Created to give clarity as to the overall market trends, show how 'local' real estate really is and to give strategies for buyers and sellers to make good decisions in a tough market.

1. Making Sense of the Real Estate Market of 2009 Presented By: Joshua Wilton Broker/ Manager Princeton Office [email_address] Joshwilton.net Weichert, Princeton’s Market Seminar Each WEICHERT® franchised office is independently owned and operated. ®

3. What are you hearing about the economy?

4. Job Market Retrenches in 2008 thousands Source: Bureau of Labor Statistics

5. Auto Sales at Lowest Level Since 1992 Source: Autodata

6. Financial Turmoil Not Just a U.S. Problem Source: Haver Analytics

7. Consumer Sentiment Not This Low Since Early 1980s Source: University of Michigan 1966Q1 = 100

8. Homeowners Also Feel Pinched by Decline in Equity – Down $1.1 Trillion

9. Household Net Worth Down $2.7 Trillion from Peak Source: Federal Reserve

10. The ‘recession’ officially started in December 2007 Source: Federal Reserve

11. What about the Housing Market…?

12. U.S. Existing Home Sales at the Bottom? Source: NAR

13. Source: NAR Home Sales Starting to Recover in Some Areas as Affordability Improves

14. Pending Home Sales Turning the Corner? Source: NAR

15. As Months Supply of Homes Rises…

16. … Prices Retreat % chg – year ago

17. Listings 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. Increase % 2008 from 2007 NY/CT (Ashby) -2.06% Passaic/Hudson/Bergen NJ (Bixon) -.83% Western Central NJ/Lehigh Valley PA (McDonald) +2.40% Northern and Central NJ (Prevete) +.66% Eastern Central/Shore Points NJ (Waters) -1.63% Southern NJ (Williams) +2.69%

18. Sales In New Jersey… Source: NAR Quarterly at annual rate

19. No Quick Rebound in Housing Market Source: NAR, November 2008 Forecast nar.com 2008 2009 2010 Existing Home Sales (mil) 5.02 5.32 5.62 New Home Sales (mil) 0.49 0.41 0.52 Housing Starts (mil) 0.94 0.78 0.89 30 – year FRM (%) 6.1 6.4 6.7 1 – year ARM (%) 5.2 5.0 5.0 Existing Home Price Growth (%) -9.3 1.1 5.1 New Home Price Growth (%) -7.7 1.4 5.4

21. 2009: Foreclosure Forecast Within Company-Owned Footprint NY, NJ, PA, CT, DE DC, MD, VA Region 12/22/2008 12/29/2008 1/5/2009 1/12/09 1/19/09 Ashby 12,001 15,003 14,736 14,778 13,837 Bixon 6,844 6,682 6,605 6,638 6,546 McDonald 7,064 7,194 7,121 6,216 7,333 Minsky 14,411 14,468 15,224 15,453 16,253 Prevete 8,425 8,300 8,150 8,116 8,077 Waters 9,627 9,602 9,620 9,514 9,474 Williams 6,158 6,108 6,225 6,236 6,255 Huffman/Chappell (MD/DC) 16,953 16,376 16,522 18,112 18,232 Green (VA) 23,722 23,554 23,570 23,561 23,403 Totals 105,205 107,287 107,773 108,624 109,410

22. Mercer County NJ Foreclosure Outlook Over 1800 Foreclosure in Mercer County. Less than 36 foreclosures in Princeton. Less than 35 foreclosures in West Windsor. Majority of the 1800+ are in Trenton. - foreclosurepoint.com

23. 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)

26. Source: MLS 2008 v 2009 Open House Traffic

27. 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 Local 5. Real Estate is Local

28. Joshua D. Wilton, Manager Strategies for Buying

29. 1. Understand the Local Market That You are Buying into…

30. Sample Market Absorption Rate 107 current active listings 4 reported sales in last 30 days = 24.3 months absorption rate Anytown., NJ 5-6 Months Market Absorption Rate indicates a normal market.

