Hoboken Real Estate Report – Condo Market – December 1
In the Hoboken condo market, as expected, there was a significant drop in sales volume during November as there is on any other given year. Typically, the end of the summer is rampant, but showings typically taper off in September, an indication on November closed sales. Remember, if you take November closings, these are the results of buyers contracting during September’ish.
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As the winter progresses, we don’t see a whole lot of change in the typical patterns. December will remain moderate, but foot traffic will be comprised of more serious buyers. If you are a seller, remember, that during the summer, people will go on Sunday drives just to take advantage of the snacks while touring homes in nice weather. Those that do this in the colder months are historically much more serious types. Some advice to sellers would be to treat every lead you have on your home seriously because you never know!
In Hoboken, the average price of a condo sold in November of $509,701 was higher than the annual average of $489,558. The number of sales in November of 28, failed to meet the annual average of 51. Keep in mind, volume fallout in winter is totally normal. We look at rate of absorption which continues to improve steadily.
On December 1, there were 232 condos in Hoboken listed on the MLS. In January, 2011, there were 386 condos on the market, a 40% reduction in inventory. Some will say “Lucky Month”. I think not…The inventory has fallen month over month quite a bit. Here is the chart for inventory:
Regarding the macro market of Hoboken, investors are targeting condos with Capitalization Rates of 5-6% in Hoboken. In 2011, the average rental rate in Hoboken improved 11.6%, one of the biggest metro jumps in the country. There is a shortage of 3 bedroom condos and single family homes in Hoboken as only 5.5% of all inventory fits that criteria. In a luxury building (asked not to be named), the sales manager said 46% of all sales this year went to investors.
Here is a look at November stats from this month and year over year change.
|November 2011||November 2010|
|Average Sales Price||$509,701||$521,733|
|Absorption Rate||9.2 Months||8.28 Months|
It is our belief that we will not see a significant difference in home values until 2013, however on a micro/sub-market perspective, Hoboken is likely one that is going to defy the odds of that theory. My theory was based on a national perspective. The most recent jobs report, coupled by homebuyer confidence is going to be one of the reason why urban areas will recover first.
Investing in multi-family is always lucrative in the current economic conditions. Shortage of rental stock means increasing rental rates. Current MF buildings are being offered and sold at about 5-6% Cap Rates in Hoboken which means there is confidence that Cap Rates should improve nicely in the next couple of years. Cap Rates at 5-6% today are better than what other investment vehicles can provide. As long as you are aware of tangible risk, investors should have a field day with potential upside.
If you are looking at buying or selling real estate in Hoboken, call Scott Allan at 877-688-7582, or e-mail at Scott@NewJerseyRealEstateGuys.com. Scott is the founder of New Jersey Real Estate Guys and located at Weichert in Hoboken, right near the PATH station. Come see me and my team and find out why we are Hudson County’s most innovative agents.
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