2012 Mar 13th

The February Hoboken Condo Sales Results

Some interesting trends are showing up in the Hoboken condo market.  I’m seeing activity as measured by both sales and number under contract up and the number of listings way down.  Look at the price per square foot by bedroom size!  Here are the most recent numbers:

Here is more to ponder.  If you’d like to see the interactive version of these charts, click here.  Look at what’s happened to inventory over the past year + two months:

This one shows average sales price over the same period:

There is no question in my mind that the market is picking up.

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  1. bz

    Just read an article predicting NYC 2012 RE market. It felt like I was reading about Hoboken, especially the part about baby boom and 3-bedroom properties. Insteesting. http://theapplepeeled.com/buyers/2012-the-year-of-eh-with-pockets-of-wow/

    I’m sure Hoboken share many traits with NYC.

  2. Justin

    Lori – This data is exactly the kind of thing I was originally saying is misleading to the average home owner. We see a flat to down slightly median price here (note, the median $/sq ft fell a lot) and the average price is rising modestly. The average transaction is not at a price that instills confidence. If you have an average condo in Hoboken, either one or two bedroom, you aren’t selling it for more than the asking price OR more than recent comps. This data simply reflects the fact that higher caliber/ price units are selling (can tell b/c the average size is increasing) and, further to my original point, the recent transactions that are increasing the average sale price are not reflective of the “average” owner (even by Hoboken standards). Why do I say that? Your most recent 3/14 update is perfect. That’s the most extreme example I could possibly think of, actually: 2 2BRs selling for seven figures (neither sold for asking price, I would add) in the Maxwell … that’s what’s bringing the average price up, NOT fundamental improvement.

    bz’s link is most definitely appropriate in this context. Have you or has anyone you know ever seen the Hoboken market this polarized/ segmented?

  3. Lori

    Justin, say what you will. For the past several weeks, EVERY SINGLE OFFER in which I have been involved, and there have been more than a handful, has involved multiple bids. Most of them were run of the mill 2 bedroom units. I cannot make appointments and show units fast enough to avoid being told “offer and acceptance, no more showings”.

    You say average price is bumped up by Maxwell. (PS – Maxwell asking prices are purposely manipulated by the sale’s office). I say median price is brought down by the low-end, small 1brs because first time buyers don’t have the 20% and that’s where the market has been hurt. Price for the little, start units has tumbled. Look at the breakdown by bedroom size.

    Less supply, more demand, basic economics tells you prices must rise. IMHO, it’s only a matter of time and that time is coming fast.

  4. Justin

    I am glad there are multiple buyers interested in solid properties as it would be really scary if there were dead silence out there on well-priced, nice places. I do sincerely hope you’re right about the market…would be great to have a real, sustained improvement. Yes, basic economics would certainly suggest that if supply drops, prices should rise – for a particular good/ product/ service. However, there’s nothing “basic” about this economic environment (the aftermath of the housing bubble) and not all properties are equal/ comparable. I think it’s safe to say that if prices do start to rise, the closet inventory (people that would gladly sell if their place were worth 5-10% more) will list their places and quickly cap the rise in prices.
    If what I wrote previously were totally inaccurate, there would be plenty of inventory for all the buyers chomping at the bit out there to consider. Buyers with cash want to buy at historically low interest rates… too bad more home owners can’t or won’t sell. Basic economics doesn’t explain this. The low level of inventory and a slow grind may be the best way back to a healthy market.
    Also, I hear you on the small places. The median $/sq ft shouldn’t be influenced that much by them though (the median SHOULD be a less biased stat). I don’t have your data but if there are that many units at a tiny $/sq ft, you might want to back the top handful and bottom handful out to see if there’s a more useful stat…or, show the median $/ sq ft by bedroom type as well.

  5. Lori

    One thing I’ve definitely noticed is that investors are flocking to the lowest priced properties. They can buy them cheap, and get decent rents from day 1 (assuming rent control limits allow it). I’ve always heard that when investors are getting back into the market it’s a good sign.

    Of course, if prices go up 10%, there will be more people who can sell and either break even or make a profit. But if they already rented their place out, they have a lease, they may be cash flow positive, and they may realize they now have an appreciating asset as an investment and decide to hold it.

    What I sincerely hope is that the people who are making these decisions are doing it based on what’s going on in their lives, and not to make a quick buck. The system broke but that doesn’t mean it has to stay broken.

    I’ve read that what’s taking place in Hoboken is also happening in other strong markets around the country – Seattle, Portland, Boston, Washington DC.

    Finally, I truly appreciate all of your points-of-view and comments. Thank you for contributing.

  6. Craig

    It seems to me that the sweet spot of newer construction or renovated 2 bed/2 bath units in the $450-$600 range move quickest and closest to asking price. Well-priced 3 bedrooms also seem to be hot sellers because of their rarity. It’s only the crap that’s not selling as well as the overpriced inventory (I’m looking at you Garden Street Lofts Unit 601). 1 bedrooms are still cheap and sitting on the market because there’s a ton of them on the market and not as much demand for them. From this I take it that young couples and small families are driving the local market right now rather than singles who are more content to rent.

  7. Lori Turoff

    I think the bigger problem with the young, singles is that they don’t have even 40k or 50k saved for a down payment. No one is writing PMI (purchase money insurance required by lenders for less than 20% loans) any more and if you don’t have 20% you are not getting a mortgage except in very, very rare instances.

  8. Craig

    You can get loans with less than 20% down with good credit scores – just not for Condos. Trustco offered me a loan with 90% financing – as long as it was for a single family house. So I think some people in that situation who are dead set on buying something may be heading to the burbs where a small fixer-upper starter house can be had for the price of a 1 bedroom in Hoboken. FHA financing is a currently viable option for condos with less than 20% down. But the recently raised mortgage insurance premiums for those loans are pretty steep now and FHA approved buildings in Hoboken are few and far between.

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