31. Market Absorption Scale (Absorption Rate in Months) 5-6 months absorption rate indicates a normal market.

32. 2007 - 2009 Core Market Comparison: Week of 2/23 067 Inven. Count 07 Pending Sales (prev. 30 days) 07 Absorp. Rate 07 Active w/ Contr. (prev. 30 days) 08 Inven. Count 08 Pending Sales (prev. 30 days) 08 Absorp.Rate (months) 08 Active w/ Contr. (prev. 30 days) 09 Inven. Count 09 Pending Sales (prev. 30 days) 09 Absorp. Rate (months) 09 Active w/ Contr. (prev. 30 days) Pton Boro 38 5 7.6 7 49 2 24.5 3 42 1 42 3 Pton. Twp. 106 5 14.4 16 113 11 10.2 13 102 2 51 6 W. Windsor 143 23 6.2 8 97 14 6.9 10 123 8 9.1 0 Plainsboro 130 8 16.2 8 97 14 6.9 10 73 8 9.1 0 Montgom 139 11 12.6 ----- 116 14 8.3 ----- 104 10 10.4 ----- Lawrence 193 19 11.8 17 184 19 9.6 15 157 16 9.8 23 Hopewell Twp. 165 15 11 9 132 13 10.1 16 114 13 8.7 6 Cum. 775 86 9.01 70 815 89 9.1 73 715 60 11.9 57

33. Town by Town Analysis 2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Princeton Boro: All Styles 42 1 42 3 5 1 6 14% 1 0 Pton -Boro Condo/ Thouses 12 1 12 2 0 (3) 2 17% 1 0 Pton-Boro Single Family 30 0 99 1 5 4 4 14% 0 0 Pton Twp: All Styles 102 2 51 6 29 21 16 16% 8 3 Pton Twp: Condo/ Thouses 20 1 20 1 4 2 1 5% 3 0 Pton Twp: Single Family 82 1 82 5 24 18 15 18% 5 3

34. Town by Town Analysis 2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings West Windsor: All Styles 123 10 12.3 19 52 23 30 24% 7 5 West Windsor Condo/ T.Houses 26 2 12 4 12 7 4 15% 2 1 West Windsor 55+ 10 2 5 - - - - - - - West Windsor Single Family 87 6 14.6 15 39 18 26 29% 5 4 Lawrence: All Styles 157 16 9.8 23 39 0 44 28% 13 7 Lawrence: Condo/ THouses 68 8 8.5 14 20 (2) 21 30% 10 3 Lawrence: 55+ 10 0 99 - - - - - - - Lawrence: Single Family 79 8 9.9 9 19 2 23 29.1 3 4

35. Town by Town Analysis 2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Ewing: All Styles 192 12 16 22 41 7 41 21% 34 9 Ewing : Condo/ T.Houses 37 2 18.5 4 9 3 8 22% 6 1 Ewing: 55+ 4 1 4 - - - - - - - Ewing: Single Family 151 9 16.7 18 32 5 33 22% 28 8 East Windsor: All Styles 181 3 60 14 52 35 39 22% 17 14 East Windsor: Condo/ THouses 88 2 44 7 23 14 17 19% 9 4 East Windsor: 55+ 11 0 99 - - - - - - - East Windsor: Single Family 82 1 82 7 29 21 22 27% 8 10

36. Town by Town Analysis2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Hopewell Twp.: All Styles 114 13 8.7 6 31 12 20 17% Hopewell Twp. : Condo/ T.Houses 15 3 5 0 8 5 3 20% Hopewell Twp.: 55+ 3 1 3 - - - - - - - Hopewell : Single Family 96 9 10.6 6 23 8 17 17% Hamilton: All Styles 528 86 6.1 24 143 33 123 23% Hamilton: Condo/ THouses 81 23 3.5 6 38 9 29 35% Hamilton 55+ 40 2 20 - - - - - - - Hamilton: Single Family 407 61 6.6 18 105 26 94 23%

37. Town by Town Analysis 2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Rbnville.: All Styles 101 28 3.6 10 25 (13) 24 24% 5 4 Rbnville. : Condo/ T.Houses 44 14 3.1 6 13 (7) 10 23% 2 1 Rbnville.: 55+ 0 0 0 - - - - - - - Rbinville.: Single Family 57 14 4 4 12 (6) 14 25% 3 3 HightstownBoro: All Styles 40 7 5.7 2 8 (1) 14 35% 8 2 Pennington Boro: All Styles 16 4 4 1 4 (1) 3 19% 1 3 Hopewell Boro: 15 2 7.5 0 3 1 3 20% 3 0

