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Weichert, Princeton Office
             February 2013 Market
           Update/ Forecast Seminar




Offers analysis of the Princeton &
Greater Princeton, NJ real estate
markets & effective strategies to
          buy and sell.
Presented by:
       Joshua D Wilton
      Broker/ Sales Rep.
      Weichert Realtors
        Princeton, NJ
       (o) 609-921-1900
    weichert-princeton.com
facebook.com/weichertprinceton
2012 NAR Home Buyer & Seller Profile
Agenda

1. The Market
- A History
- Forecast for 2012
2. Strategies for Buying
3. Strategies for Selling
Agenda


1. The Real Estate Market
2. (a brief history)
Agenda


Then…
The boom….




Otteau.com
Otteau.com
Unsold I nventory from t he MLS in Weichert Market Areas
                                                              November 2004 thru November 2010            * added Waters & Williams Region to Totals

                                                                      11/ 13/ 06                    11/ 12/ 07                11/ 17/ 08
               11/ 15/ 04              11/ 14/ 05                                                                                               11/ 16/ 09   11/ 15/ 10
                                                                       84,621                        88,414                    84,942
                31,676                  41,156                                                                                                   77,985       92,096
25,000




20,000

         Variance % 2010 to 2009
         NY (Ashby) +13.11%
         CT (Doepper) +118.53%
         Passaic/Hudson/Bergen NJ (Bixon) +5.86%
         Western Central NJ/Lehigh Valley PA (McDonald) +6.78%
15,000
         Northern and Central NJ (Prevete) +9.24%
         Eastern Central/Shore Points NJ (Waters) +10.63%
         Southern NJ (Williams) +10.87%



10,000




 5,000




    0
          1/20/2004
          2/20/2004
          3/20/2004
          4/20/2004
          5/20/2004
          6/20/2004
          7/20/2004

          9/20/2004




          1/20/2005
          2/20/2005
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          6/20/2005
          7/20/2005
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          9/20/2005




          1/20/2006
          2/20/2006
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          7/20/2006
          8/20/2006
          9/20/2006




          1/20/2007
          2/20/2007
          3/20/2007
          4/20/2007

          6/20/2007
          7/20/2007

          9/20/2007




          1/20/2008
          2/20/2008
          3/20/2008
          4/20/2008
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          6/20/2008
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          8/20/2008
          9/20/2008




          2/20/2009
          3/20/2009
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          6/20/2009
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          8/20/2009
          9/20/2009




          1/20/2010
          2/20/2010
          3/20/2010
          8/20/2004




          5/20/2007



          8/20/2007




          1/20/2009




          4/20/2010
         10/20/2003
         11/20/2003
         12/20/2003




         10/20/2004

         12/20/2004




         10/20/2005
         11/20/2005
         12/20/2005




         10/20/2006
         11/20/2006
         12/20/2006




         10/20/2007
         11/20/2007
         12/20/2007




         11/20/2008
         12/20/2008




         11/20/2009
         12/20/2009
         11/20/2004




         10/20/2008




         10/20/2009
                               ASHBY TOTAL     DOEPPER TOTAL     BIXON TOTAL       MCDONALD TOTAL      PREVETE TOTAL    WATERS TOTAL       WILLIAMS TOTAL


   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.
The NJ version of the bust...




   Otteau.com
The Market


Last Year…
2012: State of the Market


 Affordability
     will
Spur Recovery
Affordability Index

Definition: A measure of the financial ability of US
Families to buy a house. 100 means that families
earning the national median income have just the
amount of money needed to qualify for a mortgage
on a median priced home.

Higher than100 means they have more than enough.
Lower than 100 means they have less than enough.

Source: NAR Housing Affordability Index 1971 to 2010
194.5
    Nov 2011
Affordability Index
2012: State of the Market
Historically Low Interest Rates
30 Year Fixed
 interest rate
    3.94%
  Lowest in recorded history
How Long Will Interest Rates
      Remain Low?




   5-6 months absorption rate indicates a normal market.
What will the future bring…?
What will the future bring…?
What will the future bring…?




http://money.cnn.com/2011/03/15/real_estate/rent
_rise_housing/index.htm
2012 Better Year…
   2013…
Fiscal Cliff Legislation ~ Good For Real Estate

• Mortgage Cancellation Relief is extended for one
  year to January 1, 2014.
• Deduction for Mortgage Insurance Premiums for
  filers making below $110,000 is extended through
  2013 and made retroactive to cover 2012.
• The 10% tax credit (up to $500) for homeowners for
  energy improvements to existing homes is extended
  through 2013 and made retroactive to cover 2012
Fiscal Cliff Legislation ~ Good For Real Estate



• The tax exclusion for gains on the sale of a principle
  residence remains in effect for sellers whose income
  is above $450,000 (for those filing a joint return).
• Continuation of Mortgage Interest deduction on
  Federal Income Taxes.
2013 Economic Indicators

GDP Growth: 2% growth in 2013, about the same as last year
Interest Rates: Little or no increase in short-term rates in
   2013
Inflation: Rising slightly this year, to about 2.3%
Business Spending: About a 4% gain in 2013
Unemployment: Falling gradually over 2013 to around 7.5%
Housing: Up 8% in 2012; helping GDP in 2013
Energy: Crude oil holding steady at $90-$95/barrel through
   early spring
Consumer Confidence: Rising this winter.
NAR 2013 Projections

• Affordability Index a record high in November
  2012 at 194 projecting 160 for 2013.
• Total Sales projecting 5.08 Million or 8.5%
  increase in 2013.
• New Home Sales projecting 533,000 in 2013 a
  46% increase.
• Average Home Sales Price $185,800 or 4.2%
  increase in 2013.


*Source: NAR News Release 12/20/12
Pending Home Sales
105


        100 = Historically Healthy Level
100




95
                                                 November 2011 – November 2012

90




85




80
        November 2010 – November 2011
  Nov      Dec      Jan     Feb      Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov

      NAR 12/2012
Month’s Inventory of Homes for Sale
10.0


 9.0


 8.0


 7.0


 6.0      5-6 Months = Normal Market Inventory



 5.0


 4.0
       Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov



       NAR 12/2012
Absorption Rates by Region




Local MLS
S&P Case-Shiller Home Prices
5.0%
         Year-over-Year Change in Prices                                        4.3%
4.0%                                                                     3.6%

3.0%

                                                                  2.0%
2.0%
                                                           1.1%
1.0%                                                0.6%
        Jan      Feb        Mar     Apr     May
0.0%
                                                    Jun    Jul    Aug    Sep    Oct
-1.0%                                       -0.5%

-2.0%                               -1.7%

-3.0%                       -2.5%

-4.0%           -3.5%
        -3.9%
-5.0%


 S&P Case Shiller 12/2012
Projected % Change in Home Prices
         Source            2013

 JP Morgan                9.7%
 Barclays                 5.5%
 Capital Economics         5%
 Freddie Mac              2-3%
Average Annual Appreciation
12.0%

