Weichert, Princeton Office May 2010 Market Update 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 www.weichert-princeton.com www.facebook.com/weichertprinceton

The Markets ‘ Trichet: Economy in Deepest Crisis Since WWII’ - NY Times 5/15/10 ‘ Fed's Hoenig Says Low Rates Can Lead to Bubbles:’ - NY Times 5/15/10

The Markets ‘ April retail sales beat expectations Image by Getty Images via Daylife April retail sales rose 0.4 percent, the government said moments ago, a figure that was twice what forecasters were expecting, a sign that consumers are opening their wallets and spending. Removing auto sales from April retail sales did nothing to impact the number, indicating that new car sales rose at the same pace as other consumer goods. Same thing if you remove the volatile fuel and food costs. March retail sales were revised upward and grew at a rate of 1.2 percent. http://voices.washingtonpost.com/economy-watch/2010/05/april_consumer_beats_expectati.html

The Markets ‘ Europe Clouds U.S. Recovery The recovery is beating expectations as new data show consumer and manufacturing strength. But worries persist that it still isn't strong enough to heal deep wounds or withstand a new shock from Europe.

Where are we in US…… http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003

in NJ… http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003

Housing Drives the Economy… Otteau.com

Current Market Drivers… Housing Affordability highest in 18 years (low home prices & low interest rates)… Pent up demand… Demographics… Otteau.com

National RE Market Newx Pending Home Sales Mar. index: 102.9 Monthly: Up 5.3% Yearly: Up 21.1% Realtor.ord

National RE Market Newx Existing-Home Sales Mar.: 5.35 million Monthly: Up 6.8% Yearly: Up 16.1% Realtor.org

The Economic Effect of Homeownership… http://www.nahb.com/generic.aspx?sectionID=734&genericContentID=106491 Single Families Built post 2004 Single Families Built After 2004 Non Moving Owners Appliances $2769 $1919 $1065 Furnishings $5288 $2365 $942 Repairs & Alterations $4275 $4642 $2413

Forecast for 2010 (mid-Atlantic region) Source: NAR, November 2008 Forecast

Otteau Recap:

A long term outlook in NJ & Mercer County Source: NAR, November 2008 Forecast

NJ Housing Permits Source: Census RESIDENTIAL BUILDING PERMITS AUTHORIZED 2000-2008 COUNTY 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total Atlantic County 1,625 1,685 2,020 2,285 2,075 2,002 1,893 1,136 794 15,515 Bergen County 2,847 1,784 1,771 1,289 2,142 2,972 2,164 2,957 1,311 19,237 Burlington County 2,775 2,184 2,359 1,805 1,516 1,475 2,784 1,037 976 16,911 Camden County 796 757 1,160 1,934 1,413 1,706 1,183 1,191 895 11,035 Cape May County 1,242 1,403 1,422 1,693 2,149 2,433 1,580 1,081 485 13,488 Cumberland County 255 256 310 374 566 630 737 683 336 4,147 Essex County 1,491 1,548 1,588 2,235 2,343 3,128 3,284 1,854 1,314 18,785 Gloucester County 1,337 1,635 1,802 1,859 2,050 2,075 1,141 920 788 13,607 Hudson County 1,338 1,116 1,534 2,116 3,808 4,498 4,275 3,081 3,229 24,995 Hunterdon County 616 685 602 814 648 506 350 316 206 4,743 Mercer County 1,283 1,355 1,428 1,188 1,641 1,296 847 700 625 10,363 Middlesex County 2,460 1,884 1,999 2,306 2,622 3,206 2,567 1,597 1,020 19,661 Monmouth County 2,912 2,194 2,372 2,756 2,628 2,584 2,820 2,060 1,526 21,852 Morris County 2,684 1,577 1,914 1,555 1,427 2,503 1,670 1,052 795 15,177 Ocean County 5,633 3,830 3,534 4,009 3,818 2,904 2,114 2,160 1,527 29,529 Passaic County 457 631 689 829 763 647 850 760 432 6,058 Salem County 161 180 170 307 334 297 298 148 198 2,093 Somerset County 2,282 1,439 1,530 1,260 1,362 1,220 1,058 926 791 11,868 Sussex County 719 808 679 587 612 668 603 360 302 5,338 Union County 776 551 681 1,198 1,399 1,278 1,593 1,123 673 9,272 Warren County 896 765 877 585 620 560 512 258 146 5,219 New Jersey 34,585 28,267 30,441 32,984 35,936 38,588 34,323 25,400 18,369 278,893

