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April Market Seminar

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  • 1. Agenda 1. The Market 2. Strategies for Buying 3. Strategies for Selling
  • 2. Chrysler in Bankruptcy…GM Next…Over 1000 Chrysler Dealers to be shuttered… Source: Autodata
  • 3. Consumer Sentiment Not This Low Since Early 1980s 1966Q1 = 100 Source: University of Michigan
  • 4. Employment Year over Year Percent Change
  • 5. Good news, we only lost slightly under a million jobs in April and May 2009…!
  • 6.                                           Thursday, January 1, 2009 
  • 7. Less New Construction in Mercer Source: NAR, November 2008 Forecast Richardson Commercial
  • 8. But what about the impact of foreclosures on the market…?
  • 9. 2009: Foreclosure Forecast Within Company-Owned Footprint Region 12/22/2008 12/29/2008 1/5/2009 1/12/09 1/19/09 NY, Ashby 12,001 15,003 14,736 14,778 13,837 NJ, Bixon 6,844 6,682 6,605 6,638 6,546 PA, CT, McDonald 7,064 7,194 7,121 6,216 7,333 DE 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 DC, Huffman/Chappel MD, l (MD/DC) 16,953 16,376 16,522 18,112 18,232 VA Green (VA) 23,722 23,554 23,570 23,561 23,403 Totals 105,205 107,287 107,773 108,624 109,410
  • 10. 2009: Foreclosure Forecast Within Company-Owned Footprint Over 1800 Foreclosure in Mercer County. Less than 72 foreclosures in 08540 (3 townships). Less than 27 foreclosures in West Windsor. Majority of the 1800 are in Trenton. - foreclosurepoint.com
  • 11. 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)
  • 12. 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)
  • 13. “Everything I am seeing tells me we have arrived at the bottom of the market, specifically in the popular and affordable price ranges.” J. Weichert 6/2009
  • 14. Recovery Has Begun 49.8% Increase in Sales $300,000 & Under May YTD reported internal revenue units
  • 15. Sales by Price Range
  • 16. Positive Indicators Across the Board….1st time in 4 years….! Source: NAR
  • 17. Where is the bottom of the market?
  • 18. Top Five Rules for Understanding the Real Estate Market: 1. Real Estate is Local 2. Real Estate is Local 3. Real Estate is Local 4. Real Estate is Local 5. Real Estate is Local
  • 19. 1. Understand the Local Market That You are Buying into…
  • 20. Market Absorption Scale (Absorption Rate in Months) 5-6 months absorption rate indicates a normal market.
  • 21. Town by Town Analysis: 6/16/09 Towns Active Pending Absorption New Net Gain Listings % of Expired W/drawn Closed Listings in Last Rate in Listings in (Loss) to Reduced Invent. Listings Listings Listings 30 Days Months 30 Days Market in 30 Reduced Days Princeton Boro: All Styles 52 5 10.4 7 2 10 19.2% 5 4 8 Pton -Boro Condo/ Thouses 12 0 99 2 2 3 25% 0 1 2 Pton-Boro Single Family 40 5 8 5 0 7 17.5% 4 3 6 Pton Twp: All Styles 151 31 4.9 32 1 33 21.9% 6 8 11 Pton Twp: Condo/ Thouses 22 8 2.8 3 -5 5 22.7% 0 1 2 Pton Twp: Single Family 129 23 5.6 29 6 28 21.7% 6 7 9
  • 22. Town by Town Analysis 6/16/09 Towns Active Pending Absorption New Net Listings % of Expired W/drawn Closed Listings in Last Rate in Listings in Gain Reduced Invent. Listings Listings Listings 30 Days Months 30 Days (Loss) to in 30 Days Reduced Market West Windsor: 130 43 3.O 33 (10) 41 31% 7 5 28 All Styles West Windsor 23 16 1.4 4 (12) 9 39% 0 2 10 Condo/ T.Houses West Windsor 6 0 99 - - - - - - - 55+ West Windsor 101 27 3.7 2.9 2 32 32% 7 3 18 Single Family Lawrence: All Styles 197 35 5.6 37 2 57 29% 15 8 20 Lawrence: Condo/ 85 15 5.6 20 5 20 23 5 3 13 THouses Lawrence: 55+ 11 0 99 - - - - - - - Lawrence: Single 101 20 5.0 17 7 37 37% 10 5 7
  • 23. East Windsor Condo/Townhouse Absorption Rate 50 45 40 35 30 East Windsor C/T 25 Abs. Rate 20 15 10 5 0
  • 24. 0 20 40 60 80 100 120 8 0 9 / 2 1 9 0 2 5 / 1 9 0 2 / 1 0 2 9 / 1 9 0 6 2 / 1 9 0 / 2 0 9 / 2 9 0 6 1 / 2 9 0 3 / 2 9 0 2 / 3 0 2 9 / 3 9 0 2 6 1 / 3 9 0 2 / 3 9 2 0 / 3 9 0 2 6 / 4 9 0 2 3 1 / 4 9 0 2 / 4 9 0 7 2 / 4 9 0 2 4 / 5 9 0 2 1 / 5 9 0 2 8 1 / 5 9 0 2 / 5 9 0 2 1 / 6 Rate Hopewell Twp. Condo/Townhouse Absorption Rate Hopwell C/T Abs.