10.0%
                                           10.4%
8.0%

6.0%

4.0%
                 3.6%                                                                               3.3%
2.0%

0.0%

-2.0%

-4.0%
                                                                        -5.7%
-6.0%
          Pre-Bubble (1987-1999)   Bubble (Q1 2000 - Q2 2006)   Bust (Q3 2006 - Q2 2012)   Expectations (2013 - 2017)




 Home Price Expectation Survey 12/2012
Mercer County

   ‘Supply & Demand’

Source: NAR, November 2008 Forecast
NJ Housing Permits

  In thousand units




Source: Census
Mercer County Housing Permits 2000- 2009




 Source: Census
Mercer County Housing Permits 2012

                                 Single-      Single-    Two-      Two-    3-or-4-   3-or-4-   5-or-More   5-or-More
                         Total   Family       Family    Family   Family    Family    Family      Family       Family
Mercer                   Units    Units        Value     Units    Value     Units     Value        Units       Value


East Windsor township      27        27     5,264,144       0         0         0         0           0            0
Ewing township             85         3     2,378,118       4      4,000        3    55,000          75     6,603,330
Hamilton township          31        22     3,285,541       2    150,000        0         0           7      114,762
Hightstown borough          3         3      411,900        0         0         0         0           0            0
Hopewell borough            0         0            0        0         0         0         0           0            0

Hopewell township          68         8     3,115,896       0         0         0         0          60     5,779,000
Lawrence township           2         2      383,650        0         0         0         0           0            0
Pennington borough          0         0            0        0         0         0         0           0            0
Princeton borough           8         6     2,998,400       2    474,527        0         0           0            0
Princeton township         14        14     6,938,120       0         0         0         0           0            0
Robbinsville township*     85         0       10,021        4    329,000        0         0           5        9,156

Trenton                     9        21     5,188,122       0         0         0         0          64     5,411,451
West Windsor township     115         6     1,262,785       0         0         0         0         109     7,729,428


Mercer County Total       447       112    31,236,697      12    957,527        3    55,000         320    25,647,127



                 Source: Census
Long Term Supply …




Source: NAR, November 2008 Forecast
Richardson Commercial
Long Term Demand …




Source: NAR, November 2008 Forecast

 http://lwd.dol.state.nj.us/labor/lpa/pub/factbook/merfct.pdf
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
Trendmls.com
1. You Understand the Local Market
That You are Buying into or Selling
             out of…

              -Inventory
              - Location
           - Sales Patterns
     - Neighborhood, Location
 - Style of Home, Beds, Baths, etc
Market Absorption Scale
  (Absorption Rate in Months)




    5-6 months absorption rate indicates a normal market.
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 Rate

                        Anytown., NJ



      107 current active listings                    24.3
                                                   = months
                                                     absorption
    4 reported sales in last 30 days
                                                     rate




 5-6 Months Market Absorption Rate indicates a normal market.
44

Market Scale for Supply & Demand
 High Supply/Low Demand                             Low Supply/High Demand
                                           Normal



                                       1
Market Absorption in Months




                                                                   Weichert has been
                                       2                           studying market
                                                                   conditions for more than
                                       3                           3 decades and has found a
                                                                   direct correlation between
                                       4
                                                                   market absorption and
                                       5                           property values.
                              Normal




                                       6                           As absorption rates
                                       7                           increase beyond a normal
                                                                   market level of 5-6
                                       8                           months, property values
                                                                   depreciate annually.
                                       9
                                                                   Note: This Market Scale is valid
                                  10                               only for absorption rates
                                                                   between 1 and 12 months.
                                  11
                                  12
1/28/13
Towns        Active     Pending   Absorption   New Listings   Net Gain    Listings     % of      Expired    W/drawn    Closed
             Listings   in Last   Rate in      in 30 Days     (Loss) to   Reduced in   Invent.   Listings   Listings   Listings
                        30 Days   Months                      Market      30 Days      Reduced

West
Windsor:     64         4         16.0         19             15          6            9.4%      4          1          12
All Styles

West
Windsor      12         2         6.0          6              4           1            8.3%      1          1          5
Condo/
T.Houses

West
Windsor      8          0         99           1              1           _            _         0          0          0
55+

West
Windsor      44         2         22.0         12             10          5            11.4%     3          0          7
Single
Family




Lawrence:
All Styles   121        13        9.3          23             10          13           10.7%     11         2          18
Lawrence:
Condo/       37         6         6.2          5              (1)         7            18.9%     3          1          0
THouses

Lawrence:
55+          8          3         2.7          1              (2)         _            _         1          0          0
Lawrence:
Single       76         4         19.0         17             13          6            7.9%      7          2          18
Family
1/28/13
Towns        Active     Pending   Absorption   New           Net      Listings   % of      Expire    W/drawn    Closed
             Listings   in Last   Rate in      Listings in   Gain     Reduced    Invent.   d         Listings   Listings
                        30 Days   Months       30 Days       (Loss)   in 30      Reduced   Listing
                                                             to       Days                 s
                                                             Market


Plainsboro
All Styles
             61         10        6.1          14            4        10         16%       11        0          8
Plainsboro
Condo/
             30         5         6            9             4        7          23%       7         0          4
THouses

Plainsboro
55+
             17         3         5.66         2             (1)      2          12%       1         0          1
Plainsboro
Single
             14         2         7            3             1        1          7%        3         0          3
Family




Cranbury:
All Styles
             12         1         12           5             4        2          16%       3         0          3
1/28/13
Towns        Active     Pending   Absorption   New           Net Gain    Listings     % of      Expired    W/drawn    Closed
             Listings   in Last   Rate in      Listings in   (Loss) to   Reduced in   Invent.   Listings   Listings   Listings
                        30 Days   Months       30 Days       Market      30 Days      Reduced


Ewing:
All Styles
              198         17         11            33          16           33          17%       16          5         16
Ewing :
Condo/
               29         3          10             6           3            6          21%        1          3          0
T.Houses

Ewing
55+:
                8         1           8             2           1           ---          ---       0          0          0
Ewing:
Single
              161         13         12            25          12           27          17%       15          2         16
Family



East
Windsor:
              139         12         12            26          14           18          13%       11          2         11
All Styles

East
Windsor:
               85         7          12            16           9           13          15%        7          1          8
Condo/
Thouses

East
Windsor:
                8         0         999             1           1           ---          ---       0          0          1
55+

East
Windsor:
               46         5           9             9           4            5          11%        4          1          2
Single
Family
1/28/13
Towns            Active     Pending   Absorption   New           Net Gain    Listings     % of      Expired    W/drawn    Closed
                 Listings   in Last   Rate in      Listings in   (Loss) to   Reduced in   Invent.   Listings   Listings   Listings
                            30 Days   Months       30 Days       Market      30 Days      Reduced

