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These articles were prepared for the May 11, 2005 issue of U.S. 1
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Today, Small Houses are Big Sellers
Asked for a recent home sale that surprised her, real estate agent
Robin Gottfried hesitated – there is so much that is surprising in
this overheated real estate market. "Okay," she says, choosing an
example. "There was a townhome in Princeton Walk. It was in perfect
condition, but it backed up to a busy road." A few years ago the home
might have languished. But not now, not in the spring of 2005. "It
drew 15 offers," says the agent, who works with Coldwell Banker in
That is the story of the real estate market as it kicks into high gear
for the spring selling season. Its themes include incredibly tight
supply, rapidly rising prices, rapidly decreasing interest in lawns,
investors on the prowl, immigrants from both Latin America and tony
towns in North Jersey yearning to find homes in central New Jersey,
and, yes, the rise of the townhouse as a major object of desire.
Joining townhouses in the smug role of real estate star are condos.
There was a time, way back in the late 1980s and early 1990s, when
demand for these units was so low that developers resorted to auctions
to unload them. They were considered ugly stepsisters to the Holy
Grail of housing – the single family home, preferably with outsized
garage and lots and lots of land. Those single family homes are still
in demand – and the object of frequent bidding wars – but they now
share the spotlight with their land-poor brethren, the townhouse and
No matter what the home type, however, when its owner decides to put
it on the market, it is going to get lots of looks.
‘There is a shortage of houses compared to an oversupply of buyers,"
says Gottfried. "All prices ranges are moving fast. Under $1 million
is moving very fast."
From Princeton to Trenton, the story is the same. There are just not
enough homes to go around. "People are desperate for houses," says
Anna Shulkina, an agent with Weichert’s Princeton Junction office.
"The supply is so low." This is so, in no small part, she says,
because central New Jersey is a one-of-a-kind place. "This is a unique
situation," she says. "It’s become a suburb of both New York and
"In Lawrence anything in the $200,000s and $300,000s goes right away,"
says Mike Richman of Weidel’s Lawrenceville office. And it’s not a lot
easier to get in at the higher end. "We have someone now who wants to
spend $800,000 to $900,000 in the village of Lawrenceville," he says.
"It’s hard to find, but we’re working with him." Large homes within an
easy walk of the village’s shops and restaurants can now command a
couple of hundred thousand dollars more than the couple want to spend
– if such a home can even be found.
Hunting is not any easier in West Windsor. "I have to steel people,"
says Bernard Smolowitz, a broker/partner with Keller Williams. "Single
family homes in move-in condition with four bedrooms in the $400,000
to $500,000 range are virtually non-existent. Good houses go in days,
with multiple bids."
Frances LaPera, an agent with Century 21 in Hamilton, reports that "in
the price range of $300,000 to $400,000, there is nothing out there."
She has been in the business for 12 years, and says "this is the
hottest market. If you price right, a house will sell within hours."
If the house is in Princeton, it will sell even if it has attributes
considered liabilities in other towns. "The borough is still much in
demand," says Gottfried. "If they want to walk to town, they’re
willing to overlook age, parking, etc. They will make sacrifices."
Shulkina talks about a small house on Pine Street in the Borough that
was in "huge disrepair." It came on the market at $250,000.
Immediately there was a bidding war. "My client stopped at $35,000
above asking price," she says. He was a builder, able to do the
repairs himself. But someone wanted the handyman’s special more than
he did. "It went for more than $100,000 over asking price," says
Shulkina, adding, "that’s not unusual for Princeton."
The same situation prevails in older sections of Princeton Township,
where buyers hesitate not one second before fighting over 1950s split
levels with one-car garages.
Supply is an acute problem in Trenton, too. "There are no houses for
sale in Hiltonia’s inner streets," says Bill Harbach, an agent with
Doolan Realty. A large middle class neighborhood of Tudor and Colonial
homes, Hiltonia is one of Trenton’s most prominent neighborhoods, but
the city’s shortage of housing inventory is not limited to its leafy
streets. "There are six houses available in Glen Afton," he says,
naming another desirable neighborhood, "but three are under contract."
