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The Weichert Princeton Office November Market Update Seminar.
Citation preview
Weichert, Princeton Office November 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.facebook.com/weichertprinceton
Presented by:
The presentation will be posted on the
following site immediately after today’s
session to the following site.
Will be available for downloads thru Monday.
www.facebook.com/weichertprinceton
Agenda
1. The Market
2. Strategies for Buying
3. Strategies for Selling
Agenda
1. The Market:
- The National Economy a
Year Ago…
Source: www.imf.org
Source: www.imf.org
Source: www.imf.org
‘TARP…BAILOUTS…
CREDIT CRUCH…“TBTF”
RECESSIONISTA…CREDIT DEFAULT SWAP’
Source: Autodata
We learned a new vocabulary…
Source: yahoo finance
5 Year Picture of the DOW…
‘Congrats! You Just Lived Through the Worst Stock
Market Drop Since the Depression’-about.com
Source: Autodata
We Survived…
WSJ estimates over $8.4 trillion lost in the stock market crash.
Source: wsj
From the end of 2006 through March 31, it says, the total market value of U.S. household real estate
fell from $21.9 trillion to $17.9 trillion. That's about 18%. (The lost
wealth works out at just over $13,000 for every person in the
country.)Source: wsj
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003
The consequences…
http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST34000003
The consequences…
What about the Real Estate Markets….?
A real estate market correction was taking shape the summer
of 2001…Inventory was growing…Rates were edging up…
Contracts were slowing…
Unsold Inventory from the MLS in Weichert Market Areas10/20/2003 thru 9/14/2009
0
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ASHBY TOTAL DOEPPER TOTAL BIXON TOTAL MCDONALD TOTAL PREVETE TOTAL WATERS TOTAL WILLIAMS TOTAL
9/13/0432,893
9/12/0538,513
9/11/0683,739
9/17/07*91,009
9/15/0891,267
*added Waters & Williams Region to Totals
9/14/0983,431
Listings from the MLS in Weichert Market AreasListings from the MLS in Weichert Market Areas
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.
Variance % 2009 from 2008NY (Ashby) -9.26%CT (Doepper) +1.44%Passaic/Hudson/Bergen NJ (Bixon) +.32%Western Central NJ/Lehigh Valley PA (McDonald) +.32%Northern and Central NJ (Prevete) +.28%Eastern Central/Shore Points NJ (Waters) +.08%Southern NJ (Williams) -.03%
123 Any street, Princeton, NJ
• First Time home buyers were priced out of the market
• Financing was too available (ie ‘subprime’)
• Banks made bad bets (ie that home prices would continue to
rise)Lehman, Merril, over 300+ fail• Credit freeze, affects ‘main street’
business…
A long term outlook in Mercer County…
Source: NAR, November 2008 Forecast
Long Term Supply …
Source: NAR, November 2008 Forecast
Richardson Commercial
Long Term Demand in Mercer County …
Source: NAR, November 2008 ForecastSource: https://edis.commerce.state.nc.us/docs/countyProfile/NJ/34021.pdf
(Mercer County) Population & Growth Population Annual Growth Rate2013 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 ForecastSource: https://edis.commerce.state.nc.us/docs/countyProfile/NJ/34021.pdf
Estimated Pop. by Age Pop by Age, % Est.2013 Median Age 392008 Median Age 382000 Median Age 362008 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%
Fast Forward to today…Have we hit the bottom of the market yet…?!?!?!?
Source: NAR, November 2008 Forecast
Where is the bottom of the market?“The effects (of foreclosures) are continued declining
prices….probably another 5-8%* to the bottom. As for the effect of foreclosure pricing, all of these problems are
causing home prices to go lower than is necessary from an affordability perspective.
That’s because everyone is now worrying about job security.
As a result, the recovery will take place at a faster pace once it gets started.”
