Hoboken Condos – Prices Are Down in May
Monthly Hoboken condo sales according to the Hudson County MLS show that May was a good month for buyers. Average asking and median sales price dropped below $500,000 for the first time this year. The discount off of list (actual sales price vs. asking price) increased back to 2.41%, about where it was back in March.
The Good News (for Sellers) in the Hoboken Condo Market
Not everything favored the buyers in May. Price per square foot is up, the number of units listed is down, the days it takes to sell, on average, is also down. The average price per square foot for Hoboken condos in May was $532, the highest it’s been since January. The average number of days a Hoboken condo is on the market before going into contract is only 57. I work with many buyers who think they are going to outsmart the current market. They see a fabulous property in a good location that, in my experience, is priced correctly, but they either wait too long to make an offer (and miss out because the condo is already under contract) or they make a low ball bid thinking they are going to get a bargain (and miss out because the unit was well-priced and sold at or close to the asking price.) Prime Hoboken condo units are often under contract the week they hit the market. What is a prime Hoboken condo? One that offers good value and is in a good location. No matter what you may read or hear in the press, these units sell at or above asking price. Many disappointed buyers learn this lesson the hard way by losing out on the best condo they saw during their search. Think of the market as a bell-curve with the nicest, well-priced apartments selling immediately, not nice, overpriced apartments languishing on the market forever and the majority falling somewhere in the middle. Condos that are the cream of the crop, i.e., condo units that show well, are in good locations and are priced properly sell quickly – often very, very quickly.
’08 Hoboken Condo Sales vs. ’07 and ’06
When analyzing numbers, it’s easy to make knee-jerk assessments based on a one-month-sales-activity “snapshot” but to make an accurate evaluation it’s crucially important to look for trends over a period of time. One needs to look at a period of months to determine if the Hoboken condo market is advancing, declining or stable. Average sales price may be up a little one month, down the next and price per square foot, may do the opposite. Year-to-year comparisons may demonstrate similar, very slight changes in both directions. In the stock market, that’s known as volatility. While the Hoboken condo sales market appears volatile in the short run, the overall trend has been pretty flat since 2006 and that is a healthy thing. Next month, at the end of the second quarter, I’ll post a chart that shows average sales figures from 2000 to date, by quarter. That will more clearly indicate the current trend in Hoboken condo sales. We are holding steady.
A Few Footnotes to Keep In Mind:
1. The Numbers May Change
The numbers come from the Hudson county MLS system. At the start of each new month, I look up the numbers for the month that just ended. When a property sale “closes,” the status gets changed in the MLS from “dabo” (under contract) to “sold.” Some Hoboken real estate agents don’t enter the change of status immediately. There is no reason for this or hidden agenda on the part of the agent. Closings that take place the last few days of the month may not get entered until the following week. I have entered what has been recorded in the MLS to date. About the second week of each month I check again to capture the sales that were entered late. So should you see my numbers change, that’s why.
2. New Construction is Different
New construction is often sold by the developer. The large buildings at Maxwell Place, for example, are primarily sold through Toll Brothers sales office. These properties are not listed on the MLS so those condo sales are not captured in these charts. Also, gut-renovations of rental properties (a different type of “new construction”) are often sold off floor plans and these units are listed on the MLS far in advance of construction being completed. When this happens, the days on market number is very high. The clock has started ticking before the construction began and sales aren’t recorded until closing – the wait for the Hoboken condos to be finished and granted a C of O can be a long one. It skews the numbers a bit when this happens. These units also tend to be priced higher than resales and that affects the average sales price figure as well.
3. Discount Off List is Only Partial
Usually, when a seller reduces the asking price on a condo, the listing gets pulled from the MLS and relisted at the new price and the days-on-the-market clock gets reset to zero. Discount off of list is calculated off the most current asking price. It does not reflect the original asking price of the property. To do that I’d have to look at hundreds of listings one-by-one and it simply takes too long. If the Hudson board wanted to present more complete information, they could show the original asking price and subsequent price reductions on the listing. Unfortunately, they don’t. A special report, called property history, has to be run on each individual property to see the earlier pricing.
4. What is Prime?
How does a buyer know it’s a “prime” condo? Simply by looking at enough Hoboken condos to be able to judge which ones offer the best value for the money. The most important factors are location and condition. Price per square foot comes into play but, often, things like the layout and use of space, what floor the condo is on, how big the building is, how strong the condo association is (and by this I mean financial strength) all affect that assessment. How many is enough? The more condos you see the better you’re able to compare. Most people only have a limited amount of time to dedicate to their search. My best advice is to work with an experienced, competent realtor whose advice and judgment you trust. Many people just use a friend, but we’re talking about an investment of hundreds of thousands of dollars here and your friend may not be the best choice. Look on Trulia or Active Rain and see who are the top rated agents in your area. The counsel of a good, experienced agent familiar with the area you desire may be what you need to land that prime condo and to pay the right price to get it. But that’s an article for another time.