38. Market Activity: Town by Town Analysis 2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings PlainsboroAll Styles 73 8 9.12 0 24 24 7 10% 12 5 Plainsboro Condo/ THouses 40 8 5 0 11 3 3 7.5% 3 5 Plainsboro 55+ 8 0 99 0 1 - - - - - Plainsboro Single Family 25 0 99 3 12 12 4 16% 1 0 Cranbury: All Styles 27 0 99 0 6 6 5 6% 5 0 Cranbury: 55+ 4 1 4 0 0 0 1 25% 1 0 Cranbury: Single Family 23 0 99 0 6 6 4 17% 4 0

39. Market Activity: Town by Town Analysis 1/19/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings South Brunswick All Styles 206 13 16 10 49 26 79 38% 27 7 South BrunswickCondo/ T.Houses 62 7 8.8 5 19 7 26 41% 11 6 South Brunswick 55+ 22 0 99 0 1 1 3 13% 1 0 South Brunswick Single Family 122 5 24 5 29 19 50 41% 15 1 Monroe: All Styles 433 19 23 15 79 45 76 17% 41 1 Monroe: 55+ 297 14 21 10 53 29 51 18% 21 0 Monroe: Single Family 140 5 29 5 26 16 25 18% 20 1

40. Mercer County Residential Settled December 2008 Source: Trend MLS

41. Understand the Market That You are Buying into… ‘ I want to live in Plainsboro because of the schools and the trains…’

42. Market Activity: Town by Town Analysis 2/9/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings PlainsboroAll Styles 73 8 9.12 0 24 24 7 10% 12 5 Plainsboro Condo/ THouses 40 8 5 0 11 3 3 7.5% 3 5 Plainsboro 55+ 8 0 99 0 1 - - - - - Plainsboro Single Family 25 0 99 3 12 12 4 16% 1 0

43. Understand the Market That You are Buying into… 73 current active listings 8 reported ‘pending’ sales in last 30 days = 9.12 months absorption rate Plainsboro , NJ All Prices 5-6 Months Market Absorption Rate indicates a normal market.

44. 11 current active listings 2reported ‘pending’ sales in last 30 days = 5.5months absorption rate Plainsboro, NJ Single Famlies, under $550k 5-6 Months Market Absorption Rate indicates a normal market. Understand the Market That You are Buying into…

45. 13 current active listings 0 reported ‘pending’ sales in last 30 days = 99 months absorption rate Plainsboro, NJ Single Families, over $550k 5-6 Months Market Absorption Rate indicates a normal market. Understand the Market That You are Buying into…

46. 2. ‘I am going to time the Market and buy at the peak inventory level and when no one else buys…’ Source: MLS

47. Source: MLS Weekly Guests Thru the Weichert Princeton Open Houses, 2007

48. Source: MLS Inventory Levels, Princeton, New Jersey, 2007

49. 3. ‘I am going to wait until the price comes down further and then make an offer…’ Source: MLS

50. Town by Town Analysis 1/19/08 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Princeton Boro: All Styles 39 2 19 1 7 4 8 21% 6 2 Pton -Boro Condo/ Thouses 13 1 13 1 2 0 3 31% 3 2 Pton-Boro Single Family 26 1 26 0 5 4 4 15% 3 0 Pton Twp: All Styles 104 6 17.4 7 19 6 9 9% 7 1 Pton Twp: Condo/ Thouses 20 0 99 0 2 2 3 15% 0 0 Pton Twp: Single Family 84 6 14 7 17 4 6 7% 7 1

51. Source: trend mls Relationship of Price Reductions to ‘Pending Sales’

52. Source: trend mls Relationship of Price Reductions to ‘Pending Sales’

53. Source: trend mls Relationship of Price Reductions to ‘Pending Sales’

54. 4. I don’t want to buy a house and then watch it drop in value!