– Jeff Otteau (otteau.com- January 2009)
““Everything I am Everything I am seeing tells me we seeing tells me we have arrived at the have arrived at the
bottom of the market, bottom of the market, specifically in the specifically in the
popular and popular and affordable price affordable price
ranges.”ranges.”J. Weichert
6/2009
‘Real Estate is a Bottom up market…’
Weichert, Realtors Weichert, Realtors 2009 Revenue Units % Increase/Decrease by Month2009 Revenue Units % Increase/Decrease by Month
Source: otteau.com
65.4%65.4%Increase in SalesIncrease in Sales$350,000 & Under$350,000 & Under
Recovery Has BegunRecovery Has Begun
September YTD reported internal revenue units
Sales by Price RangeSales by Price Range
Pending Home Sales Up 7 Months in a Row
2001 = 100
Source: NAR
Housing Recovery is Under Way
First-time home buyers purchased 30% of homes in
August.
*NAR Practitioner Survey August 2009
Months Supply of Lower Priced Single Family Homes Falling
Price Category August 2008 August 2009
$99,999 or less 6.8 4.3
$100,000 to 249,999 7.8 4.9
$250,000 to $499,999 10.2 6.4
$500,000 to $749,999 14.0 10.0
$750,000 to $999,999 16.5 10.5
$1,000,000 to $1,999,999 19.8 15.2
$2,000,000 or greater 32.0 31.7
All Single-family 10.0 8.2
Source: NAR (Unpublished data)
Despite this…
*NAR Practitioner Survey August 2009
Source: otteau.com
The Local Inventory Trends.
Economics 101:As supply goes up, prices
go ___.
Source: NAR, November 2008 Forecast
Princeton Boro Inventory Trends: 3 Year Snapshot
Princeton Twp Inventory Trends: 3 Year Snapshot
Lawrence Inventory Trends: 4 year View
Hopewell Inventory Trends: 4 year View
Ewing Inventory Trends: 4 year View
West Windsor Inventory Trends: 4 Year View
Plainsboro Inventory Trends: 4 year View
YTD Closed Homes Snapshot:2007 2008 2009
Princeton Boro
79 71 53
Princeton Twp.
193 155 140
West Windsor
338 279 273
Lawrence 357 266 265
Hopewell 205 179 131
Plainsboro 248 197 209
Plainsboro Inventory Trends: 4 year View
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 Local5. 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.
111/21/09Towns Active
ListingsPending 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 33 7 4.7 5 -2 5 15.2% 2 2 3
Pton -Boro Condo/ Thouses 8 2 4 2 0 1 12.5% 0 1 2
Pton-Boro
Single Family 25 5 5 3 -2 4 16% 2 1 1
Pton Twp: All Styles 107 7 15.3 13 6 18 16.8% 5 8 13
Pton Twp: Condo/ Thouses 21 2 10.5 3 1 6 28.6% 2 0 1
Pton Twp:
Single Family 86 5 17.2 10 5 12 14% 3 8 12
Town by Town Analysis 11/21/09Towns Active
ListingsPending 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 Styles88 19 4.6 26 25 28% 6 4 31 88
West Windsor Condo/ T.Houses
13 5 2.6 7 3 23% 2 0 13 13
West Windsor
55+13 - - 1 - - - - - 13
West Windsor
Single Family
75 14 5.4 18 22 29% 4 4 18 75
Lawrence: All Styles
204 27 7.5 58 21 38 19% 13 10 26
Lawrence:
Condo/
THouses
94 9 10.4 24 15 18 19% 8 6 10
Lawrence:
55+25 0 99 - - - - - - -
Lawrence:
Single Family
85 18 4.7 34 16 20 23% 5 4 16
Town by Town Analysis 11/20/09Towns Active
ListingsPending 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 Styles246 27 9.1 58 31 59 23% 25 11 26
Ewing : Condo/ T.Houses
45 7 6.4 16 9 8 18% 8 2 8
Ewing 55+: 4 0 99 - - - - - - -Ewing:
Single Family
197 20 9.8 42 22 51 26% 17 9 18
East Windsor:
All Styles
172 34 5.0 38 4 25 14% 17 6 32
East Windsor:
Condo/ THouses
99 19 5.2 25 6 15 15% 11 1 15
East Windsor:
55+
18 0 99 - - - - - - -
East Windsor: Single Family
55 15 3.6 13 (2) 10 18% 6 5 17
Market Activity: Town by Town Analysis 11/21/09Towns Active
ListingsPending 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 90 12 8 19 7 20 22% 12 8 17Robbinsville
Condo/ T.Houses 46 6 8 11 5 11 24% 6 5 9Robbinsville
55+ - - - - - - - - - -
-44 6 7 8 2 9 20% 6 3 8
Hightstown Boro: All Styles 51 5 10 8 3 11 22% 4 1 7
Pennington24 1 24 2 1 8 33% 3 0 1
Hopewell Boro:
All Styles 6 3 2 1 (2) 0 0 1 0 1
Market Activity: Town by Town Analysis 11/21/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
=Ag
New Listings in 30 Days
Net Gain (Loss) to Market
Listings Reduced in 30 Days
% of Invent. Reduced
e
Expired Listings
W/drawn Listings
Closed Listings
Hopewell Twp.