  • 25. 10 20 30 40 50 60 70 80 90 100 0 8 0 9 / 2 1 9 0 2 5 / 1 9 0 2 / 1 0 2 9 / 1 9 0 6 2 / 1 9 0 / 2 0 9 / 2 9 0 6 1 / 2 9 0 3 / 2 9 0 2 / 3 0 2 9 / 3 9 0 2 6 1 / 3 9 0 2 / 3 9 2 0 / 3 9 0 2 6 / 4 9 0 2 3 1 / 4 9 0 2 / 4 9 0 7 2 / 4 9 0 2 4 / 5 9 0 2 1 / 5 9 0 2 8 1 / 5 9 0 2 / 5 9 0 2 1 / 6 Hopewell Twp. Single Family Absorption Rate Hopwell Single Family Abs. Rate
  • 26. 10 12 14 16 18 0 2 4 6 8 8 0 9 / 2 1 9 0 2 5 / 1 9 0 2 / 1 0 2 9 / 1 9 0 6 2 / 1 9 0 / 2 0 9 / 2 9 0 6 1 / 2 9 0 3 / 2 9 0 2 / 3 0 2 9 / 3 9 0 2 6 1 / 3 9 0 2 / 3 9 2 0 / 3 9 0 2 6 / 4 9 0 2 3 1 / 4 9 0 2 / 4 9 0 7 2 / 4 9 0 2 4 / 5 9 0 2 1 / 5 9 0 2 8 1 / 5 9 0 2 / 5 9 0 2 1 / 6 Rate Lawrence Condo/Townhouse Absorption Rate Lawrence C/T Abs.
  • 27. 10 15 20 25 30 0 5 8 0 9 / 2 1 9 0 2 5 / 1 9 0 2 / 1 0 2 9 / 1 9 0 6 2 / 1 9 0 / 2 0 9 / 2 9 0 6 1 / 2 9 0 3 / 2 9 0 2 / 3 0 2 9 / 3 9 0 2 6 1 / 3 9 0 2 / 3 9 2 0 / 3 9 0 2 6 / 4 9 0 2 3 1 / 4 9 0 2 / 4 9 0 7 2 / 4 9 0 2 4 / 5 9 0 2 1 / 5 9 0 2 8 1 / 5 9 0 2 / 5 9 0 2 1 / 6 Lawrence Single Family Absorption Rate Lawrence Single Family Abs. Rate
  • 28. 0 20 40 60 80 100 120 8 0 9 / 2 1 9 0 2 5 / 1 9 0 2 / 1 0 2 9 / 1 9 0 6 2 / 1 9 0 / 2 0 9 / 2 9 0 6 1 / 2 9 0 3 / 2 9 0 2 / 3 0 2 9 / 3 9 0 2 6 1 / 3 9 0 2 / 3 9 2 0 / 3 9 0 2 6 / 4 9 0 2 3 1 / 4 9 0 2 / 4 9 0 7 2 / 4 9 0 2 4 / 5 9 0 2 1 / 5 9 0 2 8 1 / 5 9 0 2 / 5 9 0 2 1 / 6 Princeton Princeton Twp. Condo/Townhouses Absorption Rate Township C/T Absorption Rate
  • 29. West Windsor Condo/Townhouses Absorption Rate 30 25 20 15 West Windsor C/T Abs. Rate 10 5 0
  • 30. West Windsor Single Family Absorption Rate 80 70 60 50 West Windsor 40 Single Family Abs. Rate 30 20 10 0
  • 31. Understand the Market That You are Buying into… I want to live in West Windsor because of the schools and the trains
  • 32. Town by Town Analysis 5/11/09 Towns Active Pending Absorption Active w/ New Listings Net Gain Listings % of Expired W/drawn Listings in Last Rate in Contract in 30 Days (Loss) to Reduced in Invent. Listings Listings 30 Days Months in 30 Days Market 30 Days Reduced West Windsor: 144 35 4.1 48 52 (31) 38 26% 5 3 All Styles West Windsor 34 11 3.0 14 18 (7) 7 20% 2 0 Condo/ T.Houses West Windsor 9 0 99 - - - - - - - 55+ West Windsor 101 24 4.2 34 34 (24) 31 31% 3 3 Single Family
  • 33. Market Absorption Rate West Windsor Single Family Only Under $700,000 66 current active listings 3month =absorption 22 reported ‘pending’ sales in last 30 days rate Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same 5-6 Months Absorption Rate indicates a Normal Market