It’s the same in all of the Trenton areas that draw commuters. The
azaleas, lilacs, and tulips are in full flower, but "for sale" signs
are just not coming out to join them.
Like Shulkina, his counterpart in West Windsor, Harbach sees Trenton’s
location vis-a-vis the major cities at its borders as one reason that
house hunters are snapping up anything with four walls. "We had a
Westfield couple, New York City commuters," he recounts. "They could
not afford anything in Westfield, and they discovered that this is an
easier commute. We recently closed on one Glen Afton couple who came
from Chicago. He’s working in New York, and she’s working in Philly."
As he talks about other sales, he mentions families from California
and from Florida. In addition to an easy commute, the newcomers are
attracted to the city’s value. "You cannot find $275,000 brick
Georgians in other towns," he declares.
"We have buyers waiting for the right house," says Harbach. "They come
up, and they go."
‘Appreciation is 1 1/2 percent a month for townhouses," says Shulkina.
"For single family houses, it’s $50,000 to $60,000." She gives a
recent sale as an example: "I just sold a townhouse in Princeton
Landing for $650,000. A month later, the same model came on for
$699,000, and it sold above listing price. My client bid more than
$700,000, and lost it."
The prices vary from town to town, generally going down in direct
proportion to distance from Nassau Street. Yet throughout central New
Jersey, the trend is up – way up.
In Trenton, Harbach reports that a Hiltonia house went for $309,000 in
February, 2004. Its new owners quickly decided that the large house
was too much home for them, and they put it back on the market in
October, and it promptly sold for $335,000. While this house was a
relatively modest 1950s Colonial, Harbach himself owns a 1938 Tudor
revival. He paid $112,500 for it in 1982, a record high in the city at
the time. He guesses the house would now fetch a price "in the
Just up the road, in Hamilton, prices are also soaring – so much so
that at least one real estate agent is astounded. "People are getting
their prices, but a few are ridiculous!" declares Derek Malbone of
ActionUSA Jay Roberts. "A four-bedroom Colonial in a top, premier
section sells for close to $500,000 – even over," he says. "That’s
maybe 50 percent over three or four years ago." He paid $189,000 for
his three-bedroom ranch in the Briar Manor development three years
ago. Until recently he thought that if he were to sell, he would ask
$425,000. But now he is revising upward because a neighbor just put a
house on the market for $483,000. "Mine," he says, "is twice as big."
A real estate agent in East Windsor, who did not want his name used
because he says it is against corporate policy for individual agents
to give interviews, reports that prices in and around that township
are "up 30 percent in one year." Four bedroom Colonials now sell in
the $500,000 to $600,000 range. "I had somebody walk into my office
looking for a house for $500,000," he says. Even at that price the
buyer could not find the size and amenities he was looking for. "I
ended up selling him an $800,000 house in Millstone," says the agent.
Like every other agent, he reports rampant bidding wars. "Some
surprise even the realtors," he says. "I can’t believe the prices."
While sellers rejoice, many potential buyers weep. Yvonne Hammond, of
Gloria Nilson’s Princeton Junction office, talks about one such
casualty of the hot real estate market. "This weekend I had a woman
who wanted to spend $450,000 on a house in West Windsor." The house
hunter specified that she wanted four bedrooms and did not want to
look at houses that were more than five years old. "It’s not
happening!" says Hammond. "Not even in townhouses."
Houses are easier on the pocketbook in Ewing, where Robert Koch of
Burgdorff ERA’s Princeton office says that a three or four bedroom
home in the northern part of the town can be had for $300,000 to
$400,000. That is more than the house would have cost a year ago, but
still less than its West Windsor equivalent, which he puts at about
Still, even at half the price of a West Windsor house, the sticker for
a home in Ewing can induce shock. "I have people moving from the
Midwest," says Koch. "They say ‘I could have bought three houses in
Ohio for this price!’"
