas per gallon (NY area) $2.45 $3.81 $2.73
Stock market (Dow Jones) 21,344 14,776 11,578
Avg. 30-year fixed rate 4.25%* 4.43% 4.71%
Consumer confidence rating 117.7 76.2 63.4
Household income $56,516 $53,046 $49,276
Unemployment rate 4.5% 7.4% 9.3%
Foreclosures 848,609 1,369 ,405 2,871,891
2010 to Current Comparisons

Listing Inventory
7
• BIG deal in 2016
• BIGGER deal in 2017
• Existing inventory levels down 11% over a year (nationally)

Median Seller Tenure In Home
8

First-Time Homebuyers make up
Majority of 2017 Home buyers*
9
• 52% First Time Homebuyers
• 61% Millennial Buyers (35 years and under)
• Millennials skip over starter homes for move-up properties
• NAR reported in 2016 17% of buyers under 25 year saved down
payment monies within one year

Source: 5 Real Estate Trends That Will Dominate 2016. Realtormag.realtor.org.
• Rental costs are skyrocketing, and the costs are
likely to only go up in the new year. More than 85
percent of the nation’s markets have rents that exceed
30 percent of the income of renting households.
• YTD in Princeton landlords have retained nearly 100%
of their asking price.
Rents go up even higher

The boom….The New Jersey MarketThe Statewide Picture

The New Jersey MarketThe Statewide Picture
Source: NJAR 10K Research

The Local Market
Real Estate is Local
It’s Local to the County
It’s Local to the Town
It’s Local to the Price Point
It’s Local to the Neighborhood/Development
It’s Local to the Street

Icando myownlocal
researchonline…
You’re probably thinking….

The boom….The Local MarketThe Local Picture

Mercer County
Supply & Demand
Price Trends
Source: NAR, November 2008 Forecast
The Local Picture

Long Term Demand …
http://lwd.dol.state.nj.us/labor/lpa/dmograph/est/est_index.html
Long Term Demand for Housing
2008 2009 2010 2011 2012 2013 2014 2015 2016

Long Term Demand …
http://lwd.dol.state.nj.us/labor/lpa/pub/factbook/merfct.pdf
Long Term Demand for Housing

Source: NJAR 10K Research Data
Mercer/ Middlesex County
Market Drivers
1. Trains/Schools/Affordability
2. Schools/Trains/Affordability
3. Convenience/Town Center/Lifestyle
4. Affordability
5. Schools
6. Trains

West Windsor
Train
Schools
Lifestyle
Affordability

Source: NJAR 10K Research DataSource: https://education.state.nj.us/pr/

West Windsor Market Activity
Single Family Homes
Source: Trend MLS
2012 2013 2014 2015 2016 2017

Source: Trend MLS
2012 2013 2014 20162015 2017

SF DOM
Source: Trend MLS
2012 2013 2014 20162015 2017

Week of 6/15
Year over Year Inventory
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2017
Princeton 181 160 203 190 224 221 187 162 139 123 134
WW 149 118 151 135 165 140 135 80 100 101 104
Lawrence 201 221 206 242 239 234 199 157 167 175 145
East
Windsor 196 204 195 195 235 236 191 142 140 131 90
Ewing 251 258 217 258 305 306 265 200 206 226 149
Hamilton 486 517 609 569 606 671 548 431 494 487 376
Hopewell 193 161 170 183 173 158 164 156 191 183 167
Cranbury 20 38 31 29 27 27 19 23 21 28 28
Plainsboro 138 119 88 77 117 118 90 57 62 65 61
SB 241 223 230 216 305 301 236 196 166 198 171
Montgomer
y 180 150 157 158 182 171 156 165 120 124 137

Source: NJAR 10K Research DataSource: NJAR 10K Research
East Windsor
Train
Schools
Lifestyle
Affordability

East Windsor Market Activity
Single Family Homes
Average Sale Price
2012 2013 2014 2016
Source: Trend MLS
2015 2017

Single Family Homes
Average Days on Market
Source: Trend MLS
2012 2013 2014 20162015 2017

Single Family Homes
List to Sale Price Ratio
Source: Trend MLS
2012 2013 2014 20162015 2017

Condos & Townhouses
Average Sale Price
Source: Trend MLS
2012 2013 2014 20162015 2017

Condos & Townhouses
Source: Trend MLS
2012 2013 2014 20162015 2016

Condos & Townhouses
Source: Trend MLS
2012 2013 2014 20162015 2017

Lawrenceville
Train
Schools
Lifestyle
Affordability

Lawrenceville Market Activity
Single Family Homes
Average Sale Price
2012 2013 2015
Source: TrendMLS
2014 2016 2017

Single Family Homes
Source: TrendMLS
2012 2013 20152014 2016

Single Family Homes
Source: TrendMLS
2012 2013 20152014 2016 2017

Condos & Townhouses
Average Sale Price
Source: TrendMLS
201420132012 2015 2016 2017