Hopewell
Twp.             101        6         16.8         16            10          12           11.9%     11         8          7
All Styles

Hopewell
Twp. Condo/      2          0         99           1             1           1            50%       2          2          2
T.Houses

Hopewell
Twp.:            1          0         99           0             0           --           --        0          0          1
55+

Hopewell Twp
Single Family    98         6         16.3         15            9           11           11.2%     9          6          4



Hamilton: All
Styles           390        26        15           70            44          67           18.6%     25         9          32
Hamilton:
Condo/ THouses   79         6         13.2         12            6           16           20.3%     5          2          4
Hamilton:
55+              21         1         21           7             6           --           --        1          1          2
Hamilton:
Single Family    290        19        15.3         51            32          51           17.6%     19         6          26
1/28/13
Towns           Active     Pending   Absorption   New        Net Gain    Listings   % of      Expired    W/drawn    Closed
                Listings   in Last   Rate in      Listings   (Loss) to   Reduced    Invent.   Listings   Listings   Listings
                           30 Days   Months       in 30      Market      in 30      Reduced
                                                  Days                   Days




                71         11        6            17         6           13         18%       11         4          13
Robbinsville
All Styles




                35         6         6            7          1           6          17%       6          1          8
Robbinsville
Condo/
T.Houses



                36         5         7            10         5           7          19%       5          3          5
Single Family




                51         6         9            8          2           15         29%       5          0          6
Hightstown
Boro: All
Styles



                14         3         5            3          0           2          14%       1          0          2
Pennington




                6          3         2            1          (2)         5          83%       0          2          1
Hopewell Boro
1/28/13
Towns            Active     Pending   Absorption   New           Net Gain    Listings   % of Invent.   Expired    W/drawn    Closed
                 Listings   in Last   Rate in      Listings in   (Loss) to   Reduced    Reduced        Listings   Listings   Listings
                            30 Days   Months       30 Days       Market      in 30
                                                                             Days




Princeton:
All Styles       111        9         12.3         18            9           14         12.6%          8          7          20

Princeton:
Condo/ Thouses   28         4         7            3             -1          4          14.3%          3          1          4

Princeton:
Single Family    83         5         16.6         15            10          10         12%            5          6          16
1/28/13
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 Days   Reduced



South
Brunswick       149        9         16           28            19          14           9         32         6          36
All Styles

South
BrunswickCon
do/ T.Houses
                53         4         13           12            8           8            15        10         1          9
South
Brunswick       34         0         99           2             2           4            12        1          2          4
55+

South
Brunswick       62         5         12           14            9           2            3         21         3          17
Single Family




Monroe:
All Styles      401        25        16           109           84          17           4         48         8          45
Monroe:
55+             268        15        18           76            61          9            3         27         4          34
Monroe:
Single Family   143        10        14           33            23          8            6         21         4          11
1/28/13
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




Montgomery
All Styles      90         18        5            23            +5          14         15%       14         5          12
Montgomery
Condo/Twnhms    11         3         3.7          6             +3          2          18%       3          2          5
Single Family
                79         15        5.3          17            +2          12         15%       11         3          7


Hillsborough
All Styles      174        24        7.2          49            +25         23         13%       18         10         14
Hillsborough
Condo/Twnhms    70         9         7.8          22            +13         11         16%       9          5          8
Hillsborough
Single Family   104        15        6.9          27            +12         12         11%       9          5          6
53

Market Scale for Supply & Demand
 High Supply/Low Demand                             Low Supply/High Demand
                                           Normal



                                       1
Market Absorption in Months




                                                                   Weichert has been
                                       2                           studying market
                                                                   conditions for more than
                                       3                           3 decades and has found a
                                                                   direct correlation between
                                       4
                                                                   market absorption and
                                       5                           property values.
                              Normal




                                       6                           As absorption rates
                                       7                           increase beyond a normal
                                                                   market level of 5-6
                                       8                           months, property values
                                                                   depreciate annually.
                                       9
                                                                   Note: This Market Scale is valid
                                  10                               only for absorption rates
                                                                   between 1 and 12 months.
                                  11
                                  12
Understand the Market That You are
        Buying/ Selling in…
Sample Market Absorption Rate

                        Anytown., NJ



      107 current active listings                    24.3
                                                   = months
                                                     absorption
    4 reported sales in last 30 days
                                                     rate




 5-6 Months Market Absorption Rate indicates a normal market.
Market Absorption Rate

                   West Windsor
                   BedroomTownhouses
                   3+ Bedroom

    3 current active listings              1.5 months
                                          = absorption
2 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
Market Absorption Rate

                   West Windsor
                   Condos/ Townhouses


    8 current active listings              1.6 months
                                          = absorption
5 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
Market Absorption Rate

                   Princeton
                   Condos/ Townhouses


    24 current active listings             4.8 months
                                          = absorption
5 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
Market Absorption Rate

                   Lawrence
                   Condos/ Townhouses


    46 current active listings             5.75 months
                                          = absorption
8 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
Market Absorption Rate

                   West Windsor
                   Single Family Homes
                   Less than $600K

    29 current active listings             7.24 months
                                          = absorption
4 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
Market Absorption Rate

                   West Windsor
                   Single Family Homes
                   $600K - $800K

    18 current active listings             18 months
                                          = absorption
1 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
Market Absorption Rate

                   West Windsor
                   Single Family Homes
                   $800K +

    4 current active listings              4 months
                                          = absorption
1 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
Market Absorption Rate

                   Princeton Twp & Boro
                   Single Family Homes
                   $600K - $800K

    11 current active listings             11 months
                                          = absorption
1 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
Market Absorption Rate

                   Princeton
                   Single Family Homes
                   $800K - $1M

    13 current active listings             99* months
                                          = 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
Market Absorption Rate

                   Princeton Twp & Boro
                   Single Family Homes
                   $1M - $2.0M

    28 current active listings             14 months
                                          = absorption
2 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
Market Absorption Rate

                   Princeton
                   Single Family Homes
                   $2 million +

    18 current active listings             99* months
                                          = 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
Buying/ Selling Strategies




Source: MLS
‘I don’t want to buy a house and
  then watch it drop in value!’
 