All Styles 147 20 7 22 2 27 18% 10 5 11Hopewell Twp. Condo/ T.Houses 12 2 6 3 1 2 17% 2 2 3Hopewell Twp.:
55+ 2 1 2 - - - - - - -
Hopewell Twp. Single Family 133 17 8 19 2 25 19% 8 3 8
Hamilton: All Styles 506 62 8 95 33 123 24% 53 20 91Hamilton:
Condo/ THouses 101 20 5 27 7 33 33% 14 5 23
Hamilton:
Single Family 364 38 10 68 30 90 25% 39 15 68
Hamilton: 55+41 4 10 - - - - - - -
-
Market Activity: Town by Town Analysis 11/21/09Towns Active
ListingsPending 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
65 7 9.2 17 10 8 12% 10 0 20
Plainsboro
Condo/ THouses
34 5 6.8 8 3 5 14% 6 0 13
Plainsboro
55+12 0 12 2 2 1 8% 1 0 1
Plainsboro
Single Family
19 2 9.5 7 5 2 10% 3 0 6
Cranbury:
All Styles33 0 99 5 5 4 12% 3 0 2
Cranbury:
55+5 0 99 0 0 0 0 0 0 0
Cranbury: Single Family
28 0 99 5 5 4 18% 3 0 2
11/21/09Towns Active
ListingsPending in Last 30 Days
Absorption Rate in Months
g
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
169 13 13 37 24 23 14% 21 4 1
South BrunswickCondo/ T.Houses
36 8 4,5 13 5 8 22% 8 0 0
South Brunswick
55+
31 0 0 9 9 4 12% 2 0 0
South Brunswick
Single Family
102 5 20.5 15 10 11 11% 11 4 1
Monroe:
All Styles 428 30 28.8 79 49 65 15% 62 7 5Monroe:
55+ 268 24 12 54 30 44 16% 40 5 2
Monroe:
Single Family 160 6 26.5 25 19 21 13% 22 2 3
Town by Town Analysis 9/21/09Towns Active
ListingsPending 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
196 21 9 54 3 22 11% 21 18 36
South Brunswick
Condo/ T.Houses
61 10 6 27 17 8 13% 6 8 16
South Brunswick
55+
30 1 30 2 1 3 1% 2 3 3
South Brunswick
Single Family
105 11 9.5 25 14 11 10% 13 7 21
Monroe:
All Styles471 30 16 107 77 57 12% 62 4 57
Monroe:
55+302 27 13 70 43 36 12% 26 3 44
Monroe:
Single Family
168 13 13 37 24 21 13% 36 1 12
11/21/09
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
Montgom.102 19 5.4 14 -5 19 18.6% 5 12 30
Hillsboro249 36 6.9 42 6 44 17.7% 13 11 44
Rocky Hill3 0 99 0 0 0 0% 0 0 2
Franklin362 58 6.2 73 15 78 21.5% 32 21 77
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 RateSample Market Absorption Rate
107 current active listings
4 reported sales in last 30 days
=
24.3months absorptionrate
Anytown., NJ
5-6 Months Market Absorption Rate indicates a normal market.