NJ Housing Permits Source: Census In thousand units

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

Long Term Demand in Mercer County … Source: NAR, November 2008 Forecast Source: https://edis.commerce.state.nc.us/docs/countyProfile/NJ/34021.pdf (Mercer County) Population & Growth Population Annual Growth Rate 2013 Total Population 383,677 0.6% 2008 Total Population 371,963 0.7% 2000 Total Population 350,761

Long Term Demand in Mercer County … Source: NAR, November 2008 Forecast Source: https://edis.commerce.state.nc.us/docs/countyProfile/NJ/34021.pdf Estimated Pop. by Age Pop by Age, % Est. 2013 Median Age 39 2008 Median Age 38 2000 Median Age 36 2008 Total Pop 0-19 98,816 26.6% 2008 Total Pop 20-29 49,307 13.3% 2008 Total Pop 30-39 49,497 13.3% 2008 Total Pop 40-49 58,288 15.7% 2008 Total Pop 50-59 51,605 13.9% 2008 Total Pop 60+ 64,450 17.3%

Economics 101: As supply goes up, prices go ___. Source: NAR, November 2008 Forecast

Princeton Boro Inventory Trends

Princeton Twp Inventory Trend

Lawrence Inventory Trends

Hopewell Inventory Trends

Hopewell Inventory Trends

Hopewell Inventory Trends

Ewing Inventory Trends

West Windsor Inventory Trends

Plainsboro Inventory Trends

YTD Closed Homes Snapshot: 2008 2009 2010 Princeton Twp. 52 31 33 West Windsor 88 68 70 Hopewell 59 38 44 Plainsboro 64 43 59

1. Real Estate is Local Top Five Rules for Understanding the Real Estate Market: 2. Real Estate is Local 3. Real Estate is Local 4. Real Estate is Local 5. Real Estate is Local

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

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

5/4/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings Princeton Boro: All Styles 59 6 9.8 17 11 5 8.5% 0 0 3 Pton -Boro Condo/ Thouses 22 2 11 5 3 2 9.1% 0 0 1 Pton-Boro Single Family 37 4 9.3 12 8 3 8.1% 0 0 2 Pton Twp: All Styles 133 21 6.3 38 8 25 18.8% 3 6 11 Pton Twp: Condo/ Thouses 10 5 2 2 -6 0 0 0 3 3 Pton Twp: Single Family 123 16 7.7 36 14 25 20.3% 3 3 8

5/4/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings West Windsor: All Styles 153 39 3.9 51 3 55 35.9% 5 4 21 West Windsor Condo/ T.Houses 34 8 4.3 12 1 11 32.4% 0 3 10 West Windsor 55+ 13 4 3.3 3 -2 -- -- 1 0 0 West Windsor Single Family 106 27 3.9 36 4 44 41.5% 4 1 11 Lawrence: All Styles 243 33 7.7 47 2 72 29.6% 6 6 26 Lawrence: Condo/ THouses 68 15 4.5 15 -4 31 45.6% 4 0 13 Lawrence: 55+ 23 2 11.5 2 -2 -- -- 0 2 2 Lawrence: Single Family 152 16 9.5 39 8 41 27% 2 4 11

5/4/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings PlainsboroAll Styles 71 22 3.2 22 13 18% 6 0 15 Plainsboro Condo/ THouses 38 11 3.4 13 9 23% 4 0 11 Plainsboro 55+ 10 1 10 0 1 10% 1 0 2 Plainsboro Single Family 23 10 2.3 9 3 13% 1 0 2 Cranbury: All Styles 28 6 4.6 7 8 28% 1 0 1 Cranbury: 55+ 2 1 2 1 0 1 50% 0 0 1 Cranbury: Single Family 26 5 5.2 6 1 7 26% 1 0 0

