Cranbury home $539,900 (Station Rd.; reduced; gone)

[Guest]

$580,000
3 Bed, 2.5 Bath
0.27 Acres (11,761 Sq Ft Lot)
MLS #5656856

* Single Family Property
* Subdivision: Historic District
* Age: 157 year(s) old
* New construction
* 3 total bedroom(s)
* 2.5 total bath(s)
* 2 total full bath(s)
* 1 total half bath(s)
* 7 total rooms
* Two story
* Type: Detached
* Style: Colonial
* Master bedroom
* Living room
* Dining room
* Family room
* Kitchen
* Basement
* Laundry room
* Bathroom(s) on main floor
* Master bedroom is 17x11
* Living room is 19x17
* Dining room is 17x10
* Kitchen is 15x16
* Basement is Partial, Unfinished
* Laundry room is 9 x 9
* Hardwood floors
* Fireplace features: Non Function Fireplace

* Parking space(s): 2
* 2 car garage
* Parking features: Detached, Garage Door Opener, Oversized Garage
* Heating features: Gas, Zoned
* Forced air heat
* Central air conditioning
* Inclusions: Disposal, Kitchen Cook Top, Kitchen Double Sink, Kitchen Island, Oven-Self Cleaning
* Exterior construction: Vinyl Siding, Concrete Foundation, Stone Foundation
* Roofing: Pitched Roof
* Approximate lot is 75X156
* Approximately 0.27 acre(s)
* Existing Structures: Shed
* Utilities present: Public, Public Sewer

http://www.realtor.com/realestateandhomes-detail/9-Station-Rd_Cranbury_NJ_08512_1116006382

[Guest]

new price: $559,900.

[Guest]

new price: $539,900.

[Guest]

Looks like this house is sold too!

[Guest]

All the recent sales aren’t surprising in that we are at the start of the annual season for our market, which always picks up substantially in the late spring and summer. Most of the recent sales have been of homes that have been on the market a long time, usually since last year. So what we’re saying is sellers that either didn’t get activity before or turned down initial offers and after a slow winter were motivated to make a deal when activity picked up, as it seasonally does. What’s telling is how far below original asking price a majority recent sales have been, usually hundreds-of-thousands and 20-40%.

None of this is surprising and seems consistent with the broader state of the market. Overall it’s healthy. The only surprising thing is how so many of the new sellers seem to be either completely obvious to these comps or continue to fall into the tap of believing their house is somehow exempt from it and should still command market-high record-setting prices. Either they aren’t really sellers or we’ll see them selling next spring for a lot less. And the cycle continues…

[Guest]

[Guest]

The problem with comps in Cranbury is many homes are not updated and once a home sells you have no idea if it was updated or not. So if you have one home sell with a 1960's kitchen and pink bath for 500K and then you have a completely re-done home go up for a sale a month later you're looking at a comp of 500k, but not comparing apple to apple homes.

When we sold we were higher than our neighbors had sold for, but we also had their sale sheets so people coming through could see the comparison of homes. We sold within 6 weeks and then found a home here in Cranbury.

[Guest]

[Guest]

I didn't sell in Cranbury, but bought here. However, my town had gone through a re-assessment and had similar issues in terms of market and value, I lived in Mercer County. I sold for 20,000 above my assessed value, not a lot higher but still a little higher. I doubt I could get the same price today and my home had a lot of upgrades that are not factored in the tax assessed value of a home.

[Guest]

It's fine to surmise based on instinct or indirect anecdotal experience that a house here would sell at prices equivalent or better than historic highs and far above Summer 2006 assessment prices as many people are listing them now. In theory there may be a house here or there that does. But we know for a fact this isn’t happening a vast majority of the time because we have a several years of solid data on how long houses in Cranbury are taking to sell, what price they are selling for relative to their previous highs and to assessment prices (why do you think our taxes went up despite the school and municipal budgets being cut – because our tax assessment base is shrinking in value). Among those sales are numerous houses that are immaculate inside with spectacular upgrades inside and out, often at a cost of hundreds-of-thousands. Not even included in these stats are many other incredible homes that took themselves off the market because they couldn’t find buyers at their perceived value. Take a look at the records and you would be surprised how many times that has happened in the last several years here. In most cases it helps a little to have well done upgrades, but only a small fraction relative to the cost of those upgrades. We know on average that house prices are down approximately 10% in Cranbury, and approximately 20% for homes over $1 million. This is relative to previous actual sale prices. In some cases people are listing homes above any previous realistic basis for a sale, so their ask is much higher even than this market basis making the gap even larger.

Every house is different but people have a tendency to over-estimate how much the market values the differences of their homes. Realtors like to joke among themselves about how people think their homes are made with golden bricks. Of course they believe it is special – they picked it, they have an emotional basis in the work that was done to it and they are used to everyone they invite into their home telling them how great it is. The reality is given that this is most people’s biggest investments in their lives, even emotional buyers tend to treat purchases very carefully. They look with more dispassionate eyes than the sellers at the relative value versus what else is available and what is the value of the neighborhood. In the seller’s market of the 1990’s through 2006, people sometimes accepted a premium for a house they liked figuring rising values would soon catch up with the premium they paid and still justify their value. But very few people in the current buyer’s market will pay a substantial premium for a home over the value of the surrounding neighborhood regardless of the reason for the premium, whether it is extra square footage or upgrades, etc. This is one reason the sale cost-per-foot of a house diminishes with size. Remember, the average person keeps a house for 7 years. With home prices expected to stabilize sometimes next year, based on the most optimist projections, to a historic pace of 2-3% inflation a year, it is a much larger gamble to pay a premium for a house due to upgrades, especially when the perceived value of those upgrades have approximately a 10 year shelf life from their installation (i.e. that spectacular new kitchen will no longer be perceived as new by the market after a decade or so, on average).

The bottom line is many home sellers and home owners who track the self-perceived value of their homes tend to not do so rationally since the unprecedented boom of the ‘90’s and beyond. They may visit open houses and track their neighbor’s comps, but then they ignore most of these facts in favor of their own assumptions. I have heard seller’s justify their self-assessed ask price, for example, by saying they can’t sell below X because they would be taking a loss. I point out that they actually bought for hundreds-of-thousands below X and they say, “well, yes, but so-and-so’s house sold (in 2005) for Y and mine is better than hers for all these reasons so mine must be worth X and anything less is a loss.” Or they do the math on the cost of their upgrades, add it to their purchase price and define a loss that way, which is completely irrelevant to the fair market value. On average, nationally, upgrades are worth approximately 20-30% of what you put into them, varying substantially based on what the upgrade is, how well it was done and how it compares with the average standard of the neighborhood. And this average was true during the seller’s market; historically it is less during a buyer’s market. Pools, for example, are on average worth $0 to a sale price. That is a statistical fact, with exceptions obviously.

As others have said, people have the right to ask whatever price they want for their home. And home owners eager to perceive their own values as higher are entitled to believe it. There will always be some realtors hungry enough to accommodate them and even enable them by pretending they agree even if they don’t. I just wouldn’t mistake that for reality. The facts don’t back it up. Of course even someone reading it and agreeing with it in general will still assume it doesn’t apply to their house.