61Market Scale for Supply & Market Scale for Supply & DemandDemand
High Supply/Low Demand Low Supply/High DemandNormal
Ma
rke
t A
bso
rpti
on
in M
on
ths 1
2
3
4
5
6
7
8
9
10
11
12
No
rma
l
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.
Princeton Borough Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
9 2 4.5
$500-999k 12 1 12
$1 million - $2 million
12 0 99
$2- $5 million 10 1 10
Princeton Township Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
6 3 2
$500-999k 53 2 26
$1 million - $2 million
34 2 17
$2- $4 million 22 0 99
$4 + 2 0 99
West Windsor Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$500
51 11 4.6
$500-750k 29 6 4.8
$750-999 16 0 99
$999 + 8 1 8
Lawrence Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$300
101 12 8.4
$300-500 54 8 6.7
$500-700 26 1 26
$700-999 6 0 999
999+ 13 0 99
Ewing Absorption Rate By Price
Towns Active Listings Pending in Last 30 Days
Absorption Rate in Months
0-$150
36 8 4.5
$150-250 123 13 9.4
$250-450 72 9 8
450+ 4 0 99
Understand the Market That You are Buying/ Selling in…
I want to live/ sell in Princeton…..
Market Absorption Scale(Absorption Rate in Months)
5-6 months absorption rate indicates a normal market.
West Windsor Absorption RateWest Windsor Absorption Rate
43 current active listings
9 reported sales in last 30 days
=
4.8months absorptionrate
5-6 Months Market Absorption Rate indicates a normal market.
0-750k: All Styles0-750k: All Styles
West Windsor Absorption RateWest Windsor Absorption Rate
26 current active listings
1 reported sales in last 30 days
=
26months absorptionrate
5-6 Months Market Absorption Rate indicates a normal market.
$750k – 1.0M$750k – 1.0MAll StylesAll Styles
West Windsor Absorption RateWest Windsor Absorption Rate
26 current active listings
3 reported sales in last 30 days
=
8.7months absorptionrate
5-6 Months Market Absorption Rate indicates a normal market.
1.0 – 1.6 M1.0 – 1.6 MAll StylesAll Styles
West Windsor Absorption RateWest Windsor Absorption Rate
25 current active listings
1 reported sales in last 30 days
=
25months absorptionrate
5-6 Months Market Absorption Rate indicates a normal market.
1.6 – 2.5 M1.6 – 2.5 MAll StylesAll Styles
West Windsor Absorption RateWest Windsor Absorption Rate
20 current active listings
0 reported sales in last 30 days
=
99+months absorptionrate
5-6 Months Market Absorption Rate indicates a normal market.
2.5 M+2.5 M+All StylesAll Styles
2. ‘I am going to time the Market and buy/ sell at the time when
inventory & buyer count is in my favor…’
Source: MLS
Source: MLS0
20
40
60
80
100
120
140
160
180
1/7/2007 4/1/2007 6/24/2007 9/23/2007 12/16/2007
Gross # of Guests 2007
Gross # ofGuests 2007
Weekly Guests Thru the Weichert Princeton Open Houses, 2007
Source: MLS
Inventory Levels, Princeton, New Jersey, 2007
0
50
100
150
200
250
1/8/07 3/5/07 4/30/07 6/24/07 8/20/07 10/16/07 12/11/07
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’
0
10
20
30
40
50
60
70
Princeton Pendings
Princeton Price Reductions
Town by Town Analysis 8/18/09
Town by Town Analysis 9/21/09Towns Active
ListingsPending 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
196 21 9 54 3 22 11% 21 18 36
South Brunswick
Condo/ T.Houses
61 10 6 27 17 8 13% 6 8 16
South Brunswick
55+
30 1 30 2 1 3 1% 2 3 3
South Brunswick
Single Family
105 11 9.5 25 14 11 10% 13 7 21
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
10
20
30
40
50
60
70
Princeton Pendings
Princeton Price Reductions
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
20
40
60
80
100
120
West Windsor Pendings
West Windsor Reductions
Source: trend mls
Relationship of Price Reductions to ‘Pending Sales’
0
10
20
30
40
50
60
70
80
90
100
Lawrence Pendings
Lawrence Reductions
Seeing the Opportunity.Seeing the Opportunity.