5/4/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings Ewing: All Styles 272 22 12.4 61 27 78 28.7% 6 6 18 Ewing : Condo/ T.Houses 44 3 14.7 10 5 11 25% 0 2 6 Ewing 55+: 7 0 99 1 1 -- -- 0 0 0 Ewing: Single Family 221 19 11.6 50 21 67 16.7% 6 4 12 East Windsor: All Styles 186 23 8.1 36 -1 42 22.6% 8 6 17 East Windsor: Condo/ THouses 103 9 11.4 20 3 23 22.3% 3 5 5 East Windsor: 55+ 22 1 22 2 -1 -- -- 1 1 0 East Windsor: Single Family 61 13 4.7 14 -3 19 31.1% 4 0 12

5/10/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings Hopewell Twp. All Styles 190 27 7 61 34 42 22% 10 10 17 Hopewell Twp. Condo/ T.Houses 16 9 8 (1) 7 44% 1 1 3 Hopewell Twp.: 55+ 10 0 99 - - - - - - - Hopewell Twp Single Family 164 18 9 53 35 35 21% 9 9 14 Hamilton: All Styles 582 101 6 129 28 181 31% 41 21 72 Hamilton: Condo/ THouses 113 27 4 20 (7) 40 35% 8 4 20 Hamilton: Single Family 427 71 6 109 38 141 33% 33 17 52 Hamilton: 55+ 41 3 14 - - - - - -- -

5/10/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings Robbinsville All Styles 136 17 8 38 11 39 29% 9 6 12 Robbinsville Condo/ T.Houses 69 9 8 18 9 16 23% 2 5 9 Single Family 67 8 8 20 12 23 34% 7 1 3 Hightstown Boro: All Styles 77 4 19 14 10 12 16% 4 3 4 Pennington 26 3 9 6 3 8 31% 1 1 4 Hopewell Boro 20 3 7 5 2 6 30% 2 1 2

5/4/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings South Brunswick All Styles 209 31 7 57 26 57 26% 8 3 27 South BrunswickCondo/ T.Houses 62 15 4 21 6 20 32% 6 1 12 South Brunswick 55+ 25 2 12.5 1 1 0 0% 0 0 4 South Brunswick Single Family 122 14 10 35 21 37 30% 2 2 11 Monroe: All Styles 450 41 11 110 69 72 16% 36 3 51 Monroe: 55+ 275 24 11 71 47 36 13% 18 1 35 Monroe: Single Family 176 17 10 39 27 36 20% 18 2 16

/2010 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings Montgomery All Styles 153 37 4.1 52 29 58 38% 2 3 18 Montgomery Condo/Twnhms 24 10 2.5 11 3 7 29% 0 2 6 Single Family 129 27 4.8 41 26 51 39.5% 2 1 12 Hillsborough All Styles 215 43 5 65 21 63 29% 8 10 26 Hillsborough Condo/Townhouses 86 20 4.3 33 19 19 22% 3 3 8 Hillsborough Single Family 129 23 5.6 32 2 44 34% 5 7 18

Source: otteau.com, 4 th quarter 2009

Market Scale for Supply & Demand High Supply/Low Demand Low Supply/High Demand Normal 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. Note: This Market Scale is valid only for absorption rates between 1 and 12 months. Market Absorption in Months 1 2 3 4 5 6 7 8 9 10 11 12 Normal

Understand the Market That You are Buying/ Selling in… I want to live/ sell in West Windsor…..