                             Purchase Price       $329,000        Loan Amount     $317400

                         Down Payment              $11,515         Monthly P&I     $1802

       Appreciation/Depreciation                               Home Value
1st Year                                               -3%          $319,130
2nd Year                                                0%          $319,130
3rd Year                                                1%          $322,321
4th Year                                                3%          $331,990
5th Year                                                5%          $348,590
5 Year Appreciation/Depreciation                   $19,500

                                                             Vs Paying Rent @
               Tax Benefit                                       $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 Gain $44,200                    v Pay Rent
 
                             Purchase Price       $329,000        Loan Amount     $317400

                         Down Payment              $11,515         Monthly P&I     $1802

       Appreciation/Depreciation                               Home Value
1st Year                                                 5          $319,130
2nd Year                                                3%          $319,130
3rd Year                                                2%          $322,321
4th Year                                                2%          $331,990
5th Year                                                2%          $348,590
5 Year Appreciation/Depreciation                   $48,590

                                                             Vs Paying Rent @
               Tax Benefit                                       $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 Gain $73,529                    v Pay Rent
+ The Amortization Schedule on
                  a Loan
Yearly Schedule of Balances and Payments
        Beginning                                           Cumulative Cumulativ     Ending
Year                  Payment      Principal   Interest
         Balance                                             Principal e Interest    Balance

2010    $315,646.96   $21,625.92   $4,374.96   $17,250.96    $6,128.00   $24,508.72 $311,272.00
2011    $311,272.00   $21,625.92   $4,621.30   $17,004.62   $10,749.30   $41,513.34 $306,650.70
2012    $306,650.70   $21,625.92   $4,881.98   $16,743.94   $15,631.28   $58,257.28 $301,768.72
2013    $301,768.72   $21,625.92   $5,157.36   $16,468.56   $20,788.64   $74,725.84 $296,611.36
2014    $296,611.36   $21,625.92   $5,448.28   $16,177.64   $26,236.92   $90,903.48 $291,163.08
Appreciation (conservitive): $19,500
                    +
        Amortization: $20,109
                   +
Tax Benefit of Home Ownership $25,000
                    +
       Low Interest Rates: $5000
        ___________________
      total 5 year gain = $69,609
Market Absorption Scale
  (Absorption Rate in Months)




    5-6 months absorption rate indicates a normal market.
1. ‘I am going to time the
      Market and buy/ sell at the
     time when inventory & buyer
        count is in my favor…’

Source: MLS
Listing v Contracts: Dec – Jan 2011, Mercer County
Listing v Contracts: Dec – Jan 2012, Lawrence Twp.
3. ‘I am going to wait until
                the price comes down
              further and then make an
              offer/ if I lower my price I
                 will get lower bids…?
Source: MLS
Don’t Wait
                  Hopewell Twp:               82%
                 Homes currently Under Contract:
                                  17
                  Under contract within 30 days of
Listing at the Right Price or Re-positioning in line with the market :
                                  14


                        Princeton 63%
                 Homes currently Under Contract:
                                  19
                  Under contract within 30 days of
Listing at the Right Price or Re-positioning in line with the market :
                                  12
It’s About Price

Sellers, if your listing hasn’t gone under contract
in the last 30 days and the price is not adjusted
   it will not go under contract in the next 30.


  If the home your buyer wants has not had a
   price adjustment in the last 30 days it is the
perfect time to go face to face with the seller to
                   negotiate!
Financial Benefits and Process of
      Home-Ownership.

       Brian McDaniel,
         Loan Officer
 Weichert Financial Services
Pop Quiz…

If you take out a $200,000 30 year fixed
  payment loan from the bank, what is
        your monthly payment?
              A. $1901.
              B. $1640.
              C. $1201.
              D. $969.
Pop Quiz…

What does an average buyer need for a
          down payment?
            A. 25%
            B. 20%
           C. 10%
           D. 3.5%
            D. 0%
Establish Your Buying Power
The Impact of Pricing on the
 Salability of Your Home..…
Home Staging
All Negotiations, including real estate, are all about negotiation and control.




   Who is in control?
Negotiations are about
       leverage, use the listing
       price as part of yours…


Source: MLS
Effects of Right Pricing…


•Promotes buyer & agent interest
• Generates home-viewings
• Creates a Sense of Urgency
• Sets the stage for multiple purchase offers during the 1st 30
days of marketing
• Purchase offers tend to be higher in relation to asking price
• Puts the seller in firm control of price negotiations
• Likely to result in a higher home selling price in a shorter
marketing time period

      Otteau.com
Effects of Over Pricing…
In the final stages of Over Pricing – after extended days-on-
market and several price reductions – a home begins to
attract interest from buyers who are looking to profit from
sellers under duress. These buyers, often referred to as
bottom-feeders, tend to offer deeply discounted prices for
homes. In the end, the Over Pricing scenario has many
adverse effects, including:
Eliminating all Sense of Urgency
Extending marketing time in a price declining market
Results in asking price reductions over time
Forfeits price control to the buyer
Encourages discounted purchase offers
Attracts bottom-feeders
                                 Otteau.com
Leads to lower selling price
Princeton Twp. 2010




The Price Trend Came up with a price of $850,000. I
        recommended a price of $799,000.
Negotiations are about leverage, use the
        listing price as yours…




     Listed at $799,000. 5 offers, sold at $942,000.
                 The seller had control.
One Aim
                                  Determining your best asking price.
Our unique method goes beyond the traditional assessment of comparable home prices
             by anticipating changing marketing conditions in your area.
2. The Effect of
Staging on the Value
     of a Home.
Home Staging
All Negotiations, including real estate, are all about negotiation and control.




   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.
The Way You Live In Your Home…
… And The Way We Market And Sell A House
        Are Two Different Things.
“The Investment in Home Staging
    is Always Less than Your
      First Price Reduction!”
Buyers Only Know What They See …
… Not The Way It Is Going To Be.
Home Staging
                                         “The investment in home staging is always less than your first price reduction!”




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



                                                                                                      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.
*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.
One Aim
                                  Determining your best asking price.
Our unique method goes beyond the traditional assessment of comparable home prices
             by anticipating changing marketing conditions in your area.
Home Staging
All Negotiations, including real estate, are all about negotiation and control.




   Who is in control?
What is
‘Pre-Inspection?’
Pre-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.
PRE-LISTING Home Inspection




DOESN’T THE BUYER DO THE HOME
         INSPECTION?
Home Staging
All Negotiations, including real estate, are all about negotiation and control.




   Who is in control?
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.
Return on Home Improvements




http://www.remodeling.hw.net/2011/costvsvalue/division/middle-atlantic.aspx
What will a real estate
company do for me?


      Weichert Family of Companies
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.
The Weichert Difference
• Time is money.
• Stress kills.

• Time is life.
What Will a Weichert Agent Do for You?

