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Published in U.S. 1 Newspaper on April 5, 2000. All rights reserved.
Hot Market: 30 Days & Out
With its Ivy-clad colonials, high-end shops, and collegiate
attitude, Princeton has always been one of the most desirable towns
in Central New Jersey. Now Princeton’s cachet has literally gone through
the roof — homes here are selling almost overnight.
In Princeton Township recently, hungry homebuyers scooped up five
homes, with price tags between $250,000 and $400,000 before the broker
even had a chance to hold an open house. Not since the 1980s has the
real estate market been so hot. What’s fueling the market is not low
interest rates, but the low supply of new homes, in conjunction with
a population surge, says Pete Callaway, president of N.T. Callaway.
"The inventory is really low," he says. "In the market
that we’re in right now, if houses are priced properly they usually
are sold in 30 days."
The situation in Princeton illustrates the larger forces of economic
expansion, population growth, land shortage, and massive accumulation
of wealth that are reshaping New Jersey. Pharmaceutical and high-tech
companies already employ thousands of high-paid workers, and with
the building of two new corporate parks — one for RCN and one
for Merrill Lynch — homes have to be found for thousands of new
employees. "We are seeing quite a few people coming in with relocation
packages," says Callaway.
"We’re able to compete with other areas outside of Manhattan —
people who would look only at Greenwich or Long Island are coming
into Princeton, and because it’s a college town, are finding it a
very attractive place," says Pam Parsons, Callaway’s marketing
And, even in this frenzied market, Princeton still seems relatively
tame compared to other places — such as northern New Jersey. Burgdorff
ERA reports that its Montclair office recently listed a house for
$389,000 and received 12 competing offers on it before ultimately
selling it for $527,500. The Montclair office reports that in the
past year it typically received 5 to 12 offers on every house and
that its average list price to sale price was 100 percent. It’s so
competitive in northern New Jersey that Burgdorff has established
a set of written guidelines for handling multiple offers.
Fueling the sense of urgency is the fact that the pickings are slim.
"The building industry doesn’t have any spec housing out there,"
says Peter Blicher, president of the Central Jersey Home Builders
Association. "If you get the MLS (Multiple Listings) book for
Mercer County, measure it’s thickness, and get the book from one a
year ago, you see it’s almost half its size — that means half
as many homes on the market right now."
Low supply and high demand have obviously driven prices up. The April
issue of New Jersey Monthly listed the sale price for houses in 559
towns and the relative change over five and ten-year periods. At a
1999 average sale price of $417,637, Princeton Township showed the
highest home prices in Mercer County, roughly equivalent with affluent
Tewksbury in Hunterdon County. In Princeton Borough, the average 1999
sale price was $349,983, roughly 10 percent more than the sale price
in 1990. (By way of comparison, Trenton’s average sale price was $73,207
in 1999 — the lowest in Mercer County — while average prices
in North Jersey climbed to more than $900,000.)
Finally, the massive accumulation of wealth in this area is making
it easier for people to buy outrageously-priced homes. According to
researchers at the Rutgers Bloustein School of Public Policy and Planning,
Mercer County sits at the center of a strip of counties known as the
Wealth Belt — a place of burgeoning big homes, SUVs, and wealthy
families. Somerset, Middlesex, and Hunterdon counties are the fastest
growing counties in the wealth belt, which also includes Monmouth,
Morris, and Mercer counties.
For those who made money in stocks, this is a logical time for making
a real estate investment, says Callaway. "Interest rates started
to climb upwards so people began to feel it was time," says Callaway.
"Many people have been in the stock market and feel that it has
reached a plateau and it’s better to take some money out of stocks
and put it into real estate."
The cornerstone of the market is still the four bedroom, two and a
half bath home, but if you can find it, you’re lucky. "We’re all
looking very hard to find new listings," he says. "I think
the market will slow down just because we have low inventory. I don’t
see anything in the economy that says it’s coming to a screeching
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