We have a bunch of year end statistics I’ve been periodically posting. There is one, however, with which I have real-life, day-to-day experience. I work with a lot of buyers. More than almost any other agent in Hoboken. The problem I’ve seen at every price point and every bedroom size is this – there is simply no inventory out there. My buyers request to see a particular unit, I make the call for the appointment and find out it’s already under contract. They make offers only to learn that there are 2 and 3 other offers on the same property. It is happening more and more frequently. The chart below will help to explain why:
Basically, we don’t have enough inventory. Let me break it down a bit further. Other than the seasonal 4th quarter “holiday respite” the number of properties being listed has dropped steadily. Take a look:
Not many listings at all. We’ve gone from a high of 513 new listings in the 1st quarter of 2010 to a low of 153 new listings this past quarter. That is a huge, 70% decrease. Why, you might wonder? Well, those people who bought at the last market peak (yes, I do believe eventually there will be another) aren’t selling at a loss. They are either staying put or renting out their properties. So we don’t have many units for sale.
And what has happened to sales activity during that same time frame?
There has been a drop recently but not nearly as great. The high was 284 units sold in the 4th quarter of 09 and the low 139 units last quarter. That is a 50% decrease. Going back to the first chart of absorption rate, if listings and sales continue at this pace, it would take only 4 months to sell all the inventory currently on the market. What that doesn’t take into account is that some of those units are real duds. They are never going to sell either because they are drastically overpriced or they are in terrible condition.
Which brings me back to my work with my buyers. I simply have nothing nice to show them. So I show them the duds with the hope that when a really good property does hit the market, they will feel confident enough to be able to make a strong offer before the other buyers out there do.