Monday, September 9, 2013

July- August (Summer) 2013 Review - Jersey City, NJ Real Estate Review - Where is the Market Going?

The Jersey city's July August (Summer) Review is here. There were 153 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 $492 in the month of July and $599 in August.  The average 2 bedroom over the period was 1,112 square feet sold at the average Price Per Square Foot (PPSQFT) of $491.  In July, the average 2 bedroom went for $540,434 and $559,892 in August. 

Although small numbers, noticed how the 3 bedroom category is trading above asking price during July and August period.  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.

We started this summer at 175 houses for sales in July listings in Jersey city, Downtown now gone down to a 147. As the economic outlook looks better than what we have had since the crash, buyers are looking to buy.  Prices for 1 bedroom recorded high in July at $546 which is lower than last quarter prices. Year started at $447 and $434 for 1 bedroom and 2 bedroom respectively, Now reached at $561 and $502 for 1 bedroom and 2 bedroom respectively in the month of August. Number of Inventories sold in July - August were not so good when compared with last quarters, this is mainly because of holiday season in the region. Summers are not considered as the most favorable time to buy properties. Most of the People go to enjoy their vacation and go outstations during this period.

You can either have a deluge or nothing within a couple percentage points of the right price.  Pricing is very very important and it's critical to sellers to get an agent who can price your property correctly.  Once you introduce your property to the market place as  New to the Market, you can re-announce it.  It's like the premier of a movie.  You can't re-premier it.  You can only create that excitement, that frenetic emotional buying once.

3 and 4 bedrooms are too low in terms of units to determine any meaningful trend here but there is enough volume in the 1 and 2 bedrooms in terms of number of closings.  The duration measures the time the listing went up to the time the unit went under contract. Duration for 2 bedrooms went from 46 days to 32 days during July -August period, which can be considered as a normal trend for 2 bedrooms properties.

The duration for 1 bedrooms went from 40 to 27, following the same trend as 2 bedroom.  

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.   

Here is the Monthly unit sold graph indicates properties sold during the period.

75  properties were sold in July and 77 properties were sold in August.The number also including properties other than condos/coops sold during this period.

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. 
Stay tuned for more quarterly reports ......

Information Provided by Donna Antonucci
Prudential Castle Point Realty