Monday, September 15, 2014

July- August 2014 Review - Jersey City, Downtown Real Estate Review - Where is the Market Going?

Quarterly Review, hudson real estate monitor, Donna Antonucci
Summers are about to finish and Autumns are on the doorsteps. Here is the Jersey city's summer market review. There were 122 closings during July-August 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.

As shown in above chart, The price per square foot for a 3 bedroom condo recorded $383 in  the month July at $487 in August. The average 2 bedroom over the period was 1,226 square feet sold at the average Price Per Square Foot (PPSQFT) of $610. In July, the average 2 bedroom went for $730,426 and $763,263 in August.

Although small numbers, 3 bedroom category is huge in demand among customers.  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 153 houses for sales in July listings in Jersey city, downtown now gone slightly down to 151 active listings.  Inventory was increasing from the beginning of March at an increasing rate, now keep constant rate this quarter. Average 61 properties sold per month during this period.    

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.

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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 32 days to 27 days during July - August period. 

The duration for 1 bedrooms went from 35 to 27, which is less from last quarter. This also indicates the good market conditions for both buyer and seller.

Here is the price per square foot chart that shows the price changes during first 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.   

Average 61 properties sold in July and August, which is also a good market conditions indicator .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. 

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