And what would the Ohio emigres think of the price for a small
attached house on Bank Street in Princeton Borough? A small, older
house, with tiny closets and no driveway, let alone a garage, the
house just sold for over $500,000, according to Gottfried of Coldwell
There are many reasons for a shortage of houses and for price jumps.
Several agents cite low interest rates. At the current rate of 6
percent or so, the payments for a mortgage on a $500,000 house are
less than half of what they would have been in the mid-1980s, when
mortgages rates hovered at 13 percent, a one-third of what they were
at the late-1970s rate of 18 percent. A plethora of new mortgage
products – including interest-only loans and 107 percent mortgages –
also bring pricier homes into range for more buyers.
Another big factor right now is pressure from the north. Any number of
agents cite $800,000 as an entry-level price just 30 to 45 minutes
north of the Princeton area. And yet, as they point out, commuting
time can actually be less from Princeton Junction or Trenton, which
offer a straight shot into the city – no need to change trains – as
well as a number of Amtrak trains, which make few stops and can reach
Penn Station in well under an hour.
But perhaps the biggest driver of quick sales and high prices is
"I have tons of buyers who have lost out three, four, seven times,"
says Weichert’s Shulkina. "Every transaction is like a war." One of
her clients badly wanted a newly-listed home in Princeton Landing. "He
went well above asking price," she says. "He even waived mortgage
contingency, but he did not get it."
Every time a bidder loses out, he, along with the other five, 10, or
15 other losing bidders, becomes more desperate. "Only one person gets
the house," Shulkina points out. The result is that when the next
similar house comes up, it commands an extra $10,000, $20,000, or
$50,000, as the disappointed bidders join newcomers to the market.
"It’s a vicious circle," she says. "It’s very stressful for everyone."
Like other agents, Shulkina tries to prepare her clients for battle.
She tells them that it is imperative to be completely pre-approved for
a mortgage. Other factors that can give their story a happy ending
include a big down payment and flexibility. The out-sized down payment
assures the seller that they will follow through with the deal.
Flexibility means that under no circumstances will they demand that
the drapes stay and that they will try, as far as possible, to
accommodate the sellers’ terms as far as a closing date is concerned.
Buyers want the best possible price, but they often want peace of mind
Joan Eisenberg of ReMax Greater Princeton tells the story of a sale
where the buyer rejected a bid that was $30,000 above asking price,
and went with one that was $15,000 above asking price. The lower
bidder was willing to give the seller time to move, while the higher
bidder was insisting on moving in right away. "It’s not just about
price," she says.
"Townhouses have been the story for the last eight months," says
Coldwell Banker’s Gottfried. This observation is repeated again and
again. Whether the townhouse is 30 years old or brand new, part of a
huge development or grouped with just a few others – it is a real
Smolowitz, of Keller Williams, says that "two days ago, two townhomes
in the Brittany development went for asking price." The first sold for
$395,000, and the second sold for $429,00. Prices are even higher at
the nearby Estates of Princeton Junction. "The last townhouse I sold
there went for $500,000," he says, "and now there’s one for sale
there for $530,000."
In the Twin Rivers section of East Windsor, townhouses built in the
early 1970s, which had been treading water just above the $100,000
mark for years, have shot up to closer to $300,000.
In Trenton’s Mill Hill section, which is a short walk from the train
station, historic townhouses "have broken the $300,000 barrier," says
Harbach of Doolan Realty. Just a decade ago, these houses, even when
fully renovated and upgraded, had trouble drawing offers for one-third
of that amount.
In Hamilton, Malbone of ActionUSA reports that prices for townhouses
are up an average of some $50,000 in three years. The popularity of
these homes, in his opinion, has to do with their ease of upkeep.
"People don’t want to deal with maintenance," he says.
That is true for Weidel’s Richman. An owner of the Princeton Car Wash
in addition to being a busy real estate agent, he bought a townhouse
in Lawrence’s Woodmont development two years ago. "I didn’t want to do
all that weeding," he says. "I have limited time. It’s perfect for my
He looked for a year before finding the perfect townhouse, and
emphasizes that, as far as space and amenities are concerned, it is
anything but a step down from a single-family home. Just the same, he
is still a little surprised at how much he enjoys townhouse living.