  • 34. Market Absorption Rate West Windsor Single Family Only Over $700,000 36 current active listings 3.6month =absorption 10 reported ‘pending’ sales in last 30 daysrate Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same 5-6 Months Absorption Rate indicates a Normal Market
  • 35. Market Absorption Rate West Windsor All Townhouses 13 current active listings 1.08 month =absorption 12 reported ‘pending’ sales in last 30 daysrate Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same 5-6 Months Absorption Rate indicates a Normal Market
  • 36. Market Absorption Rate West Windsor Single Family Homes $999k + 8 current active listings 99 month =absorption 0 reported ‘pending’ sales in last 30 days rate Market Absorption Rate is the number of months it will take to sell the current inventory of homes if nothing new comes on the market and the rate of sales stays the same 5-6 Months Absorption Rate indicates a Normal Market
  • 37. 2. ‘I am going to time the Market and buy at the peak inventory level and when no one else buys…’ Source: MLS
  • 38. 3. ‘I am going to wait until the price comes down further and then make an offer…’ Source: MLS
  • 39. Relationship of Price Reductions to ‘Pending Sales’ 70 60 50 Princeton Pendings 40 30 Princeton Price Reductions 20 10 0 Source: trend mls
  • 40. Town by Town Analysis 5/11/09 Towns Active Pending Absorption Active w/ New Listings Net Gain Listings % of Expired W/drawn Listings in Last Rate in Contract in 30 Days (Loss) to Reduced in Invent. Listings Listings 30 Days Months in 30 Days Market 30 Days Reduced Hopewell Twp.: 172 10 17.2 14 38 14 55 32% 7 4 All Styles Hopewell Twp. : 21 5 4.2 0 6 1 9 43% 2 0 Condo/ T.Houses Hopewell Twp.: 3 0 99 - - - - - - - 55+ Hopewell : Single 148 5 29.6 14 32 13 46 31% 5 4 Family Hamilton: All Styles 583 47 12 41 160 72 143 25% 41 21 Hamilton: Condo/ 88 6 15 6 35 23 38 43% 11 5 THouses Hamilton 55+ 37 0 99 - - - - - - - Hamilton: Single 458 41 11 35 125 49 105 23% 30 16 Family
  • 41. Relationship of Price Reductions to ‘Pending Sales’ 70 60 50 Princeton Pendings 40 30 Princeton Price Reductions 20 10 0 Source: trend mls
  • 42. Relationship of Price Reductions to ‘Pending Sales’ 120 100 80 West Windsor Pendings 60 West Windsor Reductions 40 20 0 Source: trend mls
  • 43. Relationship of Price Reductions to ‘Pending Sales’ 100 90 80 70 60 Lawrence Pendings 50 40 Lawrence Reductions 30 20 10 0 Source: trend mls
  • 44. Seeing the Opportunity.