Condos & Townhouses
Source: TrendMLS
2012 2013 2014 2015 2016 2017

Condos & Townhouses
Source: TrendMLS
2013 20152014 20162012 2017

Source: NJAR 10K Research DataSource: NJAR 10K Research
Princeton
Train
Schools
Lifestyle
Affordability

Source: NJAR 10K Research DataSource: NJAR 10K ResearchSource: TrendMLS

Princeton Market Activity
Source: TrendMLS

The Local Market
It’s Local to the Town
It’s Local to the Price Point
It’s Local to the Neighborhood/Development
It’s Local to the Street

Strategies for
Buying and Selling
in Today’s Market

When’s the best time to Buy/Sell?
Source: Trend MLS

Be Strategic
Think Hyper Local

Stats for Hamilton Township
May 16 – May 31
Style Active Listings
Under Contract in
30 Days
Absorption Rate
New Listings in 30
Days
Net Inventory
Gain/Loss
Price Reductions in
30 Days
% of Invent.
Reduced
Closed Sales in
30 days
All Styles 377 85 4.43 124 39 111 29.44 101
Single Family
297 73 4.06 96 23 92 30.97 85
Condo/ Townhouse 66 7 9.42 22 15 17 25.75 12
Adult Community
14 5 2.8 6 1 2 14.28 4
Hamilton
$0-125
54*
(10)
14
3.8
(3.1)
16 2 12 22% 23

Pending in last 30
Days
Absorption Rate
New Listings in 30
Days
Net Inventory
Gain/Loss
Price Reductions in
30 Days
% of Invent.
Reduced
Closed Sales in
30 days
All Styles 127 26 4.8 50 24 40 31.5 37
Single Family
104 17 6.1 35 18 35 33.7 23
Condo/ Townhouse 16 7 2.3 12 5 2 12.5 12
Adult Community
7 2 3.5 3 1 3 42.9 2
SF
450-750
46*
(10)
10
4.6
(3.6)
10 8 9 19% 21
6/1/17

Plainsboro Market Activity
Under Contract in
30 Days
Absorption Rate
New Listings in 30
Days
Net Inventory
Gain/Loss
Price Reductions in
30 Days
% of Invent.
Reduced
Closed Sales in
30 days
All Styles 66 20 3 32 12 26 40 21
Single Family
33 5 7 13 8 13 39 6
Condo/ Townhouse 26 15 2 18 3 10 38 15
Adult Community
7 0 99 1 1 3 43 0

South Brunswick Market Activity
Under Contract in
30 Days
Absorption Rate
New Listings in 30
Days
Net Inventory
Gain/Loss
Price Reductions in
30 Days
% of Invent.
Reduced
Closed Sales in
30 days
All Styles 188 39 5 59 20 52 28 43
Single Family
124 22 7 39 17 32 26 23
Condo/ Townhouse 45 16 3 16 0 17 38 17
Adult Community
19 1 19 4 3 3 16 3

Lawrence
Under Contract in 30
Days
Absorption Rate
New Listings in 30
Days
Net Inventory
Gain/Loss
Price Reductions in
30 Days
% of Invent.
Reduced
Closed Sales in
30 days
All Styles 161 34 5 49 15 82 51% 28
Single Family
113 19 6 32 13 52 46% 16
Condo/ Townhouse 44 13 3 16 3 29 66% 11
Adult Community
4 2 2 1 -1 1 25% 1
Lawrence
800+ 17 1 17 3 2 4 23% 0

Robbinsville Market Activity
6-1-2017
Under Contract in
30 Days
Absorption Rate
New Listings in 30
Days
Net Inventory
Gain/Loss
Price Reductions in
30 Days
% of Invent.
Reduced
Closed Sales in
30 days
All Styles 115 26 4.4 38 12 19 16.5% 19
Single Family
60 14 4.3 20 6 6 10.0% 7
Condo/ Townhouse 51 12 4.3 18 6 13 25.5% 12
Adult Community
4 0 99 0 0 0 0 0

2017
Top Seller Negotiating Strategies…
1.Stage it (Pretty it Up)
2.Fix it First
3.Price it Right
4.Stay in Control

All Negotiations, including real estate, are all about negotiation and control.
Home Pricing
Who is in control?

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.
What is Home Staging?

“Wow…. I could live here!”

Buyers Only Know What They See …

Home Staging
*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 investment in home staging is always less than your first price reduction!”

Home Staging
Who is in control?

The Impact of Inspection & Repairs
on the Salability of Your Home..…
A Certified Home Inspector’s report will review:
Condition of the home's HVAC, Plumbing and Electrical Systems
The roof, attic, and visible insulation
Walls, ceilings, floors, windows and doors
The foundation, basement, and visible structure
It will also advise if any potential environmental hazards were observed

• Why do a Pre-Inspection?
– Fix/ Disclose/ Permit EVERYTHING before going
on market
– Removes buyer objections/ fears
– Reduce the risk of going ‘off market’ for a buyer
who ends up killing the deal
– You stay in control
Pre-Inspection

Pre - Inspection
Who is in control?