"My father was born in Brooklyn," he says. For his father, and then
for him, the drive was to get away from pavement and any sort of
communal living arrangements and to achieve a stand-alone house
surrounded by an ocean of lawn.
"But priorities change," he says. "This way I have more time for my
children and grandkids."
Richman is far from alone in discovering the pluses of townhouse
"Keeping up a property can be a problem," says Coldwell Banker’s
Gottfried. She sees buyers who says "’on the weekend we want to run;
we don’t want yard care.’" For many of these busy people – of all ages
– the townhouse is a perfect place to live.
"It’s in the middle," Gottfried observes. "It appeals to people who
are sizing up from a condo, or down from a big house."
A cousin to the townhouse, the condo, which often comes with even less
maintenance, is also doing well. It is sometimes the only shot at home
ownership for first time buyers in this frenzied real estate market,
and also appeals to anyone who wants to be able to just turn the key
and go on a two-week vacation or head to a winter retreat in Florida
with no worries.
Richman’s daughter bought one in Lawrence three years ago, when she
was just starting out in her career, for $96,000. Now married, she has
moved on to a single family home, but is keeping the condo as an
investment. "It’s now worth $170,000 to $175,00," says Richman.
Meanwhile, condos in Canal Pointe, where unsold units were auctioned
off a decade or so ago, are now sought after. Two-bedroom condos there
are now selling for upwards of $250,000.
There was a time, not all that long ago, when new homeowners would be
sure to mention their lot size. It was a matter of pride to announce
that the new home was on half-an-acre. Often the acreage was the first
attribute that was mentioned. Always, it was prized. A Cape on
one-third of an acre was more valuable than a similar house on a
Now it’s all about the town first, and the house second. Land, an
American obsession even before Washington rode through downtown
Princeton, is now a ho-hum attribute at best, and is often seen as a
"The demographics have changed since the 1950s," says Derek Bridger, a
land use development specialist in Princeton Borough. "Most people
here are professionals. They don’t have time to mow lawns." Speaking
of Princeton, he says, "it’s almost an urban-type town."
Real estate agents throughout the area agree that a big lot is just
not on most buyers’ wish lists. What these house hunters want is,
well, house – and plenty of it. Fulfilling that request isn’t too much
of a problem in West Windsor or Hopewell Township or Hamilton, where
there are 4,000 and 5,000 square-foot homes aplenty.
Princeton, and especially Princeton Borough, is another story. "In the
eastern section," says Bridger, "we have 1,500-square-foot houses, and
people today want a bigger house." Even in the western section of
town, in the vicinity of Library Place, for example, homes that seemed
more than ample a decade ago no longer look big enough to buyers
intent on having master suites, exercise areas, media rooms, and
The result has been a bulking up that has produced houses that some
consider wildly over-sized for their lots. "We’ve gotten complaints
from every part of town," says Bridger.
As a result, for the past year Princeton Borough has been considering
regulations that would put limits on how much house can be shoehorned
onto a lot.
A house on a 20,000-square-foot lot in the western section of town can
occupy 25 percent of the lot, says Bridger. "But you can go up three
stories," he adds. "That could be a 15,000-square-foot house. People
feel that is too much." But not everyone has a problem with houses
that dwarf their neighbors. "Some people don’t think that there should
be any constraints on what they can do with their property," says
What a number of developers are doing with their property in
Princeton, he says, is making a good deal of money. "A small single
family house will sell for $500,000 now," he says. "You can tear it
down and build two attached houses, and sell each for $750,000 to
The proposed curbs would probably put an end to this type of building.
Whatever Princeton decides, the issue illustrates a major shift in
priorities. Given their druthers, it appears, home owners would far
rather have more walk-in closets, and fewer tussles with dandelions.
First time buyers are all but shut out. Move-up buyers, even those
sitting on a pile of equity, are suck in place by inflated prices.