55. The Real Estate Market is not like the Stock Market. If you buy $400,000 in stock you need $400,000 in cash. If you buy a $400,000 home you need only $14,000 down-payment.

56. Purchase Price $329,000 Loan Amount $281,000 Down Payment $11,515 Monthly P&I $1,590 Appreciation/Depreciation Home Value 1st Year -7% $305,970 2nd Year 0% $305,970 3rd Year 1% $309,030 4th Year 3% $318,301 5th Year 5% $334,216 5 Year Appreciation/Depreciation $5,216 Tax Benefit Rent @ $1600/mo 1st Year $5,000 $19,200 2nd Year $5,000 $19,200 3rd Year $5,000 $19,200 4th Year $5,000 $19,200 5th Year $5,000 $19,200 5 Year Total $25,000 $96,000 Total $30,216 Create Equity v Pay Rent

57. Factors to consider when buying and selling… Source: MLS Inventory(supply and demand) Interest Rates

58. Interest Rates Remain Low Source: Freddie Mac

59. Princeton Twp. Inventory Trend

60. West Windsor Inventory Trend

61. Hopewell Twp. Inventory Trend

62. Hamilton Inventory Trend

63. Lawrence Inventory Trend

64. East Windsor Inventory Trend

65. Plainsboro Inventory Trend

66. Montgomery Inventory Trend

67. Mike Sondern, Gold Services Manager/ Loan Officer Financial Benefits and Process of Home-Ownership.

68. Incentive From the Government First-time homebuyers can receive a tax credit up to $8000!

69. Tax Credit Overview Distribute NAR Tax Credit Overview handout Amount Ten percent of the cost of home, not to exceed $7,500 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

72. How much house can I really afford?

73. Your Buying Power Today Ample supply of homes on market Historically low interest rates + = Your best opportunity in years to afford your dream home Many financing solutions available +

74. Interest Rates Remain Low Source: Freddie Mac

76. Joshua D. Wilton, Manager Strategies for Selling

77. Understand the Market That You are Selling Out of … I live in Montgomery

78. Market Absorption Rate Comparable Properties 91 current active listings 5 reported ‘pending’ sales in last 30 days = 18.2 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ All Inventory

79. Market Absorption Rate Comparable Properties 60 current active listings 4 reported ‘pending’ sales in last 30 days = 15 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ 4+ Bed, Single Family

80. Market Absorption Rate Comparable Properties 21 current active listings 3 reported ‘pending’ sales in last 30 days = 7 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ 4+ Bed, Single Family >$600k

81. Market Absorption Rate Comparable Properties 13 current active listings 0 reported ‘pending’ sales in last 30 days = 99 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ 4+ Bed, Single Family $600 - $800k

83. Hopewell Township ‘Impact of Pricing’ 17 Pending Homes with Price Improvement Average Days on Market: 105 List to Sale Price Average: 90% Total Value Loss: $918,200 Average List Price: $552,000 Average of $54,011 reduction per property

84. Hopewell Township ‘Impact of Pricing’ 20 Homes that went ‘Pending’ With No Price Improvement Average Days on Market: 53.1 12 Homes (60% of the 20 homes) w/ DOM of 30 Days or Less Projected 98% of List Price Retained

85. ‘ Great speech but does it really work?

88. 2 . The Effect of Staging on the Value of a Your Home .

89. 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 .

90. Non-Staged The Way You Live In Your Home…

91. … And The Way We Market And Sell A House Are Two Different Things. Staged

92. “ The Investment in Home Staging is Always Less than Your First Price Reduction!”

93. Non-Staged Buyers Only Know What They See …

94. … Not The Way It Is Going To Be. Staged

95. 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.

96. Why Promote Home Staging ? 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.

97. The average marketing time of an ASP Staged vs. non-Staged home is 80% less . Why Promote Home Staging ?

98. 3. The Effect of ‘ Pre-Inspection’ on the Sale of Your Home.

99. What is ‘ Pre-Inspection?’

100. 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.

101. PRE-LISTING Home Inspection DOESN’T THE BUYER DO THE HOME INSPECTION?

102. 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..

103. 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% .

104. 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 kitchen when I move…

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

108. Making Your Purchase as Smooth 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.

117. Good Luck with your Move!