May results are in and they are not surprising – at least not to me. The big increases in sales price is what I expected after many months of contracting inventory. We haven’t seen $500 a square foot sales prices since March of 2009. Here is the data:
Not only are sales prices rising, the increase over last year at this time is huge at 10% for average sales price and 13% for price per square foot. Inventory is non-existent with only 3.3 months worth on the market. Days on market at 47 is an all time low. Back in ’06 at the height of the market it was over 50 days!
In my opinion, there is more of this yet to come. I can already hear the naysayers talking about ‘shadow inventory’. My though is this – if a stock has an alpha and a beta (part of the price of the security is determined by the volatility of the market itself and part is inherent in the value of the stock) doesn’t the housing market as well? Is it not possible that while the Hoboken real estate market was indeed affected by the overall economic crisis, some of this turn around is due to the inherent attractiveness of living and owning a home in Hoboken? That is my theory, for what it’s worth. Regardless of the economy at large, I believe people see Hoboken as an incredibly attractive place to live for many reasons with improvements happening all the time and that innate attraction supports our demand for Hoboken properties. I love our little city!