Historic home prices in the US increased by about 0.5% per year on average from 1890 to 2008 after adjusting for inflation. However, since 2008 median home prices have declined and settled back to 2003 levels due to various economic factors. The document then provides data on current and historical housing market conditions in various New Jersey towns, including active listings, pending sales, absorption rates and other metrics.
1. Historic Home Prices When adjusted for inflation, American home prices increased by an average of about half a percentage point per year from 1890 through 2008, according to data compiled by Yale University Professor Robert Shiller. ( www.USNews.com/money - Luke Mullins, March 4, 2010)
2. Home Prices Now Now, however, as a result of many economic factors since 2008, the median American home prices have settled back to 2003 levels. Source: Case Schiller Non-Seasonally Adjusted Composite 20 U.S. Home Price Index as of March 2010
3. 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
5. How do we assess vitality in our real estate markets? By checking the Absorption Rate . It is the number of homes available in the market divided by the number of homes that have gone under contract in the past 30 days. It is our most accurate measure of current market strength .
6. Sample Market Absorption Rate 100 current active listings 4 reported sales in last 30 days = 25 Months’ absorption rate Anytown., NJ 5-6 Months Market Absorption Rate indicates a normal market.
7. Market Absorption Scale (Absorption Rate in Months) 5-6 months absorption rate indicates a normal market.
8. 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. Market Absorption in Months 1 2 3 4 5 6 7 8 9 10 11 12 Normal
10. 9/20/10 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 54 5 10.8 8 3 10 18.5% 3 6 3 Pton -Boro Condo/ Thouses 24 2 12 2 0 7 29.2% 0 4 2 Pton-Boro Single Family 30 3 10 6 3 3 10% 3 2 1 Pton Twp: All Styles 130 4 32.5 19 15 19 14.6% 2 7 19 Pton Twp: Condo/ Thouses 17 0 17 7 7 4 23.5% 0 1 5 Pton Twp: Single Family 113 4 28.3 12 8 15 13.3% 1 6 14
11. 9/20/10 Towns Active Listings Pending in Last 30 Days Absorption Rate in Months New Listings in 30 Days Net Gain (Loss) to Market Li1stings Reduced in 30 Days % of Invent. Reduced Expired Listings W/drawn Listings Closed Listings West Windsor: All Styles 128 11 11.6 26 15 36 28.1% West Windsor Condo/ T.Houses 28 4 7 11 7 7 25.9% West Windsor 55+ 8 0 99 2 2 -- -- West Windsor Single Family 92 7 13.1 13 6 29 31.5% Lawrence: All Styles 240 13 18.5 31 18 67 27.9% Lawrence: Condo/ THouses 84 1 84 12 11 24 28.6% Lawrence: 55+ 18 3 6 3 0 -- -- Lawrence: Single Family 138 9 15.3 16 7 43 31.1%
12. 9/20/10 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 307 14 21.9 37 23 62 20.2% Ewing : Condo/ T.Houses 44 1 44 3 2 8 18.2% Ewing 55+: 5 1 5 0 -1 -- -- Ewing: Single Family 258 12 21.5 34 22 54 20.9% East Windsor: All Styles 228 9 25.3 38 29 56 24.6% East Windsor: Condo/ THouses 133 5 26.6 27 22 26 19.5% East Windsor: 55+ 22 0 99 2 2 -- -- East Windsor: Single Family 73 4 18.3 9 5 30 40.1%
13. 9/20/10 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 178 17 10 31 14 42 24% 6 4 20 Hopewell Twp. Condo/ T.Houses 12 4 3 3 1 3 50% 0 1 2 Hopewell Twp.: 55+ 12 1 12 1 0 -- -- 0 0 2 Hopewell Twp Single Family 154 12 13 27 15 36 23% 6 3 16 Hamilton: All Styles 675 89 8 138 49 174 26% 42 14 35 Hamilton: Condo/ THouses 113 18 6 18 0 38 34% 13 3 5 Hamilton: Single Family 51 5 10 15 10 -- -- 1 0 2 Hamilton: 55+ 511 66 8 10 39 136 27% 28 11 28
14. 9/20/10 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 146 13 11 22 9 54 37% 10 5 14 Robbinsville Condo/ T.Houses 64 9 7 9 0 22 34% 6 2 8 Single Family 82 4 20.5 13 9 32 39% 4 3 6 Hightstown Boro: All Styles 69 5 14 5 0 16 23% 6 7 3 Pennington 17 1 17 6 5 7 41% 4 5 4 Hopewell Boro 20 0 99 5 5 5 25% 1 1 1
15. 9/20/10 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 245 8 30 38 30 32 13% 18 5 30 South BrunswickCondo/ T.Houses 75 3 25 19 16 13 17% 11 3 14 South Brunswick 55+ 29 1 29 1 0 1 3% 0 0 3 South Brunswick Single Family 141 4 35 22 18 18 13% 7 2 13 Monroe: All Styles 483 19 25 90 71 77 16% 51 7 43 Monroe: 55+ 297 15 20 58 43 56 19% 34 2 34 Monroe: Single Family 186 4 47 32 26 21 12% 17 5 9
16. 9/20/10 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 Montgomery All Styles 162 10 16.2 29 0 44 27% 10 6 13 Montgomery Condo/ Twnhouses 20 1 20 5 -2 10 50% 1 3 3 Montgomery Single Family 142 9 16 24 2 34 24% 9 3 10 Hillsborough All Styles 272 16 17 47 -13 52 19% 20 14 26 Hillsborough Condo/ Twnhouses 72 4 18 10 -7 18 25% 4 8 5 Hillsborough Single Family 200 12 17 37 -6 34 17% 16 6 21
17. Incredibly Low Interest Rates Source: Weichert, Realtors Financial Services Over the past two months, interest rates have hit the lowest point since official tracking began—hitting 4 3 / 8 % for 30-year fixed rate mortgages with no points .
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20. What happens now? These historically low mortgage interest rates, lower home prices, and a good number of homes to choose from, should revive sales and housing starts. This week’s numbers on new housing starts are particularly encouraging.
21. Strategies to Buy or Sell: Understand the complete financial picture—the mortgage-interest tax deduction, the real estate tax deduction, appreciating home value over time— when buying a home. Understand the total LOCAL real estate picture when preparing to sell.
Notas do Editor
(elicit responses)
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.