Archive for March, 2007

A Big Thanks!

Thanks to all who supported the Best of Branchburg awards dinner this past Saturday evening at Fox Hollow! Not only did we have a great time, but it was a terrific kick-off for the TRIMA Machine fund drive. A special thanks goes to Priscilla Brown and her students from Branchburg Central School for the superb mock-up of the machine and the presentation explaining its importance to Somerset Medical Center and the Steeplechase Cancer Center.

Branchburg residents should now be receiving brochures containing info on how to donate. Please help us with this worthy and life-saving cause!

You can also donate and get more information at www.trimamachinedrive.org (link is to the right, under “Blogroll”).

February, 2007 Branchburg Closed Sales Stats

The following table contains closed residential real estate transactions in Branchburg for February, 2007. However, unlike the inaccurate information promulgated by most agents and media sources, the “DOM” (Days on Market) column indicates the sum of days-on-market accrued through serial listings of the same home (it is a common agent “trick” to withdraw and re-list a home, in order to create the public impression of a “fresh” home that has seen fewer days on market). In addition, the “OLP” (Original List Price) column reflects the list price of each home at the time it was first offered for sale.

Sales statistics posted at Branchblog will always be cross-checked to provide the most accurate and unbiased housing market snapshot possible.

Please direct specific inquiries to Chip Hughes at (908) 334-2329 or chip.hughes@att.net. Better yet, leave a comment!

All information is deemed accurate, but not guaranteed, and is provided courtesy of Garden State Multiple Listing System:

Address OLP Sale Price % of OLP DOM
44 Kingswood Rd 269,000 272,500 99 44
1 N Branch River Rd 419,000 361,000 86 175
64 Robbins Rd 429,900 385,000 90 276
464 Pleasant Run Rd 450,000 300,000 75 103
126 Choctaw Ridge Rd 414,500 388,000 94 68
18 Sharon Av 485,018 410,000 85 255
207 Bernard St 419,900 391,000 93 118
633 Snowbird Wy 529,000 468,000 88 296
94 Vollers Dr 514,900 514,900 100 74
5 Bridle Wy 899,900 790,000 88 308
1 Meadow View Ct 1,300,000 1,137,500 88 385

AVERAGES: 187 Days-on-Market; SALE PRICE 90% of original list price.

An Eerie Voice From the Past

I was reminded of this gem of financial analysis today…it comes from Bill Gross, the “King of Bonds”, at Pimco. Try to guess when this was written…you’ll be amazed:

Pimco Fed watcher Paul McCulley quotes some intriguing insight from his boss, bond guru Bill Gross, into how the housing market works …

“The Plankton Theory, like life itself, begins and ends in the ocean. Plankton, of course, are almost microscopic organisms that serve as food for higher life forms. Without plankton almost every fish and mammal in the sea could not survive, since most species depend upon other fish for their existence and plankton are the initial building blocks of the entire process. Logic would suggest, therefore, that in attempting to forecast the well being of the Great White Whale, Jaws, or even Jaws II, that one of the factors to consider would be the status and future outlook of the plankton. That, in one hundred words or less, is the Plankton Theory.

Now, what possible significance could this have for the investment world? Plenty. Take for example, the area of real estate, especially that of single family housing. We’re all familiar with the rapid escalation of home prices over the last 10 years. For most Americans, their homes have been the best and in many cases the only investment that they have made in their entire lives. Some have gone so far as to invest in several homes and have endured ‘negative carry’ on the cash flow in anticipation of leveraged capital gains a few years down the road. But where does it stop? Can housing continue to increase at twice the Consumer Price Index for the next 10 years?

One way to measure might be via the Plankton Theory. In the case of real estate, the plankton would be the first-time buyer (perhaps a young married couple) with a desire to own their own home but with very little capital to carry it off. When the time comes that they can’t pull it off – either through an inability to come up with a down payment, or to service the monthly mortgage – then the ‘plankton’ would disappear and the rapid escalation in housing prices would ease as well. For, unless the current homeowner has someone to sell his house to, he’ll be unable to afford the house with the view or that extra bedroom, and the process would continue into the echelons of Beverly Hills and Shaker Heights. In the end, the entire market would wither on the investment vine and home prices would stop increasing at the same rapid rate. So to gauge the health of the housing market, look first at the plankton. Without their presence and financial vitality, the market’s not going to repeat the experience of the past 10 years.”

Gross wrote that in August 1980.