Princeton Real estate is difficult to understand

'Princeton houses for sale are now selling a lot faster. At least   it could appear that way if you look at the numbers. The Average Days on the market for April 2008, was down 57% compared to March 2008. The numbers, however, do not reflect the reality, and here is why.

My monthly analysis and market reports for the Princeton New Jersey area real estate, including Montgomery Township, West Windsor and other surrounding towns, is used by buyers and sellers of Princeton homes for sale to help  understand the real estate market. Buyers want to understand Princeton real estate prices and the direction of the market, when making the decision to buy and deciding on what price to offer. The sellers want  want to understand how long does it take to sell a house in Princeton as well as other data to help them price the house correctly and to negotiate the offers.

Real estate information could effect your biggest asset. It is critical to be sure the source of the information is credible and reliable. It is equally to be able to question what the data means, especially when the Information comes from the Internet. You have to be careful you have to be when using Internet.

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Preparing the Princeton Housing market April report was the most recent case in point.

My analysis showed average Days On the Market for April 2008, being down 57% compared to March 2008. The idea of Princeton NJ area houses selling so much faster now then last month just did not seem right.  Going to my database of all Princeton real estate transactions for this year, I found what produced this effect. In March 2008, there were several houses sold, after more then 1000 and 600 days on the market. Given that the DOM is calculated as an average for all homes sold during the period, it resulted in an unusually high number for March.

Princeton real estate was not selling twice as fast in April. Days on the market could be just a bit less in April, then in March, if the unusual transactions were not included.

My advice to anyone who is working with the information from the Internet is to be extra careful. Find out about the person providing the information and evaluate their knowledge and expertise.  If the web site appears to be credible, contact the person so you can confirm your impressions in person. Once you find a reliable real estate agent  they could become your important information resource and guide through the ins and outs of the Princeton real estate.

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Princeton Real Estate - Brokers Open Houses Observations

As a Princeton NJ real estate agent I get to see a lot of houses in Princeton,  Montgomery Township, Hopewell and surrounding communities. Every week there are new homes for sale going on the market.

Each township has a day when the Brokers Open houses are held.  Brokers Open houses are opportunities for real estate agents to see the newly listed properties. In Princeton and Montgomery Township, Broker Open houses are usually held on Wednesdays. Looking at new listings for Princeton homes for sale and Montgomery Township homes for sale allows me to be current on the Princeton area real estate inventory. It also gives me an updtate on what is going on in the market.

My observation from the last several weeks is that the Princeton real estate sellers are beginning to be more realistic about the condition of the market. The homes for sale in Princeton on todays Brokers Open Houses seemed to be priced more in tune with the market then what I have seen before.

I also see the continual demand for the Lakefront properties. Houses are purchased for $2,000,000+, and then demolished, to build new homes. A Princeton House for sale with lake frontage could be on the market for close to $2.5 mln, with the house requiring a lot of work.

Princeton NJ Real Estate - Social Observations

As a Realtor, specializing in the Princeton area real estate, I get “How is The Market?” question asked not just by clients, but in many social settings as well. After the Brokers Open houses I had a chance to visit with some friends and the conversation, as usual, at some point turned to the question of Princeton real estate. I gather from these discussions, some sellers not wanting to ‘give the house away’. There is a price bellow which the sellers are not willing to reduce the asking price, if not able to sell their house within 6-9 months. These sellers would rather not sell, then go bellow what they perceive as a fair price.

Unfortunately, it would not be an acceptable decision for those who need to sell, because of the job change or other personal and financial issues.

My answer to the question ‘How is the Princeton real estate market?’ is two- fold. Houses are continuing to be sold, if priced right, and people are continuing to look for houses to buy, because life does not stop with the slow real estate market.

Next week there will be more Princeton NJ houses for sale, and hopefully the ones priced right would have found their new owners.

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Why Prices Of Princeton Real Estate Are Confusing

If you want to understand the greater Princeton NJ real estate (including Montgomery Township), you would need to understand home prices and their direction.  If you have difficulty finding this information, or if it seems confusing, you have lots of company.

When I talk about clarity in the real estate prices, I dont mean the future of the housing prices. Predicting Princeton real estate future is not something that could be done accurately, if at all.

I am talking about confusion and difficulty understanding the historical real estate prices. For example, being able to answer questions such as - did the prices go up or down in the last month, last quarter, or last year? It seems that it should be easy, but it turns out to be almost as confusing as predicting the future.

I am working on a project of clarifying the picture for the Princeton real estate market and will publish the results soon.

Lets look at what makes real estate prices of Princeton real estate unclear? It was my January Market Report that made me realize, I have been participating in the confusion, without any intention of doing so.  Let me explain. For the month of January 2008, the data in Princeton shows 42% increase in median price, compared to the same period of last year. I explained to my readers that it is not a cause for celebration, but is rather the effect of several large sales that occurred this January which skewed the results.

The first factor contributing to the confusion, is the large spread in real estate values within a town. For example, in Princeton NJ the range in January 2008 for the houses sold was from $425,000 to $4,125,000. Median price of homes sold depends on the mix of the houses sold in a particular period.  rises In the months when a lot of high end homes are sold the median price rises and it  falls when a lot of lower end homes are sold. 