  • 45. Seeing the Opportunity. Prices Rates Q. If this were 2005, High where would you place the Price and Rate dots? A. In 2005, the V would Mid-Range look somewhat like this one, where prices were on the high end of the Low scale and rates were in the lower range.
  • 46. Seizing the Opportunity. Prices Rates In recent history, there has never been an High opportunity like this, with low prices and low rates. In real estate, this Mid-Range circular area at the bottom of the V is called the “Buying Zone” – Low it’s an unbelievable time to buy.
  • 47. Financial Benefits and Process of Home-Ownership. Jeff Smith, Gold Services Manager/ Loan Officer
  • 48. ‘I don’t want to buy a house and then watch it drop in value!’
  • 49.   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 Create Equity Total $30,216 v Pay Rent
  • 50. Incentive From the Government First-time homebuyers can receive a tax credit up to $8000!
  • 51. Tax Credit Overview 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 Must not have owned a principal residence in 3 years prior to First-Time purchase Distribute NAR Tax Credit Overview handout
  • 52. Tax Credit FAQs • Can individuals with incomes higher than the  income limits still benefit from the tax credit? • How does a tax credit work? • How do I apply for the credit? • Is there a way to get the credit before I file my tax  return? • How does the repayment work?  Distribute NAR Frequently Asked Question handout
  • 53. How much house can I really afford?
  • 54. Establish Your Buying Power • The first step is to meet with me!
  • 55. Factors to consider when buying and selling… Inventory(supply and demand) Interest Rates Source: MLS
  • 56. Interest Rates Remain Low Average Annual Rate (30-year fixed rate mortgage) Percent 19% 17% 15% 13% 11% 9% 7% 5% 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 Year Source: Freddie Mac
  • 57. Strategies for Selling Joshua D. Wilton, Manager
  • 58. Understand the Market That You are Selling Out of … I live in Montgomery
  • 59. The Impact of Pricing on the Salability of Your Home..…
  • 60. ‘Great speech but does it really work?
  • 61. We know the best way to evaluate pricing Does this really  work?
  • 62. We know the best way to evaluate pricing Does this  really work?
  • 63. 2. The Effect of Staging on the Value of a Your Home .
  • 64. 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.
  • 65. The Way You Live In Your Home…
  • 66. … And The Way We Market And Sell A House Are Two Different Things.
  • 67. “The Investment in Home Staging is Always Less than Your First Price Reduction!”
  • 68. Buyers Only Know What They See …
  • 69. … Not The Way It Is Going To Be.
  • 70. 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.
  • 71. 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.
  • 72. The average marketing time of an ASP Staged vs. non-Staged home is 80% less.
  • 73. 3.The Effect of ‘ Pre- Inspection’ on the Sale of Your Home.
  • 74. What is ‘Pre-Inspection?’
  • 75. 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.
  • 76. PRE-LISTING Home Inspection DOESN’T THE BUYER DO THE HOME INSPECTION?
  • 77. All Negotiations, including real estate, are all about negotiation and control. Right Price Right Staging All Repairs are done in advance. Offer a Home Warranty to the buyer.. Who is in control?
  • 78. 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%.
  • 79. 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.
  • 80. 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.
  • 81. What will a real estate company do for me? Weichert Family of Companies
  • 82. 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.
  • 83. The Weichert Difference • Time is money. • Stress kills. • Time is life.
  • 84. What Will a Weichert Agent Do for Me? Educate You. Negotiate on your behalf. Offer advice on due diligence. Manage all aspects of the transaction process.
  • 85. We’re Here to Help The Entire Process is reviewed by  Legal Council.
  • 86. Resource and website list: Realtor.org Remodeling.com NAR.
  • 87. Resource and Website List http://www.realtor.org/research/resear www.Otteau.com www.Pre-listing-inspection.com
  • 88. Resource and Website List: www.Housemaster.com www.Stagingshoppingcenter.com
  • 89. Resource and website list: www.Stagedhomes.com www.realestatestagingassociation.com www.foreclosurepoint.com www.realtytrac.com
  • 90. Good Luck with your Move!