                       Educate You.
                     Negotiate on your
                           behalf.
                    Offer advice on due
                         diligence.
                   Manage all aspects of
                      the transaction
                          process.
We’re Here to Help

The Entire Process is reviewed
       by Legal Council.
Become a Fan!

www.facbook.com/weichertprinceton
   www.weichert-princeton.com


We post a ton of great market data
      on these two sites.
Resource and website list:

          Realtor.org
http://www.facebook.com/pages/
 NAR-Research/73888294183#
        Remodeling.com
Resource and Website List

http://www.realtor.org/research/res
 earch/housinginx Remodeling.com
         www.Otteau.com
  www.Pre-listing-inspection.com
Resource and Website List:

   www.Housemaster.com
www.Stagingshoppingcenter.com
Resource and website list:

      www.Stagedhomes.com
www.realestatestagingassociation.com
        www.realtytrac.com

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Feb 2013 market seminar

  • 1. Weichert, Princeton Office February 2013 Market Update/ Forecast Seminar Offers analysis of the Princeton & Greater Princeton, NJ real estate markets & effective strategies to buy and sell.
  • 2. Presented by: Joshua D Wilton Broker/ Sales Rep. Weichert Realtors Princeton, NJ (o) 609-921-1900 weichert-princeton.com facebook.com/weichertprinceton
  • 3. 2012 NAR Home Buyer & Seller Profile
  • 4. Agenda 1. The Market - A History - Forecast for 2012 2. Strategies for Buying 3. Strategies for Selling
  • 5. Agenda 1. The Real Estate Market 2. (a brief history)
  • 9. Unsold I nventory from t he MLS in Weichert Market Areas November 2004 thru November 2010 * added Waters & Williams Region to Totals 11/ 13/ 06 11/ 12/ 07 11/ 17/ 08 11/ 15/ 04 11/ 14/ 05 11/ 16/ 09 11/ 15/ 10 84,621 88,414 84,942 31,676 41,156 77,985 92,096 25,000 20,000 Variance % 2010 to 2009 NY (Ashby) +13.11% CT (Doepper) +118.53% Passaic/Hudson/Bergen NJ (Bixon) +5.86% Western Central NJ/Lehigh Valley PA (McDonald) +6.78% 15,000 Northern and Central NJ (Prevete) +9.24% Eastern Central/Shore Points NJ (Waters) +10.63% Southern NJ (Williams) +10.87% 10,000 5,000 0 1/20/2004 2/20/2004 3/20/2004 4/20/2004 5/20/2004 6/20/2004 7/20/2004 9/20/2004 1/20/2005 2/20/2005 3/20/2005 4/20/2005 5/20/2005 6/20/2005 7/20/2005 8/20/2005 9/20/2005 1/20/2006 2/20/2006 3/20/2006 4/20/2006 5/20/2006 6/20/2006 7/20/2006 8/20/2006 9/20/2006 1/20/2007 2/20/2007 3/20/2007 4/20/2007 6/20/2007 7/20/2007 9/20/2007 1/20/2008 2/20/2008 3/20/2008 4/20/2008 5/20/2008 6/20/2008 7/20/2008 8/20/2008 9/20/2008 2/20/2009 3/20/2009 4/20/2009 5/20/2009 6/20/2009 7/20/2009 8/20/2009 9/20/2009 1/20/2010 2/20/2010 3/20/2010 8/20/2004 5/20/2007 8/20/2007 1/20/2009 4/20/2010 10/20/2003 11/20/2003 12/20/2003 10/20/2004 12/20/2004 10/20/2005 11/20/2005 12/20/2005 10/20/2006 11/20/2006 12/20/2006 10/20/2007 11/20/2007 12/20/2007 11/20/2008 12/20/2008 11/20/2009 12/20/2009 11/20/2004 10/20/2008 10/20/2009 ASHBY TOTAL DOEPPER TOTAL BIXON TOTAL MCDONALD TOTAL PREVETE TOTAL WATERS TOTAL WILLIAMS TOTAL 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.
  • 10. The NJ version of the bust... Otteau.com
  • 12. 2012: State of the Market Affordability will Spur Recovery
  • 13. Affordability Index Definition: A measure of the financial ability of US Families to buy a house. 100 means that families earning the national median income have just the amount of money needed to qualify for a mortgage on a median priced home. Higher than100 means they have more than enough. Lower than 100 means they have less than enough. Source: NAR Housing Affordability Index 1971 to 2010
  • 14. 194.5 Nov 2011 Affordability Index
  • 15. 2012: State of the Market Historically Low Interest Rates
  • 16. 30 Year Fixed interest rate 3.94% Lowest in recorded history
  • 17. How Long Will Interest Rates Remain Low? 5-6 months absorption rate indicates a normal market.
  • 18. What will the future bring…?
  • 19. What will the future bring…?
  • 20. What will the future bring…? http://money.cnn.com/2011/03/15/real_estate/rent _rise_housing/index.htm
  • 22. Fiscal Cliff Legislation ~ Good For Real Estate • Mortgage Cancellation Relief is extended for one year to January 1, 2014. • Deduction for Mortgage Insurance Premiums for filers making below $110,000 is extended through 2013 and made retroactive to cover 2012. • The 10% tax credit (up to $500) for homeowners for energy improvements to existing homes is extended through 2013 and made retroactive to cover 2012
  • 23. Fiscal Cliff Legislation ~ Good For Real Estate • The tax exclusion for gains on the sale of a principle residence remains in effect for sellers whose income is above $450,000 (for those filing a joint return). • Continuation of Mortgage Interest deduction on Federal Income Taxes.
  • 24. 2013 Economic Indicators GDP Growth: 2% growth in 2013, about the same as last year Interest Rates: Little or no increase in short-term rates in 2013 Inflation: Rising slightly this year, to about 2.3% Business Spending: About a 4% gain in 2013 Unemployment: Falling gradually over 2013 to around 7.5% Housing: Up 8% in 2012; helping GDP in 2013 Energy: Crude oil holding steady at $90-$95/barrel through early spring Consumer Confidence: Rising this winter.
  • 25. NAR 2013 Projections • Affordability Index a record high in November 2012 at 194 projecting 160 for 2013. • Total Sales projecting 5.08 Million or 8.5% increase in 2013. • New Home Sales projecting 533,000 in 2013 a 46% increase. • Average Home Sales Price $185,800 or 4.2% increase in 2013. *Source: NAR News Release 12/20/12
  • 26. Pending Home Sales 105 100 = Historically Healthy Level 100 95 November 2011 – November 2012 90 85 80 November 2010 – November 2011 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov NAR 12/2012
  • 27. Month’s Inventory of Homes for Sale 10.0 9.0 8.0 7.0 6.0 5-6 Months = Normal Market Inventory 5.0 4.0 Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov NAR 12/2012
  • 28. Absorption Rates by Region Local MLS
  • 29. S&P Case-Shiller Home Prices 5.0% Year-over-Year Change in Prices 4.3% 4.0% 3.6% 3.0% 2.0% 2.0% 1.1% 1.0% 0.6% Jan Feb Mar Apr May 0.0% Jun Jul Aug Sep Oct -1.0% -0.5% -2.0% -1.7% -3.0% -2.5% -4.0% -3.5% -3.9% -5.0% S&P Case Shiller 12/2012
  • 30. Projected % Change in Home Prices Source 2013 JP Morgan 9.7% Barclays 5.5% Capital Economics 5% Freddie Mac 2-3%
  • 31. Average Annual Appreciation 12.0% 10.0% 10.4% 8.0% 6.0% 4.0% 3.6% 3.3% 2.0% 0.0% -2.0% -4.0% -5.7% -6.0% Pre-Bubble (1987-1999) Bubble (Q1 2000 - Q2 2006) Bust (Q3 2006 - Q2 2012) Expectations (2013 - 2017) Home Price Expectation Survey 12/2012
  • 32. Mercer County ‘Supply & Demand’ Source: NAR, November 2008 Forecast
  • 33. NJ Housing Permits In thousand units Source: Census
  • 34. Mercer County Housing Permits 2000- 2009 Source: Census
  • 35. Mercer County Housing Permits 2012 Single- Single- Two- Two- 3-or-4- 3-or-4- 5-or-More 5-or-More Total Family Family Family Family Family Family Family Family Mercer Units Units Value Units Value Units Value Units Value East Windsor township 27 27 5,264,144 0 0 0 0 0 0 Ewing township 85 3 2,378,118 4 4,000 3 55,000 75 6,603,330 Hamilton township 31 22 3,285,541 2 150,000 0 0 7 114,762 Hightstown borough 3 3 411,900 0 0 0 0 0 0 Hopewell borough 0 0 0 0 0 0 0 0 0 Hopewell township 68 8 3,115,896 0 0 0 0 60 5,779,000 Lawrence township 2 2 383,650 0 0 0 0 0 0 Pennington borough 0 0 0 0 0 0 0 0 0 Princeton borough 8 6 2,998,400 2 474,527 0 0 0 0 Princeton township 14 14 6,938,120 0 0 0 0 0 0 Robbinsville township* 85 0 10,021 4 329,000 0 0 5 9,156 Trenton 9 21 5,188,122 0 0 0 0 64 5,411,451 West Windsor township 115 6 1,262,785 0 0 0 0 109 7,729,428 Mercer County Total 447 112 31,236,697 12 957,527 3 55,000 320 25,647,127 Source: Census
  • 36. Long Term Supply … Source: NAR, November 2008 Forecast Richardson Commercial