Seeing the Opportunity.Seeing the Opportunity.
Q. If this were 2005, where would you place the Price and Rate dots?
Prices Rates
High
Mid-Range
Low
A. In 2005, the V would look somewhat like this one, where prices were on the high end of the scale and rates were in the lower range.
Seizing the Opportunity.Seizing the Opportunity.
In recent history, there has never been an opportunity like this, with low prices and low rates. In real estate, this circular area at the bottom of the V is called the “Buying Zone” – it’s an unbelievable time to buy.
Prices Rates
High
Mid-Range
Low
Jeff Smith,
Gold Services Manager/ Loan Officer
Financial Benefits and Financial Benefits and Process of Home-Process of Home-
Ownership.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 Value1st Year -3% $319,1302nd Year 0% $319,1303rd Year 1% $322,3214th Year 3% $331,9905th Year 5% $348,5905 Year Appreciation/Depreciation $19,500
Tax Benefit Vs Paying Rent @
$1600/mo1st Year $5,000 $19,2002nd Year $5,000 $19,2003rd Year $5,000 $19,2004th Year $5,000 $19,2005th Year $5,000 $19,2005 Year Total $25,000 $96,000
Total Gain $44,200Create Equity
v Pay Rent
+ The Amortization Schedule on a Loan
Yearly Schedule of Balances and PaymentsYear
Beginning Balance
Payment Principal InterestCumulative
PrincipalCumulative Interest
Ending Balance
2010 $315,646.96 $21,625.92 $4,374.96 $17,250.96 $6,128.00 $24,508.72$311,272.0
0
2011 $311,272.00 $21,625.92 $4,621.30 $17,004.62 $10,749.30 $41,513.34$306,650.7
0
2012 $306,650.70 $21,625.92 $4,881.98 $16,743.94 $15,631.28 $58,257.28$301,768.7
2
2013 $301,768.72 $21,625.92 $5,157.36 $16,468.56 $20,788.64 $74,725.84$296,611.3
6
2014 $296,611.36 $21,625.92 $5,448.28 $16,177.64 $26,236.92 $90,903.48$291,163.0
8
= Total 5 Year Gain: $59,922
A Great Time to Buy a A Great Time to Buy a HomeHome
First-time homebuyers can receive a tax credit up to $8,000!
NEW TAX CREDITCurrent homeowners may be eligible for a tax credit up to $6,500!
Tax Credit OverviewTax Credit Overview• In 2008, Congress created a tax credit for first-time
homebuyers.
• The tax credit was extremely successful in generating home sales and stimulating the overall economy.
• Realizing the importance of homeownership for individuals and the greater economy, the government enhanced and extended the homebuyer tax credit.
• On Nov. 6, President Obama signed a bill that extended the existing tax credit for first-time buyers and created a new provision for eligible move-up buyers.
The The NEWNEW First-Time Buyer Tax First-Time Buyer Tax CreditCreditAmount 10 percent of the cost of the home, not to exceed $8,000
PropertyAny home that will be used as a principal residence including single-family homes, condos, townhomes and co-ops; not to exceed $800,000
Refundable
Reduces income tax liability for the year of purchase
Income Limit
Adjusted gross income of $125,000 for single or $225,000 for joint tax returns INCREASED (Effective Nov. 7, 2009)!
First-Time Must not have owned a principal residence in three years prior to purchase
Limitation If home is sold within three years of purchase, entire amount of credit is recaptured
Effective Date
Purchases with closing/settlement between Nov. 7, 2009, and June 30, 2010 EXTENDED!
DeadlineWritten binding contract on or before April 30, 2010, with closing/settlement by June 30, 2010 EXTENDED!
