MARKET UPDATE Courtesy of Callaway Henderson Sotheby’s International Realty
2018 Year End Greater Princeton Area Residential Real Estate Market Analysis
127 Kingwood Stockton Road | Stockton, NJ 08559 (Delaware Township) $6,000,000
Welcome to 2019, and what a year we just left behind! Twelve months ago, we found ourselves in the uncertain position of attempting to interpret the Tax Cuts & Jobs Act, namely how it would influence the real estate market in the Greater Princeton area. There were general concerns about how stripping deductible benefits to the homeowner— capping state and local tax (SALT) deductions at $10,000 and limiting mortgage interest deductions—would adversely affect high-tax states, New Jersey included. Now, here we are with a year’s worth of data to review, process, and uncover exactly what happened. To be sure, the market was affected. The municipalities with lower average price points than Princeton saw tight inventory and rising interest rates, which in turn pressured buyers during the first half of the year. Indeed, average prices went up in critical local markets including Montgomery, Hopewell, West Windsor, Lawrence, and Robbinsville. Princeton, however, did see the number of transactions and average sale price decline. In Q1 (January–March 2018), the high-end Princeton market was busy, with more sales above $2 million than in any other year, ever. Then that market slowed dramatically as Q2 unfolded, with only three deals in April and May, versus 13 in 2017 and 12 in 2016 during those same traditionally peak months. In the second half of the year, activity generally decreased: Motivated and price-sensitive buyers had run their course and those moving out of discretion (namely local buyers) became more particular as the year rolled along. While inventory increased across the aforementioned municipalities, sales mostly slowed. Montgomery was a bright spot in this transitional real estate landscape, maintaining more transactions at a higher price than the year prior. Hopewell also rebounded with a strong November as buyers found value there with the recalibration of pricing.
These strange times also created shifts in consumer behavior. October and November ended up as its busiest period ever in the Princeton area above $2 million, with six deals going under contract. This strong finish allowed the market to reach a respectable 20 transactions above $2 million—the same number as in 2016 and down a mere three transactions from last year’s total of 23. The common theme in the high-end market is that houses in pristine “movein condition” are the most in demand, with bidding wars occurring for a few of these sought-after properties. Older, larger homes in need of updating, however, are now selling closer to their assessed values, and in some cases lower. Using this as a quick value metric in Princeton, properties overall are selling 20% above their assessed values, while properties above $2 million are selling at 14% above assessment. A further breakdown shows this number to have been 21% for the first six months of the year and 6% for the second half of the year, as some sellers adjusted their pricing to find the market (with condition being a critical factor). Another shift in consumer behavior revealed itself as well: During a typical year, only two to three high-end deals typically occur outside of the MLS with the property not being formally listed on the “open” market. This year, a whopping nine of the 20 deals above $2 million transacted this way—thereby putting a significant asterisk on the data found on pp. 8-9 of this report, as those private sales aren’t reflected in these numbers. We found that as we headed into what is customarily a slower time of year, some people were happy to list their homes, but didn’t want to be on the traditional open market and subjected to an increasingly invasive online audience at a time when many are just doing preliminary research with little genuine, short-term intention to buy. Another important trend to note is the activity in nearby Bucks County, Pennsylvania. In 2018, we kept a close eye on the area with its generally lower property and state income taxes. Upper Makefield, the municipality with pricing most similar to Princeton, saw its average price increase by 15% and the number of transactions increase by 12%. Compare this with Princeton’s overall activity, where the average sale price was down 7% and the number of transactions was off by 21%, and a correlation appears to be undeniable. It should come as no surprise that our company more than doubled its activity in Pennsylvania this year, selling more than 50 homes in Bucks County alone. As we reflect on the past year and look to the new year ahead, we are heartened by the market’s resiliency, continued evidence that we live in a remarkable area which yields a quality of life that often transcends overly scientific introspection. And with this past November’s activity, we are optimistic about 2019. Despite a volatile 2018 stock market close (which doesn’t necessarily help the psychology of buyers and sellers going into the Spring market), it’s our expectation that come April, some residents will realize the tax plan actually provided some benefits, and for many local, discretionary buyers, “life goes on.” All of this said, we know that speculation can sometimes be a worthless pursuit, and so we must be ready for whatever comes. We will stay on top of this ever-changing, segmented market and help our clients, buyers and sellers alike, to make informed decisions that best suit their objectives. Here’s to a 2019 full of progress, valuable opportunities and experiences. Let us know how we can help!
LOCAL Ownership • GLOBAL Connections • REMARKABLE Agents
2018 Sales in Princeton
$ 28
$ 48
$ 74
(MLS-listed)
$ 80
$ 173.8 Million (CHSIR)
2018 UNRIVALED RESULTS Volume of CHSIR private, non-MLS listed sales in Princeton (13):
$40.3 million
Our average sold listing price is
19%
higher than our next closest competitor in Mercer County* We represented sellers of homes sold for as low as
264
>42,000
in Australia, France, and Greece; the Bahamas, Jersey Shore & more!
Bricks & Mortar
referrals placed and received
print + digital distribution of our exclusive magazine,
130,359 69%
increase in total page views on CallawayHenderson.com
Of the 20 closed/pending sales in Mercer County over $2 million, number of sellers we represented:
15
No other company had more than 1.
and as high as
$8.3million
8,362 social media followers from all over the world
Buyers came to us from:
5 continents 10 countries 25 states
Million-dollar marketing at every price point!
