Monday, January 6, 2014

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

The Year in Review is here. Here is the first installment of the condo numbers for 2013. There were 1073 closings in 2013, which is 34% higher from previous year closings (803). 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.

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As shown in above charts, The price per square foot for a 3 bedroom condo started from $471 in the month of January, went lowest during Oct at $448 and highest in Mar at $635. During last quarter, the Price per square foot for a 3 bedroom condo went from $543 to $448 to $567 to $528 in September, October, November and December respectively. The average price per sq feet for 2 bedroom over the period was $528.  In September, the average 2 bedroom went for $636,494, $650,703, in October, and $681,511 and $582,833 in November and December respectively. Year high for 2 Bedroom was at $681,511 in November, which is just similar to last year trend.

Overall, prices have ticked up and this is not surprising given low inventory levels.  We started the year at 127 houses for sales in January listings in Hoboken, peaked in July at almost 300,and ended at 169 units available for sale.  Price and inventory, both have increased in numbers, which is good for both buyers and sellers.  Buyers can buy with confidence that we are at the bottom.  They can safely put money in housing where it will retain and increase in equity. 

The demand for investment properties still continues to climb.  Anecdotally, investors seem to think this is the sweet spot between prices, financing and upside potential for rents.  All shapes and sizes are looking for investments - large property owners, individuals who want just one or two units for supplemental income. 

The Highest sales volume was recorded during spring and summer with July recorded highest sales at 125 properties and the least sales in the month of January with 40 properties. There was normal downward pattern found in the sales of 1 and 2 bedroom condos in this quarter.

386 total condo units sold in 4th quarter (September - December), 189 were 2 bedrooms comprising 50% of the total volume.  The 2 bedroom continues to be the most sought after unit size..

3 and 4 bedrooms are too low in terms of units to determine any meaningful trend here but there is enough volume in the one 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 38 days, to 39 days to 36 days, to 29 days , during September to December period.  

The duration for 1 bedrooms went from 38, 39,49 to 47.  This is significant and is a correlate with increasing prices.  Increasing prices means buyers want to get through contract negotiations and attorney review quickly.  There is likely less quibbling about inspection items. 

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

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 2013 was 2.67 months for Hoboken, NJ. The absorption rate is a number that describes how many months it will take to see off the current inventory at the current rate of sales.

83  properties were sold in December and 82 were sold in November which was lowest in last quarter. 

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 JC results......