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April Market Seminar
1. Making Sense of the Real Estate Market of 2009 Weichert, Princeton’s Market Seminar A complimentary service of Weichert, Realtors Each WEICHERT® franchised office is independently owned and operated. ®
15. Housing Indicators Source: Federal Reserve Current Figures Period Covered Next Release Existing-Home Sales Sales down 3 percent in March. March May 27 Pending Home Sales Index PHSI rose 3.17 percent to 84.60 March June 2 New-Home Sales Down .6 percent from last month (PDF: 36KB) March May 27 Housing Starts SAAR* of 510,000 units (PDF: 29KB) March May 22 Housing Affordability 158.8 — up 15.6 from previous month (PDF: 16KB) December Feb 27
16. Housing Indicators Source: Federal Reserve Mortgage Purchase Application Index Up .5 % to 265.70 from last week. (PDF: 37KB) Week of May 13 May 20 Fixed-Rate Mortgage Rate Up .2 percent to 4.86 (PDF: 39KB) Week of May 13 May 21 GDP Down 6.3% from last Quarter (PDF: 38 KB) Q1 2009 June 26 Consumer Confidence Down 32.35% from a month ago (PDF: 40KB) March April 27 Employment Situation Down 539,000 jobs (PDF: 40KB) April June
17. Housing Indicators Source: Federal Reserve Consumer Price Index Up .1% from the previous month (PDF: 27KB) April June Producer Price Index Up .3% from the previous month (PDF: 30KB) April June Retail Sales Down .4% from the previous month (PDF: 39KB) April June
18. Source: NAR Home Sales Starting to Recover in Some Areas as Affordability Improves
23. 2009: Foreclosure Forecast Within Company-Owned Footprint Over 1800 Foreclosure in Mercer County. Less than 78 foreclosures in 08540 (3 townships). Less than 31 foreclosures in West Windsor. Majority of the 1800 are in Trenton. - foreclosurepoint.com
24. 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. 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)
29. 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
32. 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.
33. Market Absorption Scale (Absorption Rate in Months) 5-6 months absorption rate indicates a normal market.
34. Town by Town Analysis 5/11/09 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months Active w/ Contract in 30 Days New Listings 1in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired & W/drawnListings Closed Listings Princeton Boro: All Styles 54 4 13.5 6 13 3 9 16.7% 3 3 4 Pton -Boro Condo/ Thouses 11 0 99 0 2 2 1 9% 2 2 2 Pton-Boro Single Family 43 4 10.75 6 11 1 8 18.6% 1 1 2 Pton Twp: All Styles 158 10 15.8 19 52 23 23 14.6% 5 4 7 Pton Twp: Condo/ Thouses 30 3 10 5 8 0 4 13.4% 0 1 0 Pton Twp: Single Family 128 7 18.3 14 44 23 19 14.8% 5 3 7
35. Town by Town Analysis 5/11/09 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 144 35 4.1 48 52 (31) 38 26% 5 3 West Windsor Condo/ T.Houses 34 11 3.0 14 18 (7) 7 20% 2 0 West Windsor 55+ 9 0 99 - - - - - - - West Windsor Single Family 101 24 4.2 34 34 (24) 31 31% 3 3 Lawrence: All Styles 200 22 9.0 34 67 11 42 21% 6 9 Lawrence: Condo/ THouses 85 11 7.7 18 30 1 9 11% 3 4 Lawrence: 55+ 15 0 99 - - - - - - - Lawrence: Single Family 100 11 9.0 16 37 10 33 33% 3 5
36. Town by Town Analysis 5/11/08 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 215 19 23.8 34 47 (6) 56 26% 19 6 Ewing : Condo/ T.Houses 48 2 24 5 8 1 9 18% 3 3 Ewing: 55+ 2 1 2 - - - - - - - Ewing: Single Family 165 16 10.3 29 39 (6) 47 28% 16 3 East Windsor: All Styles 197 21 9.3 35 37 (19) 42 21% 12 13 East Windsor: Condo/ THouses 91 13 7 22 17 (18) 17 19% 9 7 East Windsor: 55+ 22 1 22 - - - - - - - East Windsor: Single Family 84 8 10.5 13 20 (1) 25 29% 3 6
37. Town by Town Analysis 5/11/09 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 172 10 17.2 14 38 14 55 32% 7 4 Hopewell Twp. : Condo/ T.Houses 21 5 4.2 0 6 1 9 43% 2 0 Hopewell Twp.: 55+ 3 0 99 - - - - - - - Hopewell : Single Family 148 5 29.6 14 32 13 46 31% 5 4 Hamilton: All Styles 583 47 12 41 160 72 143 25% 41 21 Hamilton: Condo/ THouses 88 6 15 6 35 23 38 43% 11 5 Hamilton 55+ 37 0 99 - - - - - - - Hamilton: Single Family 458 41 11 35 125 49 105 23% 30 16
38. Town by Town Analysis 5/5/09 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 116 11 10.5 12 27 4 22 19% 9 6 Rbnville. : Condo/ T.Houses 49 4 12.2 6 13 3 10 20% 6 3 Rbnville.: 55+ 0 0 0 0 0 0 0 0 0 0 Rbinville.: Single Family 67 7 9.6 6 14 1 12 18% 3 3 HightstownBoro: All Styles 53 0 99 1 9 8 10 19% 3 1 Pennington Boro: All Styles 25 0 99 3 7 4 3 12% 1 0 Hopewell Boro: 16 0 99 1 2 1 2 13% 1 0
39. Market Activity: Town by Town Analysis 5/11/09 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 72 16 4.5 11 32 5 14 19% 6 0 Plainsboro Condo/ THouses 45 8 5.6 8 21 5 10 22% 4 0 Plainsboro 55+ 9 0 99 0 2 2 1 11% 0 0 Plainsboro Single Family 18 8 2.2 3 9 (2) 3 16% 2 0 Cranbury: All Styles 25 4 6.2 1 4 (1) 4 16% 1 0 Cranbury: 55+ 6 0 99 0 0 0 0 0 0 0 Cranbury: Single Family 19 4 4.7 1 4 (1) 4 21% 1 0
