This May Be the Right Time for You

With interest rates at historic lows this may be the opportune time for you and your family to consider purchasing a condo, townhouse or single family home.

 As I review the trends in the local real estate market I see a shift occurring from a buyer’s market to a seller’s market in the The Greater Princeton Area. So as a buyer what does this mean to you? A shift to a seller’s market means that you will have more qualified buyers competing to purchase the same home since a seller’s market is usually accompanied by low inventory. The TREND Multiple Listing System reports that in Mercer County in the month of June the number of single family homes available to purchase was 1920 compared to 2056 in June of 2015.  The number of single family homes settled (closed) June 2016 year-to-date is 1583 compared to 1327 year- to- date in June 2015. This may not seem significant to you but this small percentage change has made an impact in the number of homes available for you to purchase in Princeton and the surrounding area.  I frequently overhear in the office, real estate agents asking other agents if they have a new home coming on the market in a specific price range in a designated area for the buyer they are currently working with to purchase.  The agent and their prospective buyer have exhausted their search of the few homes that are currently available and are anxious to see any new inventory as soon as possible.  I myself have several customers that are experiencing firsthand the shortage of available homes to purchase. For you as a buyer, this shortage of inventory means that you must be working with a real estate agent that knows your wants and needs, have a letter of pre-qualification by a mortgage representative, have your deposit funds available, and have chosen your real estate attorney so you will be able to go immediately from fully executed contract to attorney review.

 As I review my daily “hot sheet” of available homes, homes under contract, pending and sold I see homes selling at list price or in some cases above the list price. Take note that homes in Princeton on average are selling at 18% above the  assessed value. Those homes that are selling over the assessed value are well maintained, updated, and are in a desirable location. This price shift from homes previously selling well below the list price is the effect of supply and demand. This may be the result of “baby boomers” deciding to age in place. Many “baby boomers” may be saying to themselves I can age in place, taking care of my home is manageable. If last winter had been sever we may be looking at a very different situation with more “baby boomers’ deciding to sell their home and move to a warmer more manageable or manage free housing environment. The lack of inventory may also be attributed to homeowners waiting to see if the real estate market improves to the point where they will be able to sell their home at a price that will meet their pricing goals.

This may be the time for you to get “your ducks in a row” and consider purchasing a home. Ask yourself the following questions to see if you are ready to take advantage of what may indeed be the approaching end to a buyer’s market.

• How long do you anticipate living in your new home?
• What are your mortgage pre-qualifications?
• What will the total cost of homeownership be? Consider the monthly mortgage payment, property taxes, homeowners insurance, utilities, homeowner association fees, special assessments, and the cost of maintenance.
• Do you have the available funds for the additional expenses of closing cost and moving.
• How much will your home ownership cost decline after adjusting for interest expense deductions and property taxes if applicable.
• Are home prices favorable to purchase?
• Do you qualify for any special mortgage program offerings?
• How does renting vs. buying affect your long-term investment goals?
• What are your personal preferences regarding the type of home you would like to live in?
• How does the location factor into your housing preferences?
• Where may your career take you?
• What are your long-term personal and financial goals for your housing?

Now is the time to seriously consider your homeownership options.