Monday, July 8, 2013

Q2 2013 Review - Hoboken Real Estate Review - Where is the Market Going?

The Hoboken's second quarter Review is here. There were 300 closings during Q2 2013. This includes condos and 1-4 families sales. 

I like to look at price per square foot by contract date. The price per square foot by contract date is a more accurate depiction of pricing because it's the contract date where the buyer and the seller have come together and agreed on a price of a specific property. It takes 4 to 8 weeks to close depending on whether it's a cash deal and how unique the property is. That is, a 1-4 family, generally, takes more due diligence than a condo.

There are a variety of reasons why a closing may take longer than this. One typical reason why the time from contract to closing takes longer than this 6-8 week period is because the unit goes under contract in pre-construction. A property sold in pre-construction can remain under contract for 6-8 months or even more. Because the decision point to buy and the agreed upon price were made so far in advance of the closing, the price is not necessarily a reflection of pricing at that time of the closing.

As shown in above chart, The price per square foot for a 3 bedroom condo started from $545 in the month of April was lowest and highest in May at $577. During last quarter, the Price per square foot for a 3 bedroom condo shows the upward trend in property prices. March was the highest at $635 in Q1 but again the Price per square foot for a 3 bedroom condo went down at $545 in the month of April and shown a bit of appreciation in May. The average 2 bedroom over the period was 1,145 square feet sold at the average Price Per Square Foot (PPSQFT) of $528 which is higher by $33 from last quarter.  In April, the average 2 bedroom went for $606,093, $579,006 in May, and $630,963 in June. Quarter high for 2 Bedroom was at $630,963 in June.

Although small numbers, the 3 bedroom category is in high demand among the buyers.  I have several clients looking for 3 bedrooms and I can tell you it's very difficult.  Listings are going at highest and best within days of hitting the market like no other segment.  There just is not enough 3 bedrooms as more and more people want to stay in this area instead of taking on a long commute from the burbs. 

I also want to point out, that the durations shown here is the contract date minus the listing date, however, most agents put in the date that attorney review closes, not the date the initial contract is signed by both parties.  That is, these durations are about 7 days to 2 weeks longer than when the offer is accepted by the sellers.  In NJ, we have attorney review.  After an offer is accepted by the seller, ie he countersigns the contract, the deal goes into attorney review.  It can take the attorneys 7 days to 2 weeks to review the contract and complete an addendum signed by both the seller and the buyer.  It's at this point the deal is binding for both parties and it is this date that goes in the MLS.  I am pointing this out because even these durations are deceptively long in relation to how quickly listings are no longer available.  Prospects often don't want to see properties where an offer was already accepted and very often, if the property is Tenant occupied, the owner stops the showings.

Duration for 2 bedrooms went from 37 days, to 29 days, to 24 days during April to June quarter.  The duration for 1 bedrooms went from 23, 30 to 20.  

Inventory steadily rose throughout the quarter.  We started this quarter at 211 total units for sale in Hoboken now gone up to 317

I feel that the market has slowed ever so slightly since Memorial Day.  Mid June we broke 300 for sale listings in Hoboken which is a significant milestone both in real terms and psychologically.   There has been a mini surge in price reduction over the last 2 weeks in Hoboken and interestingly a number of them in the 1-4 family segment.  Given that interest rates have come up by more than 100 basis points since February, I think sellers setting any price they wanted has ended.  It's actually bringing the market more in balance and allowing buyers to contemplate a purchase for more than 20 minutes after a property hits the market.  Still a sellers market but more rational.  

June recorded the highest units sold at 107 properties again.

Here is the price per square foot chart that shows how prices have ticked up.

All and all the market needs listings.  If you are ready to move and you have waiting for a good time to list, this is it.   

The average absorption rate during Q2 2013 was 18.20 week with highest of 38.71 and lowest of 11.71 for Hoboken, NJ. The absorption rate is a number that describes how many weeks it will take to see off the current inventory at the current rate of sales.

107  properties were sold in June which constituted the most for the Quarter in a given month. The number also including properties other than condos/coops sold during this period. 

All and all the market still needs listings.  If you are ready to move and you have waiting for a good time to list, this is it. 
Stay tuned for JC results ......

Information Provided by Donna Antonucci
Prudential Castle Point Realty