40. Market Activity: Town by Town Analysis 5/11/09 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 230 21 13 13 56 36 44 19% 16 2 South BrunswickCondo/ T.Houses 69 5 14 7 22 8 11 16% 5 0 South Brunswick 55+ 31 0 99 0 4 4 3 12% 4 1 South Brunswick Single Family 136 12 11 6 31 13 30 22% 10 1 Monroe: All Styles 481 22 240 10 90 58 100 21% 36 7 Monroe: 55+ 320 16 20 5 58 37 71 22% 20 5 Monroe: Single Family 160 6 26 5 232 21 29 17% 16 2
41. Market Activity: Town by Town Analysis 5/11/09 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 & W/drawn Listings Closed Listings Montgom. 156 22 7.1 56 34 42 26.9% 5 5 16 Hillboro 253 37 6.8 58 21 51 20.2% 12 8 35 Rocky Hill 4 0 99 0 0 1 25% 1 0 1 Franklin 389 43 9 114 71 61 15.7% 18 15 30
50. Understand the Market That You are Buying into… I want to live in West Windsor because of the schools and the trains
51. Town by Town Analysis 5/11/09 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 144 35 4.1 48 52 (31) 38 26% 5 3 West Windsor Condo/ T.Houses 34 11 3.0 14 18 (7) 7 20% 2 0 West Windsor 55+ 9 0 99 - - - - - - - West Windsor Single Family 101 24 4.2 34 34 (24) 31 31% 3 3
52. Market Absorption Rate 26 current active listings 10 reported ‘pending’ sales in last 30 days = 2.6 months absorption rate West Windsor, NJ Townhouse Market: All 5-6 Months Market Absorption Rate indicates a normal market.
53. Market Absorption Rate 109 current active listings 26 reported ‘pending’ sales in last 30 days = 4.19 months absorption rate West Windsor, NJ All Single Family 5-6 Months Market Absorption Rate indicates a normal market.
54. Market Absorption Rate 38 current active listings 9 reported ‘pending’ sales in last 30 days = 4.2 months absorption rate West Windsor, NJ All Single Family $600-$800k 5-6 Months Market Absorption Rate indicates a normal market.
55. Market Absorption Rate 7 current active listings 0 reported ‘pending’ sales in last 30 days = 99 months absorption rate West Windsor, NJ All Single Family $1 million + 5-6 Months Market Absorption Rate indicates a normal market.
56. Market Absorption Rate 9 current active listings 0 reported ‘pending’ sales in last 30 days = 99 months absorption rate West Windsor, NJ ‘ 55+’ only 5-6 Months Market Absorption Rate indicates a normal market.
57. 2. ‘I am going to time the Market and buy at the peak inventory level and when no one else buys…’ Source: MLS
71. Jeff Smith, Gold Services Manager/ Loan Officer Financial Benefits and Process of Home-Ownership.
72. ‘ I don’t want to buy a house and then watch it drop in value!’
73. 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.
74. Purchase Price $329,000 Loan Amount $281,000 Down Payment $11,515 Monthly P&I $1,590 Appreciation/Depreciation Home Value 1st Year -3% $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
75. Incentive From the Government First-time homebuyers can receive a tax credit up to $8000!
76. Tax Credit Overview Distribute NAR Tax Credit Overview handout Amount Ten percent of the cost of home, not to exceed $8,000 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
82. Market Absorption Rate Comparable Properties 7 current active listings 2 reported ‘pending’ sales in last 30 days = 3.5 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ Townhouses Only
83. Market Absorption Rate Comparable Properties 62 current active listings 6 reported ‘pending’ sales in last 30 days = 10.3 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ Single Family $500-799
84. Market Absorption Rate Comparable Properties 42 current active listings 3 reported ‘pending’ sales in last 30 days = 14 month absorption rate 5-6 Months Market Absorption Rate indicates a normal market. Montgomery, NJ Single Family $800+
85. 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
89. 2 . The Effect of Staging on the Value of a Your Home .
90. 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 .
96. 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.
97. 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.
98. The average marketing time of an ASP Staged vs. non-Staged home is 80% less . Why Promote Home Staging ?
99. 3. The Effect of ‘ Pre-Inspection’ on the Sale of Your Home.
101. 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.
103. 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..
104. 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% .
105. 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 investment when I move.
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108. Reality of today’s market is that you will see the return on your investment not in an inflated sales price but in retaining the highest percentage of your list price and staying on the market the fewest # of days. Please consult with your Realtor & staging professional as to which improvements you should finish to make your home the most salable.
109. Weichert Family of Companies What will a real estate company do for me?
110. 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.