For example, Princeton real estate report of median prices in March being higher then in February, does not mean that the prices are rising. It could mean that there were more expansive houses in the mix of homes sold in March then in February.

The second reason for the confusion is the fact the all the Princeton real estate home sales are combined. Princeton real estate homes purchased 30 years ago or 3 months ago are all part of the mix.  This can create an illusion that prices are rising, when in fact they could be falling. The price would most likely be higher then original for the houses purchase over 5 yeats ago, while for many Princeton homes bought in the last 3 yeras it could be lower.

Accurate Tracking Of Real Estate Price Trends

The way to eliminate these confusions is to look at the repeat sales of the same houses over a period of time. This is what the two most widely indexes  - Office of Federal Housing Enterprise Oversight (OFHEO) and S&P/Case-Shiller Home Price were indented to do. The problem is that these indexes provide different results. For the 3d quarter of 2007 compared to the same period in 2006, nationally the OFHEO index reports home prices rising 1.8%, while Case/Shiller reports a 4.5 % decline.  Why the discrepancy again? There are several reasons. OFHEO includes only the houses with loans guaranteed by Fannie Mae and Freddie Mac (less the $417,000). Case/ Shiller includes those, but only reports on 20 major markets.  There are other technical differences in treating the data and the differences in results.

The bottom line, is that even with the two above methods the prices of real estate could still be unclear, especially if you dont live in one of the 20 major markets or have a conforming mortgage.

To finally bring some clarity to the issue of home prices, I am doing my own study. Because my resources are much more limited then the Federal Governments or S&Ps, I am limiting my project to the sales of the same homes in Princeton from 2005 to present.  In my upcoming posts I will try to answer,  based on the results of this study, the simple question: are the real estate prices in Princeton up or down?

In the meantime please call 6090553-4175 if you need guidance in determining the price for your Princeton are home for sale, or the offering price for a house.

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You can also learn more about Princeton real estate market in these articles.

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Princeton Mercer County NJ Real Estate Sellers- 3 Things That Sell Houses Now

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Princeton Mercer County NJ Real Estate - Prices of Houses Sold in Princeton -January 2008

Photo by Zeets Jones

Princeton NJ Real Estate| Montgomery Township Real Estate - What You Could Learn From A Flea Market    

What does Princeton NJ real estateMontgomery Township, West Windsor and others surrounding towns) have to do with a flea market?  (including

Princeton Unitarian Universalist Congregation conducts  their annual flea market on the first Saturday in May. It is very popular with Princetonians, and others who come to find bargains. No, you cant find a Princeton home for sale bargain there. But its a fun event and I have been visiting it for many years. I like bargains. I usually ended up with a few things, some useful, some not. All of it goes to a good cause, so I cant lose. You may still wonder what does this have anything to do with Princeton NJ real estate, Mercer County homes for sale, or Montgomery Township Real Estate.

I noticed this years there was a lot less furniture, and ‘expensive’ items and yet there seemed to me more people, some lining up well before the 9am opening. I spoke to one Princeton home owner waiting in line to get in, who said she is there to buy clothing for her teenagers. ‘Who could afford buying in the stores?’ she said.

Princeton NJ real estate market is considered a luxury market, with not that many homes for sale available for less then $600,000. I am not an economist, but  Princeton homeowners shopping for clothing at the flea market, means belt tightening.

My ‘flea market’ conclusions about the Princeton real estate housing market support what I see every day in my job. People often donate household stuff when they move and the old thing no longer fit in the new house.  Less home selling means less donations. Homeowners holding off their home selling because of the slow market, may be also more reluctant to donate more expensive items.

There is positive in todays Princeton real estate

Heavy duty topics is not what I like to cover on weekends. I try to look for positive in what I see. The positive for today: it is still possible to find a bargain at a flea market, and a good deal when buying a home now.

Princeton NJ and Montgomery NJ Real Estate - Silver Lining For Home Sellers                                                             

If you are planning to sell your home in Princeton NJ, Montgomery Township NJ, or other surrounding towns you may be disappointed and stressed about the present market. Real estate buyers, who  seemingly have an upper hand now, are also stressed by what they still perceive as overpriced Princeton homes for sale and uncertainty of the market.

On  Friday I would like to focus on the positive and one positive are many wonderful people I meet in the course of my work. Today I met a couple from Skillman NJ who are intelligent, smart, and want their home sold. I love working with smart clients. This couple is doing a lot of work to prepare the house for sale and I admire their efforts.

They appreciated advice on how to get the biggest bang for the money in terms of getting the house ready. When deciding on the price, they put aside their feelings for the home and focused on the reality of the market. I wish I had better news for them regarding the price, but they understood  that Realtors dont set the prices, the market does.

This couple and others like them are selling their Princeton NJ area homes because of the next exciting part of their personal and professional lives. Thats the positive focus for me this Friday.

Photo by  Cubbie_n_Vegas