The The NEWNEW Current Homeowner Current Homeowner Tax CreditTax Credit
Amount Up to $6,500
Eligibility Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years
Purchased Home
Any home that will be used as a principal residence including single-family homes, condos, townhomes and co-ops; not to exceed $800,000
Refundable
Reduces income tax liability for the year of purchase
Income Limit
Adjusted gross income of $125,000 for single or $225,000 for joint tax returns
Recapture If home is sold within three years of purchase, entire amount of credit is recaptured
Effective Date
Purchases with closing/settlement between Nov. 7, 2009, and June 30, 2010
Deadline Written binding contract on or before April 30, 2010, with closing/settlement by June 30, 2010
Tax Credit FAQsTax Credit FAQs
What Are the Deadlines What Are the Deadlines for Claiming the Credit?for Claiming the Credit?
• A written binding contract to purchase must be in effect no later than April 30, 2010.
• The purchase transaction must close byJune 30, 2010.
What if You ExceedWhat if You Exceedthe Income Limits?the Income Limits?
• Individuals with adjusted gross income of up to $125,000 and married couples with income up to $225,000 can claim the full credit.
• The amount of the tax credit decreases as incomes reach the maximum limits of $145,000 for singles and $245,000 for couples.
• Singles earning more than $145,000 and couples earning more than $245,000 are not eligible for the credit.
What Properties are What Properties are Eligible?Eligible?
• To claim the tax credit, the property must be used as a principal residence. This is generally considered to be the home where you spend 50 percent or more of your time. It can be a condo, single-family detached home, co-op, townhouse or something similar.
• The home must be located in the United States.
• Vacation homes and rental properties are not eligible.
• For new construction, the purchase date is the date you occupy the home. As a result, you must move in by June 30, 2010, to claim the credit.
When Can You Claim the When Can You Claim the Credit?Credit?
• Buyers purchasing homes on or before Dec. 31, 2009, may claim the credit on their 2009 tax returns.
• Buyers purchasing in 2010 will have the option to:
– Claim the credit on their 2009 return, even if the purchase is completed after Dec. 31, 2009;
– File an amended return for 2009 if their purchase is completed after April 15, 2010; or,
– Claim the credit on their 2010 tax returns.
Any Other Any Other Questions?Questions?
How much house can I really afford?
• The first step is to meet with me!
Establish Establish YourYour Buying Buying PowerPower
Factors to consider Factors to consider when buying and when buying and
selling…selling…
Source: MLS
1. Inventory(supply and 1. Inventory(supply and demand)demand)
2. Interest Rates2. Interest Rates
Interest Rates Remain Interest Rates Remain LowLowAverage Annual Rate (30-year fixed rate mortgage)
5%
7%
9%
11%
13%
15%
17%
19%
1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007
Year
Percent
Source: Freddie Mac
The Impact of Pricing on the Salability of Your Home..…
‘Great speech but does it really work?
We know the best way to evaluate pricing
Does this really work?
We know the best way to evaluate pricing
Does this really work?
22. . The Effect of The Effect of StagingStaging on the on the
Value of a HomeValue 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.
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.
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.
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.
3.3.The Effect of ‘The Effect of ‘Pre-Pre-Inspection’Inspection’ on the Sale of on the Sale of
YourYour Home. 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 Making Your Purchase as Smooth as PossibleSmooth 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.
• Time is money.
The Weichert The Weichert DifferenceDifference
• Stress kills.
• Time is life.
Educate You.
Negotiate on your behalf.
Offer advice on due diligence.
Manage all aspects of the transaction
process.
What Will a Weichert Agent Do for Me?
We’re Here to HelpWe’re Here to Help
The Entire Process is reviewed by Legal Council.
Become a Fan!
www.facbook.com/weichertprinceton
www.slideshare.net/jdwilton
Presentation available at all 3 sites, download file through Monday.
Resource and website list:
Realtor.org
http://www.facebook.com/pages/
NAR-Research/73888294183#
Remodeling.com
Resource and Website Resource and Website ListList
http://www.realtor.org/research/research/housinginx Remodeling.com
www.Otteau.com
www.Pre-listing-inspection.com
Resource and Website Resource and Website List:List:
www.Housemaster.com
www.Stagingshoppingcenter.com
Resource and website Resource and website list:list:
www.Stagedhomes.com
www.realestatestagingassociation.com
www.foreclosurepoint.com
www.realtytrac.com
Happy Thanksgiving!Happy Thanksgiving!