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

Market Absorption Rate Comparable Properties 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 140 current active listings 37 reported ‘pending’ sales in last 30 days 3.8 month absorption rate West Windsor All Listings =

Market Absorption Rate Comparable Properties 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 current active listings 10 reported ‘pending’ sales in last 30 days 6.4 month absorption rate West Windsor $0 - $500k =

Market Absorption Rate Comparable Properties 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 current active listings 14 reported ‘pending’ sales in last 30 days 2.6 month absorption rate West Windsor $500k - $700k =

Market Absorption Rate Comparable Properties 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 29 current active listings 13 reported ‘pending’ sales in last 30 days 2.2 month absorption rate West Windsor $700k - $1M =

Market Absorption Rate Comparable Properties 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 10 current active listings 0 reported ‘pending’ sales in last 30 days 99 month absorption rate West Windsor $1M + =

Market Absorption Rate Comparable Properties 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 current active listings 10 reported ‘pending’ sales in last 30 days 6.4 month absorption rate West Windsor $0 - $500k =

Market Absorption Rate Comparable Properties 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 current active listings 3 reported ‘pending’ sales in last 30 days 11.3 month absorption rate West Windsor $0 - $500k Single Family =

Market Absorption Rate Comparable Properties 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 30 current active listings 7 reported ‘pending’ sales in last 30 days 4.2 month absorption rate West Windsor $0 - $500k =

2. ‘I am going to time the Market and buy/ sell at the time when inventory & buyer count is in my favor…’ Source: MLS

Weekly Guests Thru the Weichert Princeton Open Houses, 2009

Source: MLS Inventory Levels, Princeton Twp. New Jersey, 2009

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

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

3/16/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings PlainsboroAll Styles 74 18 4.1 36 17 9 12.2% 0 1 7 Plainsboro Condo/ THouses 36 7 5.1 22 15 2 5.6% 0 0 5 Plainsboro 55+ 17 3 5.7 3 0 - - 0 0 1 Plainsboro Single Family 21 8 2.6 11 2 7 3.3% 0 1 1 Cranbury: All Styles 24 1 24 5 2 5 20.8% 1 1 2 Cranbury: 55+ 1 0 99 0 -1 - - 0 1 0 Cranbury: Single Family 23 1 24 5 3 5 21.7% 1 0 2

3/16/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Listings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings Princeton Boro: All Styles 31 1 31 10 6 4 12.9 2 1 3 Pton -Boro Condo/ Thouses 10 1 10 4 1 1 10 2 0 1 Pton-Boro Single Family 21 0 99 6 5 3 14.3 0 1 2 Pton Twp: All Styles 102 8 12.8 30 21 10 9.8 1 0 6 Pton Twp: Condo/ Thouses 13 2 6.5 4 2 2 15.4 0 0 3 Pton Twp: Single Family 89 6 14.8 26 19 8 9 1 0 3

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

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

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

Seeing the Opportunity.

Jeff Smith, Loan Officer Weichert Financial Services Financial Benefits and Process of Home-Ownership.

‘ 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 Tax Benefit Vs Paying Rent @ $1600/mo 1st Year $5,000 $19,200 2nd Year $5,000 $19,200 3rd Year $5,000 $19,200 4th Year $5,000 $19,200 5th Year $5,000 $19,200 5 Year Total $25,000 $96,000 Total Gain $44,200 Create Equity 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 Tax Benefit Vs Paying Rent @ $1600/mo 1st Year $5,000 $19,200 2nd Year $5,000 $19,200 3rd Year $5,000 $19,200 4th Year $5,000 $19,200 5th Year $5,000 $19,200 5 Year Total $25,000 $96,000 Total Gain $73,529 Create Equity v Pay Rent

+ The Amortization Schedule on a Loan Yearly Schedule of Balances and Payments Year Beginning Balance Payment Principal Interest Cumulative Principal Cumulative Interest Ending 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

The Impact of Pricing on the Salability of Your Home..…

‘ Great speech but does it really work?

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

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 .

Non-Staged The Way You Live In Your Home…

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

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

Non-Staged Buyers Only Know What They See …

… Not The Way It Is Going To Be. Staged

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.

Why Promote Home Staging ? The average increase in sales price of an ASP Staged vs. non-Staged home is 6.9% . That is an additional $31,050 on a $450,000 sale.

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

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

What is ‘ Pre-Inspection?’

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.

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

All Negotiations, including real estate, are all about negotiation and control. Who is in control? Right Price Right Staging All Repairs are done in advance. Offer a Home Warranty to the buyer..

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% .

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.

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.

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

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.

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