The Princeton residential real estate market is still strong despite the economic downturn.
By: George Frey
The Princeton area is known as a great place to live and the residential real estate market has and will continue to reflect that demand, according local real estate agents and local government officials. And the national economic downturn shows no sign of dampening the ever-increasing high price tag for the best homes in the area, especially since New Jersey’s unemployment rate is a low 4 percent.
"I’ve never seen a better market ever, in every single range of property value in Princeton," said Carol Caskey, the tax assessor for both Princeton Township and Princeton Borough. "We don’t have anything available because of the high demand in the area. We’ve seen more houses sell in the period from June 2000 to June 2001 than ever before. The volume and the prices are going up."
In fact, Ms. Caskey said, people are continuing to move to Princeton for its urban and bucolic feel. "They want to walk to town," she explained. "And they want to be here for that town feel. If you move to West Windsor, or wherever, you have to drive everywhere. The bottom half of the market has gone up as much as the top half. The whole thing is simply astounding."
As evidence of the demand for premium housing in the township and borough, Ms. Caskey pointed to the recent sale of a particular house in the borough. "This house sold for $824,900 five years ago," she said. "Now it’s doubled that at $1,615,000."
The upward trend in residential real estate prices is commonplace across the state, actually, with the majority of counties in both central and northern New Jersey seeing a sizable increase in housing costs. According to a recent story in the New York Times, every ZIP code in Mercer County saw an increase in the cost of residential property in 2000 of at least 4 percent to 8 percent. In particular, Princeton Township and Borough both saw an increase in the cost of residential properties from 8 to 12 percent, according to the Times. The National Association of Realtors also forecasts the national median existing home price for 2001 will increase by 4.7 percent over last year.
"There’s a lot of pressure, with Bristol-Myers Squibb, Johnson & Johnson, Dow Jones and Princeton University, just to name a few of the employers in the area. It’s a great place with great schools and it’s beautiful. A lot of the alumni want to live here, too," Ms. Caskey said. "A house in Princeton was and always will be a strong investment. You’ll get back at least what you’ve put in. I can’t predict the future, but that’s how it’s been for the past 20 years."
But, according to Heidi Hartmann, a sales associate with Coldwell Banker in Princeton, there has been a bit of a softening in the local real estate market, with offering prices being slightly reduced in the past few months. She also said recent efforts to preserve open space in the Princeton area could effect the residential real estate market slightly negatively in the short term. While she said she thought the idea of open space is great for a community, it is sometimes not so great for the housing market, which needs space to build new homes.
That lack of space also is partly to blame for the tear-down trend that is continuing to take hold in the Princeton area, in which purchasers of existing homes decide to tear them down and build a new home to their own specifications. This trend, which is commonplace in Los Angeles, has lead to the demolition of many beautiful old homes with rich histories there.
The open space debate coupled with continuing fears of a steeper economic downturn are contributing to the lowering of asking prices, especially in the $500,000 to $1 million and above houses, Ms. Hartmann said.
"We see some layoffs taking place now," she explained. "The notion of layoffs put a scare in the air, and people are starting to act more conservatively. The million dollar and above homes are still sitting on the market and we’re starting to see a reduction in some prices. People are saying to us, ‘The house hasn’t sold yet and it’s been 30 days,’ in which case, we say, ‘You should offer a reduction.’ Million-dollar houses were selling in a number of hours just a few months ago. If those types of houses are hit, you know there will be a trickle-down process in the rest of the price ranges."
However, Ms. Hartmann said the strongest market of all in the Princeton area is still the $500,000 and under range, which always seems to have enough buyers and has remained relatively unshaken by the economic turmoil. In particular, she said, townhouses and condominiums are selling like mad and the demand for these properties will continue.
Richard Weidel Jr., president of Weidel Realtors, a real estate mainstay in the Princeton area for many years, concurs with Ms. Hartmann’s assessment of the residential real estate in the Princeton area. "To those who have been watching its growth through the years, it comes as no surprise that land values in the Garden State are performing well above the national average," said Mr. Weidel, whose firm has offices in New Jersey and Pennsylvania. "This area is coming into its own and we forecast a strong market performance for many years to come. While a few markets in counties to the north and east have become saturated, the growth potential for home values in most other counties is still ripe."
Into the foreseeable future, everything seems to be coming up roses for the Princeton area residential real estate market. Only time will tell if the current economic climate will have any impact at all on lowering what are considered to be some of the highest residential real estate prices in New Jersey.