Given the extraordinary Princeton residential real estate pandemic-related market activity in the last two years, the September 2022 data that I am about to share is going to sound pretty remarkable. And like last month, I thought it would be helpful to provide years worth of data in order to include the last pre-pandemic year for better context and a richer analysis. So let’s get to it.
In September 2022, there were significantly fewer Units Listed (-23%), Units Pended (-23%), and Units Sold (-51%) compared to September 2021. Additionally, the September 2022 Average Sale Price (ASP) decreased (-5%) while the Days on Market (DOM) increased (+17%) over the same period last year. The decrease in the ASP and increase in the DOM probably doesn’t sound too surprising given the changing market dynamics.
When comparing the September 2022 data to September 2019, the analysis is somewhat similar. There were also fewer Units Listed (-36%), Units Pended (-13%), and Units Closed (-33%), BUT the ASP was higher (+6%) and the DOM was lower (-25%) in September 2022 compared to September 2019. In this case, the increase in the ASP and the decrease in the DOM comports when comparing September 2022 to September 2019.
What does this all mean? I believe that while September 2022 experienced the fewest Units Sold and Units Pended in the last four years, it also had the lowest amount of Units Listed and this lack of new inventory affected the number of contracts and closings.
What is causing the lack of inventory? One could argue the increase in interest rates is not just making it potentially more expensive for new buyers to purchase a house, but it is also making it less attractive for homeowners to move from their current homes. Many of these homeowners may have bought their property when rates were substantially lower and/or refinanced in the last two years when interest rates were at record lows.
Also notable in this transitional market is that even with higher interest rates, houses are still selling quicker and at a higher price than before the pandemic. Not only did the September 2022 ASP increase (+6%) compared to September 2019, the Median Sale Price experienced an +11% increase.
Now let’s take a deeper dive into the sales composition to see what can be learned. As noted by the chart below, the September 2022 sales composition was pretty similar to both September 2021 and September 2020. Compared to September 2019, there were materially more sold properties in the $1M-$2M price range which makes sense given the increase in both the ASP and MSP during the same period. As always, it is important to note that there are several sales that take place outside BrightMLS and are not captured in this data.
How is Princeton performing year-to-date (YTD)? Units Closed (-20%, 231 vs. 288), Units Listed (-18%, 315 vs. 385), and DOM (-27%, 35 vs. 48) all experienced a decrease compared to January-September 2021. The ASP (+5%, $1,245,849 vs. $1,181,209) and MSP (+10%, $1,100,000 vs. $999,999) both increased over the same period last year.
Now let’s compare January-September 2022 to January-September 2019. Year-to-date in 2022 Units Closed were effectively flat (0%, 231 vs. 230), while Units Listed (-21%, 315 vs. 397) and DOM (-53%, 35 vs. 74) experienced a decrease compared to the same period in 2019. The YTD 2022 ASP (+20%, $1,245,849 vs. $1,037,812) and MSP (+22%, $1,100,000 vs. $903,000) both increased over the same period in 2019. In other words, compared to pre-pandemic times, about the same number of properties sold at a remarkable pace and price with significantly less inventory.
So what is happening now? There are currently 51 Active Units between $409,200 and $8,500,000, 28 Active Under Contract Units between $859,000 and $12,000,000, and 19 Pending Units between $450,000 and $2,649,000. Lastly, of the 5 properties were introduced thus far in October, 4 are already under contract.