Tuesday, August 28th, 2012

Hoboken Condo END OF YEAR Report – Now What? Market Analysis

Happy New Year to all of our loyal readers.  On a personal note, our year over year traffic on our website has DOUBLED!  That is exciting and is one of the reasons we are considered one of the top real estate information websites in all of New Jersey.

This article will focus on the Hoboken Condo Market.  There are many descriptive words we can use here.  Looking at the leading indicators we look at to determine the health of the Hoboken condo market, I can say with confidence that 2012 will be a positive year for Hobokenites.  I also believe that those that are on the fence about buying and make the decision not to, will look back in 2014-2015 and wonder in hindsight why they didn’t get in on a significant opportunity in 2012.

The most glaring improvement is the available inventory for sale and the depletion of inventory from 2011 to the end of 2012 as shown in the line graph below..  Without going into extreme detail, it is pretty self explanatory here:

In January 2011, there were 477 condos for sale in Hoboken.  In January 2012, there are only 187, a reduction of inventory by a staggering 60%.  The pace of sales volume, which calculates into the “rate of absorption” is along the same trends as a year ago.  Although 2011 sold about 14% less condos than in 2010, we shouldn’t forget the main reason was the First Time Homebuyer Tax Credit which expired mid-year 2010.  In June 2010, there were 134 condo sales.  In June 2011, things were normal or average with a Hoboken sales volume of 72.

If inventory is coming down and the pace of sales is consistent which happens to be the case, you can expect more significant competition amongst buyers.  Our current listings are not lasting long on the market.  Almost all of our listings, we are calling a “highest and best offer” situation, which is music to seller’s ears.

Another indication that the market is improving is the Price Per Square Foot of condos sold.  The 1 and 2 bedroom market was almost flatline since Q1 of 2011.  That was a great sign of recovery and was a clear end to the downward trend of prices.  The end of the year of 2011 showed the beginning of an upward trend in square foot prices.

1 BR 2 BR 3+ BR
Q4 2011 Avg $486 $466 $434
2011 Average $477 $456 $428
Q4 2010 Average $476 $468 $395

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We are seeing a lot of increased interest in 3 bedroom units in Hoboken as a result of more families moving into town and preferring a more urban lifestyle with proximity.  A tradeoff we are seeing is the family with multiple vehicles moving to Hoboken and downsizing to only 1 vehicle.  Only about 4% of the marketplace consists of 3+ bedroom units.  They are in very high demand at the moment.  The price per square foot of a 3 bedroom condo shot up from $395 / SF during Q4 of 2010 to $434 during Q4 of 2011, almost a 10% increase in value.

Sales activity was almost dead even in 2011 as it was in 2009, however about 8% less than 2010.  Again, we blame that on the First Time Homebuyer Tax Credit.

The average sales price of a condo in Hoboken in 2011 was $494,723, down from $498,135 in 2010.

Expect to see a slow slow month for January.  DABO’s or pending sales are down in November and December.  Unless January shows a more active number in January, we can expect February to be equally as slow.  We expect inventory levels to creep up just a bit before the spring buying season, however just as important, we anticipate a huge buyer frenzy due to improving confidence, historically low interest rates, and lower prices.  With the Fed agreeing to hold interest rates down, buyers will increasingly confident that if they find the right deal, affordability has re-entered the market.

Check out the charts below.  What are your thoughts on predicting how the first quarter will pan out.  For readers who register on our site, I will send you our thoughts on what we think.  Comment your predictions below in the designated area.

 

 

As a testament to all of our hard work, analysis, and research, our clients have successfully achieved all of their goals whether it was to buy or sell.  We are eliminating the disconnection between buyers and sellers which is one of the quickest ways to stabilize a market.

If you or anyone you know is looking to buy or sell in Hoboken, you have come to the right place.  Give me a call direct at 877-688-7582 or e-mail me at Scott@NewJerseyRealEstateGuys.com.

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