We proudly support and reinvest in our local community, financially contributing to more than
views of our high-definition listing videos in 2018 (up 86% year-over-year)
$30,000
THE A-LIST
Of the 8 closed/pending sales in Mercer County at/over $2.5 million, number of sellers we represented:
7 (88%)
50
charitable partners and nonprofit organizations.
43,674
interactions to date using the TouchGallery home search tool in our office windows
#1
83%
annual sales growth in Bucks County, PA
MARKET SHARE in Princeton, Pennington, Hopewell Borough & Township, Lawrence Township, Montgomery, Rocky Hill, and Mercer County**
*Of companies that sold more than 4 listings. **Mercer County and Lawrence Township: based on dollar volume. All others: based on both dollar volume and unit sales. Source: Trend MLS and Trendgraphix data for 1/1/18—12/31/18, plus our own company knowledge, as of January 2019. Each Office Is Independently Owned And Operated.
PRINCETON $1 MILLION & UNDER
Available: 16 Charlton Street | Princeton, NJ 08540 $695,000
Units Sold
2017
2018
% Change
207
164
-20.77 %
$716,237
+1.19 %
55
--
Average Sales Price $707,827 55 Days on Market
Units Sold
2017
2018
97
78
Average Sales Price $1,372,056 $1,317,755 94 108 Days on Market
% Change -19.59 % -3.96 % +14.89 %
PRINCETON $1 MILLION TO $ 2 MILLION
Available: 95 Spruce Street | Princeton, NJ 08540 $1,275,000
PRINCETON $2 MILLION TO $3 MILLION
Available: 53 Hun Road | Princeton, NJ 08540 $2,975,000
Units Sold
2017
2018
22
11
Average Sales Price $2,334,508 $2,354,545 72 289 Days on Market
% Change -50.00 % +0.86 % +301.39 %
PRINCETON $3 MILLION AND OVER
Available: 148 Hodge Road | Princeton, NJ 08540 $3,275,000
Units Sold
2017
2018
% Change
3
0
N/A
N/A
N/A
N/A
N/A
Average Sales Price $3,683,333 186 Days on Market
MONTGOMERY TOWNSHIP
Available: 10 Spyglass Road | Skillman, NJ 08558 (Montgomery Township) $735,000
Units Sold
% Change
2017
2018
241
265
+9.96 %
$675,981
+4.24 %
108
+45.95 %
Average Sales Price $648,459 74 Days on Market
Units Sold
2017
2018
60
39
-35.00 %
$476,587
-0.28 %
Average Sales Price $477,932 79 Days on Market
110
% Change
+39.24 %
PENNINGTON BOROUGH
Available: 18 West Delaware Avenue | Pennington, NJ 08534 $305,000
HOPEWELL BOROUGH
Available: 38 Taylor Terrace | Hopewell, NJ 08525 $458,000
2017 44 Units Sold Average Sales Price $388,155 66 Days on Market
2018
% Change
20
-54.55 %
$460,025
+18.52 %
96
+45.45 %
Units Sold
2017
2018
311
266
-14.47 %
$504,568
+5.45 %
127
+51.19 %
Average Sales Price $478,502 84 Days on Market
% Change
HOPEWELL TOWNSHIP
Available: 19 Baker Way | Pennington, NJ 08534 (Hopewell Township) $749,000
WEST WINDSOR TOWNSHIP
Available: 9 Howard Drive | West Windsor, NJ 08550 $825,000
Units Sold
2017
2018
342
307
-10.23 %
$608,832
+6.97 %
80
+48.15 %
Average Sales Price $569,165 54 Days on Market
% Change
CRANBURY TOWNSHIP
Available: 37 North Main Street | Cranbury, NJ 08512 $550,000
Units Sold
2017
2018
46
43
Average Sales Price $560,629 80 Days on Market
$654,116 74
% Change -6.52 % +16.68 % -7.50 %
WEST WINDSOR, PLAINSBORO AND CRANBURY COMBINED
Available: 81 Petty Road | Cranbury, NJ 08512 $1,595,000
Units Sold
% Change
2017
2018
637
569
-10.68 %
$544,972
+9.45 %
84
+50.00 %
Average Sales Price $497,906 56 Days on Market
Units Sold
2017
2018
410
419
+2.20 %
$317,315
+1.02 %
81
+20.90 %
Average Sales Price $314,125 67 Days on Market
% Change
LAWRENCE TOWNSHIP
Available: 4 Hamilton Court | Lawrenceville, NJ 08648 $525,000
ROBBINSVILLE TOWNSHIP
Available: 122 Heritage Street | Robbinsville, NJ 08691 $435,000
Units Sold
2017
2018
289
240
-16.96 %
$410,696
+9.68 %
73
+14.06 %
Average Sales Price $374,452 Days on Market
64
% Change
LAMBERTVILLE
Available: 53 Ferry Street | Lambertville, NJ 08530 $565,000
Units Sold
2017
2018
67
46
-31.34 %
$428,588
+0.54 %
112
+51.35 %
Average Sales Price $426,301 Days on Market
74
% Change
2018 Year In Review
Click here to view our 2018 Year In Review video.
ON THE COVER 23 Markham Road | Princeton, NJ 08540 $1,500,000
EACH OFFICE IS INDEPENDENTLY OWNED AND OPERATED. LISTINGS SUBJECT TO ERRORS, OMISSIONS, PRIOR SALE OR WITHDRAWAL WITHOUT NOTICE. STATISTICS SOURCE: BRIGHT MLS 1/18/2019. INFORMATION DEEMED RELIABLE BUT NOT GUARANTEED.