  • 37. Long Term Demand … Source: NAR, November 2008 Forecast http://lwd.dol.state.nj.us/labor/lpa/pub/factbook/merfct.pdf
  • 38. 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
  • 40. 1. You Understand the Local Market That You are Buying into or Selling out of… -Inventory - Location - Sales Patterns - Neighborhood, Location - Style of Home, Beds, Baths, etc
  • 41. Market Absorption Scale (Absorption Rate in Months) 5-6 months absorption rate indicates a normal market.
  • 42. 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.
  • 43. Sample Market Absorption Rate Anytown., NJ 107 current active listings 24.3 = months absorption 4 reported sales in last 30 days rate 5-6 Months Market Absorption Rate indicates a normal market.
  • 44. 44 Market Scale for Supply & Demand High Supply/Low Demand Low Supply/High Demand Normal 1 Market Absorption in Months Weichert has been 2 studying market conditions for more than 3 3 decades and has found a direct correlation between 4 market absorption and 5 property values. Normal 6 As absorption rates 7 increase beyond a normal market level of 5-6 8 months, property values depreciate annually. 9 Note: This Market Scale is valid 10 only for absorption rates between 1 and 12 months. 11 12
  • 45. 1/28/13 Towns Active Pending Absorption New Listings Net Gain Listings % of Expired W/drawn Closed Listings in Last Rate in in 30 Days (Loss) to Reduced in Invent. Listings Listings Listings 30 Days Months Market 30 Days Reduced West Windsor: 64 4 16.0 19 15 6 9.4% 4 1 12 All Styles West Windsor 12 2 6.0 6 4 1 8.3% 1 1 5 Condo/ T.Houses West Windsor 8 0 99 1 1 _ _ 0 0 0 55+ West Windsor 44 2 22.0 12 10 5 11.4% 3 0 7 Single Family Lawrence: All Styles 121 13 9.3 23 10 13 10.7% 11 2 18 Lawrence: Condo/ 37 6 6.2 5 (1) 7 18.9% 3 1 0 THouses Lawrence: 55+ 8 3 2.7 1 (2) _ _ 1 0 0 Lawrence: Single 76 4 19.0 17 13 6 7.9% 7 2 18 Family
  • 46. 1/28/13 Towns Active Pending Absorption New Net Listings % of Expire W/drawn Closed Listings in Last Rate in Listings in Gain Reduced Invent. d Listings Listings 30 Days Months 30 Days (Loss) in 30 Reduced Listing to Days s Market Plainsboro All Styles 61 10 6.1 14 4 10 16% 11 0 8 Plainsboro Condo/ 30 5 6 9 4 7 23% 7 0 4 THouses Plainsboro 55+ 17 3 5.66 2 (1) 2 12% 1 0 1 Plainsboro Single 14 2 7 3 1 1 7% 3 0 3 Family Cranbury: All Styles 12 1 12 5 4 2 16% 3 0 3
  • 47. 1/28/13 Towns Active Pending Absorption New Net Gain Listings % of Expired W/drawn Closed Listings in Last Rate in Listings in (Loss) to Reduced in Invent. Listings Listings Listings 30 Days Months 30 Days Market 30 Days Reduced Ewing: All Styles 198 17 11 33 16 33 17% 16 5 16 Ewing : Condo/ 29 3 10 6 3 6 21% 1 3 0 T.Houses Ewing 55+: 8 1 8 2 1 --- --- 0 0 0 Ewing: Single 161 13 12 25 12 27 17% 15 2 16 Family East Windsor: 139 12 12 26 14 18 13% 11 2 11 All Styles East Windsor: 85 7 12 16 9 13 15% 7 1 8 Condo/ Thouses East Windsor: 8 0 999 1 1 --- --- 0 0 1 55+ East Windsor: 46 5 9 9 4 5 11% 4 1 2 Single Family
  • 48. 1/28/13 Towns Active Pending Absorption New Net Gain Listings % of Expired W/drawn Closed Listings in Last Rate in Listings in (Loss) to Reduced in Invent. Listings Listings Listings 30 Days Months 30 Days Market 30 Days Reduced Hopewell Twp. 101 6 16.8 16 10 12 11.9% 11 8 7 All Styles Hopewell Twp. Condo/ 2 0 99 1 1 1 50% 2 2 2 T.Houses Hopewell Twp.: 1 0 99 0 0 -- -- 0 0 1 55+ Hopewell Twp Single Family 98 6 16.3 15 9 11 11.2% 9 6 4 Hamilton: All Styles 390 26 15 70 44 67 18.6% 25 9 32 Hamilton: Condo/ THouses 79 6 13.2 12 6 16 20.3% 5 2 4 Hamilton: 55+ 21 1 21 7 6 -- -- 1 1 2 Hamilton: Single Family 290 19 15.3 51 32 51 17.6% 19 6 26
  • 49. 1/28/13 Towns Active Pending Absorption New Net Gain Listings % of Expired W/drawn Closed Listings in Last Rate in Listings (Loss) to Reduced Invent. Listings Listings Listings 30 Days Months in 30 Market in 30 Reduced Days Days 71 11 6 17 6 13 18% 11 4 13 Robbinsville All Styles 35 6 6 7 1 6 17% 6 1 8 Robbinsville Condo/ T.Houses 36 5 7 10 5 7 19% 5 3 5 Single Family 51 6 9 8 2 15 29% 5 0 6 Hightstown Boro: All Styles 14 3 5 3 0 2 14% 1 0 2 Pennington 6 3 2 1 (2) 5 83% 0 2 1 Hopewell Boro
  • 50. 1/28/13 Towns Active Pending Absorption New Net Gain Listings % of Invent. Expired W/drawn Closed Listings in Last Rate in Listings in (Loss) to Reduced Reduced Listings Listings Listings 30 Days Months 30 Days Market in 30 Days Princeton: All Styles 111 9 12.3 18 9 14 12.6% 8 7 20 Princeton: Condo/ Thouses 28 4 7 3 -1 4 14.3% 3 1 4 Princeton: Single Family 83 5 16.6 15 10 10 12% 5 6 16
  • 51. 1/28/13 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 Days Reduced South Brunswick 149 9 16 28 19 14 9 32 6 36 All Styles South BrunswickCon do/ T.Houses 53 4 13 12 8 8 15 10 1 9 South Brunswick 34 0 99 2 2 4 12 1 2 4 55+ South Brunswick 62 5 12 14 9 2 3 21 3 17 Single Family Monroe: All Styles 401 25 16 109 84 17 4 48 8 45 Monroe: 55+ 268 15 18 76 61 9 3 27 4 34 Monroe: Single Family 143 10 14 33 23 8 6 21 4 11
  • 52. 1/28/13 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 Montgomery All Styles 90 18 5 23 +5 14 15% 14 5 12 Montgomery Condo/Twnhms 11 3 3.7 6 +3 2 18% 3 2 5 Single Family 79 15 5.3 17 +2 12 15% 11 3 7 Hillsborough All Styles 174 24 7.2 49 +25 23 13% 18 10 14 Hillsborough Condo/Twnhms 70 9 7.8 22 +13 11 16% 9 5 8 Hillsborough Single Family 104 15 6.9 27 +12 12 11% 9 5 6
  • 53. 53 Market Scale for Supply & Demand High Supply/Low Demand Low Supply/High Demand Normal 1 Market Absorption in Months Weichert has been 2 studying market conditions for more than 3 3 decades and has found a direct correlation between 4 market absorption and 5 property values. Normal 6 As absorption rates 7 increase beyond a normal market level of 5-6 8 months, property values depreciate annually. 9 Note: This Market Scale is valid 10 only for absorption rates between 1 and 12 months. 11 12
  • 54. Understand the Market That You are Buying/ Selling in…
  • 55. Sample Market Absorption Rate Anytown., NJ 107 current active listings 24.3 = months absorption 4 reported sales in last 30 days rate 5-6 Months Market Absorption Rate indicates a normal market.
  • 56. Market Absorption Rate West Windsor BedroomTownhouses 3+ Bedroom 3 current active listings 1.5 months = absorption 2 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
  • 57. Market Absorption Rate West Windsor Condos/ Townhouses 8 current active listings 1.6 months = absorption 5 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
  • 58. Market Absorption Rate Princeton Condos/ Townhouses 24 current active listings 4.8 months = absorption 5 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
  • 59. Market Absorption Rate Lawrence Condos/ Townhouses 46 current active listings 5.75 months = absorption 8 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
  • 60. Market Absorption Rate West Windsor Single Family Homes Less than $600K 29 current active listings 7.24 months = absorption 4 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
  • 61. Market Absorption Rate West Windsor Single Family Homes $600K - $800K 18 current active listings 18 months = absorption 1 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
  • 62. Market Absorption Rate West Windsor Single Family Homes $800K + 4 current active listings 4 months = absorption 1 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
  • 63. Market Absorption Rate Princeton Twp & Boro Single Family Homes $600K - $800K 11 current active listings 11 months = absorption 1 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
  • 64. Market Absorption Rate Princeton Single Family Homes $800K - $1M 13 current active listings 99* months = 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
  • 65. Market Absorption Rate Princeton Twp & Boro Single Family Homes $1M - $2.0M 28 current active listings 14 months = absorption 2 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