The Impact of Your Initial List Price

• Promotes a sense of urgency among buyers &
agents (fear of loss)
• Generates interest and showings
• Sets the stage for multiple offers in the first 30
days
• Offers tend to be higher in relation to list price
• Results in highest price in shortest time
Effects of “Right” Pricing

• Buyer excitement diminishes quickly
• Extends time house is on the market
• Results in price reductions
• May attract “bargain hunters” and discounted offers
• Results in a lower selling price
Effects of Over Pricing:

Negotiations are about leverage, use the listing
price as yours…
PTA suggested Market Value of
$780,000
Listed at $769,000
8 Days on Market
11 Offers
Sold for $805,000
The seller had control
West Windsor

Princeton
36 Mercer St.
The Price Trend Analysis suggested Market Value of $1.250
We recommended listing at $1.1 million

Princeton
36 Mercer St.
• Pre-inspection
• Staged
• Right Pricing
Sold for $1.350 million, cash in 7 days. No contingencies.

Negotiations are about leverage, use the listing
price as yours…
Listed at $544,900
Reduced to $535,000
Reduced to $509,000
Reduced to $499,000
96 Days on Market
1 Offer
Sold for $490,000
The buyer had control

2017
Top Buyer Negotiating Strategies…
1.Pay Now or Pay More Later (core market, schools, trains and
towns)
2.Don’t Wait to Offer on an ‘Over-Priced’ Home
3.Use an Escalation Clause in High-Demand Markets & in
multiple bid situations
4. ‘Thin Slice’ the Market. Get hyper local

Buyer Negotiation Tips in a Fast Market
1. Understand the process before you start shopping.
2. Have mortgage pre-approval from a local, respected,
reliable lender
3. Put a significant amount in escrow if possible
4. Be as flexible as possible with your closing date
5. Remove as many contingencies as possible (inspection,
appraisel, etc)
6. Use an Escalation Clause

Financial Services
Carlos A. Machado
Gold Services Manager
Princeton Office
NMLS #4384
Weichert Financial Services
908-307-8317
cmachado@weichertfinancial.com

We will help you to find out your
Purchase Power !

•For Sellers: To make sure they have all the
information they need to choose an offer
•For Buyers: Buying Power & Documentation
My Job…

As the seller, do I get to see the
pre-approval letter?
• The Pre-approval letter must be with all the offers.
• Cash deals should be accompanied with a "proof of
funds" which is a bank statement or letter from the
bank or escrow agent
• Make sure the letter is not a pre-qualification (this
is only an opinion letter)

Your Mortgage Loan Checklist
• Two Forms of identification (including 1
government photo ID.
• Pay stubs for the past 30 days.
• Your most recent last two years' W-2.
• All pages of your signed personal tax
returns, for the two most recent years.
• All pages of your most recent bank
statement.
• (sellers, make sure that this was done)

Experience a smooth closing!
• Don’t apply for credit.
• Don’t be late with payments.
• Don’t make a large purchase.
• Don’t be late with documents.
• Try not to change jobs.
Following these tips can ease you down the road toward a smooth
closing.

Weichert Financial GSM
Carlos Alberto Machado
Gold Service Manager
908-307-8317
Princeton Office
NMLS#4384

I look forward to meeting with you
Carlos A. Machado
Gold Services Manager
Princeton Office
NMLS #4384
Weichert Financial Services
908-307-8317

Weichert Family of Companies
What will a real estate
company do for me?

Source: 2012 NAR Profile of Home Buyers and Sellers
This is
where
you win
or lose
the sale

Fall Thru Analysis ~ Past 90 Days
Reason for Fall Thru Total # Fall Thrus % of Total Fall Thrus
Home Inspection 659 39.2%
Buyer Financing 416 24.8%
Buyer Changed Mind 185 11.0%
Attorney Review 72 4.3%
Appraisal 71 4.2%
Contingency of buyer/seller house purchase 44 2.6%
Short Sale Declined 39 2.3%
Another offer (buyer) came in 30 1.8%
Seller Changed Mind 23 1.4%
HOA Docs or Board not approved 21 1.3%
Buyer/Seller Passed Away or illness 14 0.8%
Foreclosure or Bankruptcy 14 0.8%
Title Issues 13 0.8%
Deal Came Back together & Closed or Set to Close 11 0.7%
Other 36 2.1%
Unknown 31 1.8%
Total 1679* 100%

MakingMaking Your Purchase asPurchase 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.

Resource and Website ListResource and Website List
www.trendmls.com
www.realtor.org
www.njar.com
www.Otteau.com
www.Pre-listing-inspection.com
www.Housemaster.com
www.Stagingshoppingcenter.com
www.realtytrac.com
www.njar.com/10k
www.keepingcurrentmatters.com
https://education.state.nj.us/pr/

Princeton Real Estate Market Presentation June 2017

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