Monday, January 9, 2012

Year 2011 Market Analysis Report for Monthly Home Prices per square feet

Take a look at the volume graph above.  You can see the one bed room has the highest price per square feet on average.  One bedroom volume is considerably lower than 2 bedroom volume so one or two outlier transactions in a month can skew the results.  I like to look at 2 bedroom PPSQFT numbers because the transaction volume is the highest.  To understand how the PPSQFT is changing, the best thing to do is a regression analysis to run a line averaging out the change in PPSQT.  Or, we can look at absorption rate.  Going forward our weekly stats will look at this.

Absorption rate is the measurement of current active listings in the market divided by the number of listings sold in the last week.

A simpler way to express this is to say the number of weeks that the market will need for the foreseeable future.  As you can see in the table in week 1 of 2011, the market needed 189 weeks to sell all the active listings.  By the end of 2011 that was down to 13 weeks - unheard of.  When the inventory is so low, it puts pressure on prices which could explain the uptick in the PPSQFT for 2 bedrooms - the bedroom group that has enough transactions to be statistically significant.

We have 24 new listings in Hoboken since the beginning of the year.  By day 9 last year, we had nearly double that.  If inventory levels continue to ride at this low level prices will bid up.

On the start of year 2011 Price per square was normal but March, April and June 2011 are having highest prices per square feet for one bedroom. Prices of one bed room homes are declined considerably May through August 2011.  In Last quarter there was a mix trend for PPSQ.  Because I look at sales based on contract date, we'll report December sale PPSQFT in the Q1 report. 

This year, Prices per square for 2 bedroom units are almost equal to 1 bedroom on average. Year 2011 started with low price for 2 bedroom units and then in mid of the year (March, April and may) prices per square feet for 2 bedroom units were on peak. After that there was a down fall in prices of 2 bed room units. Which then started to grow steadily in the months of September. There is a huge increase in PPSQ in October and November 2011. November 2011 was highest PPSQ for 2 bedroom units on average. 

Price per square feet for 3 bedrooms swings during year 2011. There are so many ups and downs in prices.  This is due to the relatively low volume in terms of units.  Location within town, amenity and finish level differences in a small sample set can create these kinds of swings.  The months of May and June had the highest prices per square feet for 3 bedroom units. October and November were lowest PPSQ for 3 bedrooms on average.

Here is a chart for month to month price per square feet for home sales from Jan 2011 to December 2011

Information Provided by Donna Antonucci
Prudential Castle Point Realty

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