  • 66. Market Absorption Rate Princeton Single Family Homes $2 million + 18 current active listings 99* months = 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
  • 68. ‘I don’t want to buy a house and then watch it drop in value!’
  • 69.
  • 70.   Purchase Price $329,000 Loan Amount $317400 Down Payment $11,515 Monthly P&I $1802 Appreciation/Depreciation Home Value 1st Year -3% $319,130 2nd Year 0% $319,130 3rd Year 1% $322,321 4th Year 3% $331,990 5th Year 5% $348,590 5 Year Appreciation/Depreciation $19,500 Vs Paying Rent @ Tax Benefit   $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 Gain $44,200 v Pay Rent
  • 71.   Purchase Price $329,000 Loan Amount $317400 Down Payment $11,515 Monthly P&I $1802 Appreciation/Depreciation Home Value 1st Year 5 $319,130 2nd Year 3% $319,130 3rd Year 2% $322,321 4th Year 2% $331,990 5th Year 2% $348,590 5 Year Appreciation/Depreciation $48,590 Vs Paying Rent @ Tax Benefit   $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 Gain $73,529 v Pay Rent
  • 72. + The Amortization Schedule on a Loan Yearly Schedule of Balances and Payments Beginning Cumulative Cumulativ Ending Year Payment Principal Interest Balance Principal e Interest Balance 2010 $315,646.96 $21,625.92 $4,374.96 $17,250.96 $6,128.00 $24,508.72 $311,272.00 2011 $311,272.00 $21,625.92 $4,621.30 $17,004.62 $10,749.30 $41,513.34 $306,650.70 2012 $306,650.70 $21,625.92 $4,881.98 $16,743.94 $15,631.28 $58,257.28 $301,768.72 2013 $301,768.72 $21,625.92 $5,157.36 $16,468.56 $20,788.64 $74,725.84 $296,611.36 2014 $296,611.36 $21,625.92 $5,448.28 $16,177.64 $26,236.92 $90,903.48 $291,163.08
  • 73. Appreciation (conservitive): $19,500 + Amortization: $20,109 + Tax Benefit of Home Ownership $25,000 + Low Interest Rates: $5000 ___________________ total 5 year gain = $69,609
  • 74. Market Absorption Scale (Absorption Rate in Months) 5-6 months absorption rate indicates a normal market.
  • 75. 1. ‘I am going to time the Market and buy/ sell at the time when inventory & buyer count is in my favor…’ Source: MLS
  • 76. Listing v Contracts: Dec – Jan 2011, Mercer County
  • 77. Listing v Contracts: Dec – Jan 2012, Lawrence Twp.
  • 78. 3. ‘I am going to wait until the price comes down further and then make an offer/ if I lower my price I will get lower bids…? Source: MLS
  • 79. Don’t Wait Hopewell Twp: 82% Homes currently Under Contract: 17 Under contract within 30 days of Listing at the Right Price or Re-positioning in line with the market : 14 Princeton 63% Homes currently Under Contract: 19 Under contract within 30 days of Listing at the Right Price or Re-positioning in line with the market : 12
  • 80. It’s About Price Sellers, if your listing hasn’t gone under contract in the last 30 days and the price is not adjusted it will not go under contract in the next 30. If the home your buyer wants has not had a price adjustment in the last 30 days it is the perfect time to go face to face with the seller to negotiate!
  • 81. Financial Benefits and Process of Home-Ownership. Brian McDaniel, Loan Officer Weichert Financial Services
  • 82. Pop Quiz… If you take out a $200,000 30 year fixed payment loan from the bank, what is your monthly payment? A. $1901. B. $1640. C. $1201. D. $969.
  • 83. Pop Quiz… What does an average buyer need for a down payment? A. 25% B. 20% C. 10% D. 3.5% D. 0%
  • 85. The Impact of Pricing on the Salability of Your Home..…
  • 86. Home Staging All Negotiations, including real estate, are all about negotiation and control. Who is in control?
  • 87. Negotiations are about leverage, use the listing price as part of yours… Source: MLS
  • 88. Effects of Right Pricing… •Promotes buyer & agent interest • Generates home-viewings • Creates a Sense of Urgency • Sets the stage for multiple purchase offers during the 1st 30 days of marketing • Purchase offers tend to be higher in relation to asking price • Puts the seller in firm control of price negotiations • Likely to result in a higher home selling price in a shorter marketing time period Otteau.com
  • 89. Effects of Over Pricing… In the final stages of Over Pricing – after extended days-on- market and several price reductions – a home begins to attract interest from buyers who are looking to profit from sellers under duress. These buyers, often referred to as bottom-feeders, tend to offer deeply discounted prices for homes. In the end, the Over Pricing scenario has many adverse effects, including: Eliminating all Sense of Urgency Extending marketing time in a price declining market Results in asking price reductions over time Forfeits price control to the buyer Encourages discounted purchase offers Attracts bottom-feeders Otteau.com Leads to lower selling price
  • 90. Princeton Twp. 2010 The Price Trend Came up with a price of $850,000. I recommended a price of $799,000.
  • 91. Negotiations are about leverage, use the listing price as yours… Listed at $799,000. 5 offers, sold at $942,000. The seller had control.
  • 92.
  • 93. One Aim Determining your best asking price. Our unique method goes beyond the traditional assessment of comparable home prices by anticipating changing marketing conditions in your area.
  • 94. 2. The Effect of Staging on the Value of a Home.
  • 95. Home Staging All Negotiations, including real estate, are all about negotiation and control. Who is in control?
  • 96. 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.
  • 97. The Way You Live In Your Home…
  • 98. … And The Way We Market And Sell A House Are Two Different Things.
  • 99. “The Investment in Home Staging is Always Less than Your First Price Reduction!”
  • 100. Buyers Only Know What They See …
  • 101. … Not The Way It Is Going To Be.
  • 102. Home Staging “The investment in home staging is always less than your first price reduction!” *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.
  • 103. Home Staging “The investment in home staging is always less than your first price reduction!” 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. *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.
  • 104. One Aim Determining your best asking price. Our unique method goes beyond the traditional assessment of comparable home prices by anticipating changing marketing conditions in your area.
  • 105. Home Staging All Negotiations, including real estate, are all about negotiation and control. Who is in control?
  • 107. Pre-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.
  • 108. PRE-LISTING Home Inspection DOESN’T THE BUYER DO THE HOME INSPECTION?
  • 109. Home Staging All Negotiations, including real estate, are all about negotiation and control. Who is in control?
  • 110. 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.
  • 111. Return on Home Improvements http://www.remodeling.hw.net/2011/costvsvalue/division/middle-atlantic.aspx
  • 112. What will a real estate company do for me? Weichert Family of Companies
  • 113. 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.
  • 114. The Weichert Difference • Time is money. • Stress kills. • Time is life.
  • 115. What Will a Weichert Agent Do for You? Educate You. Negotiate on your behalf. Offer advice on due diligence. Manage all aspects of the transaction process.
  • 116. We’re Here to Help The Entire Process is reviewed by Legal Council.
  • 117. Become a Fan! www.facbook.com/weichertprinceton www.weichert-princeton.com We post a ton of great market data on these two sites.
  • 118. Resource and website list: Realtor.org http://www.facebook.com/pages/ NAR-Research/73888294183# Remodeling.com
  • 119. Resource and Website List http://www.realtor.org/research/res earch/housinginx Remodeling.com www.Otteau.com www.Pre-listing-inspection.com
  • 120. Resource and Website List: www.Housemaster.com www.Stagingshoppingcenter.com
  • 121. Resource and website list: www.Stagedhomes.com www.realestatestagingassociation.com www.realtytrac.com

