Price Appreciation Continues Due to Low Inventory: May and the Princeton Residential Real Estate Market

Posted on by syltrow

May 2023 experienced the same Unit Sales (26 vs. 26) and a +33% increase in Units Pended (28 vs. 21) compared to May 2022, despite having -11% fewer listings (32 vs. 36). The Days on Market (DOM), while higher than last May (22), was still only 35 days; less than half of the time it took to sell a house pre-pandemic. Given the aforementioned data, it’s unsurprising that the Average Sale Price (ASP) materially increased (+37%) compared to May 2022. In other words, the consistent buyer demand and the lack of supply are putting upward pressure on the ASP.

At first glance, the ASP increase seems incredible and after taking a deeper dive into the data, a couple of themes emerge. First, the sales composition relative to last year is completely different. In May 2022, more sales occurred in the  $1M-$2M (65.4% vs. 42%) and +$2M (19.2% vs. 8%) price points compared to May 2023. Second, the highest sale this May was $4,100,000 compared to $3,025,000. The major shift in sales from the under $1M price range to the $1M-$2M and +$2M price ranges contributed to the significant increase in the ASP.

How is Princeton performing year-to-date (YTD)? Units Sold (-36%) and Units Listed both decreased while DOM remained flat (43 vs. 43) compared to January-May 2022. As for January-April 2023 versus January-May 2019 (pre-pandemic), Units Sold (-18%), Units Listed (-46%), and DOM (-50%) all decreased. The number of Units Sold is  remarkable given the current inventory levels.

The January-May 2023 ASP (+22%) and MSP (+27%) increased compared to January-May 2022 because of the shift in the composition of sales from Under $1M to the $1M-$2M and over $2M price ranges. Relative to January-May 2019, the January-May 2023 ASP and MSP increased +46% and +44% respectively for the same reason. Please note the BrightMLS data I share only includes properties sold via BrightMLS. Every year there are sales that occur outside BrightMLS and the information associated with these off-market sales are not included in my data – both for consistency and in order to present timely information The year-to-date, 2023 ASP and MSP are the highest they have been the last 5 years.

So what does this all mean? During transitional markets, there are some constants. A well-priced home in a good location and in move-in condition will sell quickly and for a premium. Other properties that don’t necessarily tick all the boxes that current buyers are seeking, may take a bit longer and sell for at or slightly below asking price (YTD on average properties have sold for 98% of their original asking price). While we are still seeing properties sell faster than in prior years, opportunities for buyers continue to emerge. 

So what is happening now? There are currently 46 Active Units between $599,900 and $8,500,000, 19 Active Under Contract Units between $600,000 and $12,000,000, and 29 Pending Units between $499,900 and $2,750,000 in Princeton. Lastly, 2 properties were introduced thus far in June and one is already pending. 

What will June bring? June could be another busy month as buyers who want to be in their new homes by the fall decide to move forward with a purchase. 

As always, if you are thinking about buying or selling your home or want to learn more about Princeton area real estate market statistics, feel free to email us! Sig & Syl