Hoboken Condo Inventory Continues to Grow
The problem in a nutshell: not enough condo sales. Numbers can be interpreted many different ways but one thing here is pretty clear. There is a stark difference in the number of sales per month over the past few months (in the 35 to 40 condos sold per month range) compared to what had sold in prior years (about 65 a month in ’08; 90 a month in ’07 and 60 a month in ’06). Take a look at the current numbers (in red below) compared to the busy season of past years (highlighted in yellow).
This slowdown in transactions has caused a real buildup in Hoboken condo inventory. Which brings us to the basic laws of supply and demand – when supply goes up, prices must come down until the market regains equilibrium. The good news is that while transactions are at less than half what they were in prior years and inventory has soared, prices have come down from the peak by almost 10%. Here is the full picture:
Please note – as some properties are not entered as “sold” in a timely manner by the listing agent, I will be updating this periodically to include any of those late – entered sales.
Hoboken Condo Sales Prices Still Have Room to Move?
May doesn’t appear to be as bad as April was but if you look at the year 2009 to date, Hoboken condo prices are down compared to the past 4 years. Even with a drop in sales prices, the days on market (DOM) number is still rising. The bottom line is that unless sellers price their properties aggressively, the chances of selling are slim. As for properties with significant flaws or terrible locations, they simply won’t sell unless the price is too good to be true. As always, though, the true “cream of the crop” sells quickly.
A few years ago, I can remember when first-time buyers would come in and ask for a nice 1 bedroom for $300,000 and I would ask them how they felt about Jersey City Heights. Now that same buyer has his or her choice of units for under $300,000. The bargains are definitely out there. As a long-time realtor I’ve probably seen thousands of properties and can tell pretty quickly on a very intuitive basis if a condo is priced right. As I tell all my clients, though, a buyer needs to be able to assess value. How does this particular property compare to others in the same price range? Buyers need the experience to make the value judgment and the only way to do that is by looking at lots and lots of units. That’s where my job comes in – not only in taking a buyer to see all those properties but in pointing out what differentiates them and what justifies a given price.
Sellers must also put on their ‘buyer’s hat’ when pricing their own properties. Simply calculating what they paid in 2005 plus a commission and pricing their condo so they don’t lose money will not work yet that is precisely what too many sellers continue to do. As a result, their condos continue to languish on the market. Eventually, as you can see every Wednesday, when enough price reductions are made, the unit may eventually sell. I think it will take a bit more pain and lower prices until we start to turn the Hoboken condo inventory picture around.
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