Why Are Average Sales Prices Stable When Price Per Square Foot is Dropping?
The November sales results are very interesting.
Take a look at the bottom two charts. I compared this year’s monthly results to the past 3 years and noted the year-over-year changes. For the sake of simplicity, let’s just look at the yearly average figures at the far right. The average sales price of a Hoboken condo has decreased only a little. The price per square foot has decreased by much more. Why might that be?
To date this year, 588 condos have sold for a total of $295mil in sales so far. Last year 800 condos sold for a total of $423 mil in sales. That represents a 30% decline in gross sales but only a 22% decline in total space sold. The average unit size sold so far this year is 1060 square feet versus 1000 square feet last year. Of course, I’ll complete the chart when we have all the data at year end.
So what does this mean? Basically, that you now get more for your money in the Hoboken condo market. Buyers who were spending half a mil for a 1000 square foot 2 bedroom can now get closer to 1200 or 1300 square feet for the same price. That is my theory and my day-to-day experience in the market (having closed more deals in 2009 for buyers than any other agent in Hoboken) bears that out. Any quants out there want to contribute an alternative analysis? I’d love to hear your ideas.