"People are desperate for houses," says Shulkina. "Supply is so low.
We’re a focal point in New Jersey because of the schools, the
transportation, the pull of Princeton. This is some unique situation!
There is no bubble bursting here."
Like most other real estate agents, the folks who are out there every
day, pricing and selling homes, she sees no end to the frenzy.
Richman doesn’t see an end either, but he is growing uneasy about the
pace of price inflation. "I don’t think this can go on forever," he
says, but he doesn’t see an abrupt halt on the horizon. "I think there
will be a gradual slow-down," he predicts. And, he, for one, is ready.
"Some people are totally priced out," he says. "We need a break."
‘There are bidding wars all over the place," says Joan Eisenberg, a
broker with ReMax Greater Princeton. Hearing this, people about to put
their homes on the market may be tempted to do a happy dance, and then
proceed to slap a price befitting the toniest sections of Beverly
Hills onto their four-bedroom central Jersey Colonial.
Bad idea, cautions Eisenberg. "People will stretch to buy a houses,"
she says, "but not if it’s overpriced. Pricing a house right is
"In 15 years of selling real estate," she declares, "no one has not
asked how long the property has been on the market. No one!
When a potential buyer hears that the house was listed seven minutes
before he arrived, his competitive instincts tend to go into
overdrive. That is especially so in this market, where tales of epic
bidding wars are heard in every supermarket aisle, and on every soccer
field. That "I’ve go to have it" mindset continues for more than
seven minutes, but does wane as one week turns to two weeks, and two
weeks turns into a month.
Early on, the buyer is likely to think "I have to jump in before
everyone else does," says Eisenberg. The upshot, she says, is that
"they’ll bid more aggressively."
As time goes on, however, potential buyers sense weakness. They begin
to wonder why the house hasn’t been snapped up. They imagine an
increasingly nervous seller. They entertain the idea of submitting a
"Early offers are the best offers," Eisenberg finds – again and again.
While perfect pitch in pricing is essential to generating those early
offers, the appearance of the house is important too. Yes, it most
definitely is a buyer’s market. But, no, says Eisenberg, that does not
mean that buyers can relax, leave a stack of dishes in the sink, and
just let the aging wallpaper sag where it will.
For a top price, and a quick sale, a house has to sparkle.
"De-clutter, organize," advises Eisenberg. "If closets are jam packed,
buyers will assume there is not sufficient storage space." If
organization and donations to the Salvation Army aren’t enough to
winnow the overflow, consider renting storage space.
With the family photos stowed – to allow potential buyers to imagine
their own children’s portraits on the walls – start to work on
creating a neutral palette. Re-paint any orange walls; replace any
purple carpet. Again, the idea is to create a stage set that frees
buyers to envision themselves, and their belongings, in the house.
Major renovation probably is not a good idea; buyers will want to make
their own big changes. But Eisenberg says it can pay to upgrade the
room in which every buyer is most interested – the kitchen. Don’t
spend a fortune, but if the appliances are harvest gold or avocado,
consider replacing them with a more up-to-date color – perhaps white.
"Don’t get top of the line," says Eisenberg. Even a new low-end
appliance in a modern color can make a huge difference.
Consider other relatively low-cost kitchen upgrades as well, she
suggests. Perhaps a new floor, a coat of paint for aging cabinet
doors, or new countertops. Pay close attention to bathrooms, too,
because potential buyers do. A new vanity can be inexpensive. It costs
relatively little to resurface a bathtub. And a new shower curtain and
new towels can be had for every little money. These low-cost cosmetic
changes can yield big rewards.
When all the de-cluttering and sprucing up is complete, there is just
one more step. "The house must be clean!" says Eisenberg.
Sellers who follow the advice will get top price in record time, and
will, therefore, be able to relax a little. Freed from the fear that a
potential buyer will turn up at the worst possible moment, they can
leave a dish or two in the sink, stop snapping at the kids to put away
their baseball cleats the second they walk in, and release the family
pets from the basement.
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