Princeton Real Estate And Real Estate Around The Country
What is the risk of real estate prices in Princeton, as well as homes in Montgomery, West Windsor and other surrounding towns, going down in the next several years?
I am not exaggerating when I say this is the question everyone asks me these days, even people who are not planning to buy or sell their home in the near future. My answer usually includes words to the effect of not having a crystal ball, accompanied by the description of exactly what has already happened in Princeton real estate and why. For some areas in the country there are companies that measure risk of future real estate price declines.
PMI Mortgage Insurance Company ranks the nations 50 largest metropolitan statistical areas (MSA) according to the likelihood the home prices will be lower in two years. They recently released their report for the Summer 2008. The positive news in what their index shows is that the risk declined in approximately 86% of the 381 MSAs tracked. The negative news is that the risk continues to intensify in areas with previous fast increases of home prices:
“ In general, risk continued to intensify in many of the MSAs where home price growth had significantly exceeded historical norms during the housing boom, but continued to decline in many other areas across the country.” Of the 50 MSAs, 15 in the two highest risk categories were in California, Florida, Nevada, and Arizona.
The PMI report shows the highest risk of future price declines in:
- Riverside-San Bernardino-Ontario, CA (95.5)
- Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (92.2),
- West Palm Beach-Boca Raton-Boynton Beach, FL (91.9)
The areas with the lowest risk of price declines are each at less than a 1 percent chance:
- Fort Worth-Arlington, TX,
- Dallas-Plano-Irving, TX
- Pittsburgh, PA
The index takes into account many factors including affordability, home price appreciation and unemployment, which rose across all MSAs on average of 5.37%. The East coast has seen some of the larger unemployment increases, with the Edison-New Brunswick(one of the few New Jersey towns tracked) increasing 1.17%, this being the 4-th highest increase in this region.
Princeton real estate, Montgomery, and West Windsor are not included in this index, so no such statistical data is available for us to analise. Helping my clients understand local real estate often boils down to understanding the market on the level of the specific neighborhood, housing development, particular price range and even a specific house.
For example, now I see relatively limited supply and therefore pent up demand for a certain type of Princeton houses in the $1.3ml – $2ml price range. When such houses come on the market , they sell quickly, sometimes within a week of going on the market. Houses that do not meet the demands of the buyers, although relatively similar, continue to linger and have price reductions. The interesting part of this phenomenon is the right timing. Right timing means the right price and marketing based on the understanding of the supply and demand for Princeton real estate on the micro level of an individual house, street,a development and Princeton neighborhood.
Why Some Princeton Houses Sell Quickly
Montgomery Township NJ Real Estate Market Report – June & Six Months 2008
Princeton NJ Mercer County Real Estate Market Housing Report -Second Quarter 2008
How To Buy And Sell Your Princeton Home Like A Pro