Monday, April 7, 2014

Q1 2014 Review - Hoboken Real Estate Review - Where is the Market Going?

Winter has gone and here is the first set of Hoboken's quarterly market review...

There were 171 closings during Q1 2014. 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.

Click to enlarge

As shown in above chart, The price per square foot for a 3 bedroom condo started from $652 in the month of January was highest and lowest in Mar at $487. The average 2 bedroom over the period was 1,162 square feet sold at the average Price Per Square Foot (PPSQFT) of $554 which is $59 more than Q1 of last year.  In January, the average 2 bedroom went for $600,817, $720,134 in February, and $617,583 in March. Quarter high for 2 Bedroom was at $720,134 in February.

Although small numbers, 3 bedroom category are huge in demand.  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 quarter at 127 houses for sales in January listings in Hoboken now gone up to a 205. Prices are average and does not show any upward or downward trend during this quarter however inventory is increasing and from the beginning of March at an increasing rate.  

Total unit sold in Jan was 59, 56 sold in Feb and 56 in Mar. The numbers does not show any ups or down but the market is expected to go up in during springs, as more people plan to shift during this season.

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.

Check how much your property is worth with our Property Value Estimator tool

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 41 days, to 35 days, to 26 days during January to March quarter. which means market are really good for sellers with less waiting time to sell their property. The duration for 1 bedrooms went from 56, 52 to 34, which is similar to 2 bedroom for the given period. 

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 absorption rate during Q1 2014 was 3.06 months in Jan, 3.20 in Feb and 3.66 in the month of March 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.

171 properties were sold in last Quarter. The number includes condos/coops, 1-4 families 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 JC results ......

Information Provided by Donna Antonucci