Editor's Notes

  1. http://www.realtor.org /
  2. http://www.realtor.org /
  3. https://pulsenomics.com/Dec_2012_HPE_Survey.html
  4. (elicit responses)
  5. (elicit responses)
  6. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  7. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  8. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  9. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  10. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  11. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  12. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  13. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  14. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  15. Populate this table to show the local absorption rate in the various price ranges that are appropriate for your market area. Please add or delete rows as necessary to adequately reflect local conditions.
  16. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  17. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  18. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  19. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  20. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  21. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  22. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  23. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  24. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  25. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  26. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  27. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  28. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  29. Create your own table to approach the aspects of the marketplace that you consider most relevant and valuable to your associates. For ideas on what to cover, refer to the tables in the Planning Day Presentation on your Planning Day 2005 CD. For example, you might discuss the market conditions of different communities or price ranges each week.
  30. Create your own table or put together a bulleted list that covers the aspects of the marketplace that you consider most relevant and valuable to your Associates. Examples of items that might be used on this slide include trends in sales, prices, inventory and/or foreclosures in the different communities in your local market; news from your local board of Realtors; what the competition is doing, etc.
  31. Create your own table or put together a bulleted list that covers the aspects of the marketplace that you consider most relevant and valuable to your Associates. Examples of items that might be used on this slide include trends in sales, prices, inventory and/or foreclosures in the different communities in your local market; news from your local board of Realtors; what the competition is doing, etc.
  32. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  33. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  34. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  35. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  36. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.
  37. Review the generic sample calculation and/or a customized calculation you prepared for your office market area. Follow the instructions below to update this slide with customized information for your office. Save the Sales Meeting Guide presentation to your C drive. Open the Sales Meeting Guide presentation from your C drive. Scroll down to the “Sample Market Absorption Rate” slide in the weekly training section of the presentation. Double-click on the slide to be able to make edits. Click in each section of the formula to edit text. Save the document to save edits.