2011 Jul 20th

The 2011 Mid-Year Report – Hoboken Condo Sales

Hoboken Condo Sales Market Report

Did We See a Spring Fling?

There were 213 sales in the second quarter, more than 22% less than the  ‘federal-tax-credit’ stimulated 274 total sales of the same period last year which may seem terrible, at first.  But look at the 213 of this quarter against the 126 sales of the first quarter of this year – that’s a 69% seasonal increase!

Where are Prices Headed?

Median sales price declined by only 1.6% from last year to $450,000.  Similarly, average sales price and average price per square foot declined by less than 2% over the same period.   A drop, no doubt, but a very small one.  Seasonally, both average sales price and average price per square foot were up by almost 5%.

What About Active Inventory?

There were 369 active condos for sale at the end of the second quarter.  That’s almost 33% fewer Hoboken condos for sale than the same period last year!  But there was a seasonal increase in inventory of just over 1% from last quarter.  Overall, still good news.

How Much Should I Offer?

This is a question I am asked all the time.  My answer is usually the same – when Hoboken condos are priced correctly they sell very, very close to the asking price.  Look at the discount off list.  It’s under 4% across the board.  Sure, if something is priced incorrectly it can’t hurt to make a low offer but lowballs on the good properties that are priced right are simply a waste of time.

  1. Homeboken

    4% off the last listing price. What is the average % off original list price, that is the number buyers should be concerned with. A property may get the full list price, but after 100k of price cuts. I think steering buyers to bid as you described doesn’t tell the whole story.

  2. Craig

    Homeboken has a point. When you say 4% off list is typical across the board, is that off asking price at the time of sale, or off the original asking price when it first hit the market? My condo sold for $19k under asking price, or about 4% off. However, the unit was originally listed for $70k more than the selling price when it first hit the market before a series of reductions – a whopping 12% discount. So which would be considered the true discount?

  3. Lori

    Discount off list is always calculated based on the asking price at the time of the sale. If you read what I wrote I carefully noted the difference between overpriced properties and those that are not. Many buyers think they can make a low ball offer on well-priced properties. You know what usually happens? They get outbid.

  4. morally_right

    Anybody have an idea of how much Hoboken is down from the peak? In order to compare apples and apples, a comparison of sales of the same apartments would be preferable. If not, at least the same building, floor, view, etc.

    And how has a good location (e.g. on the water) fared versus a second-rate location?

  5. Lori Turoff

    Another point regarding discount off list – look at the weekly numbers I just posted. How many of the sold units actually had price reductions from their initial list price this week? One? And one had an increase. Sellers are getting real. They are finally, finally, pricing their properties to sell. That is why inventory is shrinking.

  6. Lori Turoff

    Morally Right – you can go back through any and every Weekly Wednesday Wrap Up for the past number of years and look at particular locations, particular buildings, particular views and particular decor and condition and figure that out if you think it’s really meaningful. The data is all right here in past posts. Knock yourself out.

  7. morally_right

    Is that the big reason why inventory is shrinking or is it more that sellers are taking their property off the market? Are the new listings minus dabos (or sales) equaling the shrinking inventory amount?

  8. Lori Turoff

    You know, that is another one of those questions that our lack of complete and adequate data makes it just impossible to answer (unfortunately). Too many units are listed multiple times (for example, 1br plus dens get listed as a 1br and a 2br), listed then withdrawn and relisted, etc. so it is not possible to just add up the numbers and reach a conclusion. My day-to-day immersion in the market, though, tells me that sellers don’t take their property off the market. If they can’t afford to take a hit, they rent it out hoping the market will improve. Some units don’t sell and expire but most that are listed eventually do sell from what I see.

  9. morally_right

    the number of dabos generally seems to be less than the number of new listings. So that’s why I’m surprised to see the inventory number actually go down.

  10. w

    What I see out there:

    Approximately one year ago today and two years ago today, 90% of people posting to this site said to brace for the almost immediate price decline.

    Well, that did not happen and prices for anything desirable have held basically steady since the initial nationwide decline. Further, desirable units are being sold almost immediately. I believe that the new building at Willow and 9th (across from CVS) already has 2 of 5 apartments under contract at well over 700K. That’s with no parking and an okay location for most people that want to walk to the path.

    Conversely, since the initial decline, rents in Hoboken have skyrocketed!! Any decent 2 bed is renting between 3K and 4K. If you are going to stay in Hoboken for longer than 5 years, with these prices, the tax effect and low interest rates, it’s cheaper to buy.

    We bought in the past 6 months. Our P&I, HOA and taxes total around 3K. Take the tax deduction in account and we net out around $2,200!

  11. Craig

    W – I have to disagree that prices haven’t fallen further in the past two years. Based on current pricing in buildings I looked at such as 82 Clinton for example – prices have fallen about another 5% from when I started condo shopping in the summer of 2009. Overall, Hoboken is about 20-25% down from the height of the market.

    In this market buying makes more sense than renting only if you plan on staying awhile. If you’re in Hoboken for less than 5 years, renting probably makes more sense. When you caclulate your net monthly buying costs vs. renting, you can’t just factor in the tax deduction. You have to factor in the closing costs and down payment you had to shell out (costs renters don’t incur). That makes your net significantly more than the number you quote and makes the monthly cost about equal to the cost of renting depending on how long you stay. Your real advantage over renting lies more in the fact that your investment will eventually appreciate in value (hopefully at least) and you typically get far better finishes/amenities in a condo than in an equivalent rental property for your money.

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