2012 Jun 7th

Hoboken Condo Sales Price per Square Foot breaks $500

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!

  1. Leslie

    Thank goodness for some good news! Thanks as always, Turoff Team (PS hope to see you both & Sempei soon @ Elysian … foot cast comes off in 12 days!)

  2. Craig

    I’m with you Lori – the improvement in Hoboken’s market is directly linked to the inherent attractiveness of living and owning a home in Hoboken. I don’t believe there is any shadow inventory in Hoboken. Most distressed properties in this town were/are sold right away as short-sales.

    I doubt there are many foreclosures in the Hob, and if there were, I can’t see why any bank in its right mind would withold the property from the market here as part of the mythical shadow inventory considering how well this market has been doing. Shadow inventory occurs in distressed markets where banks must withhold mass amounts of foreclosed properties for sale while waiting for the local market to rebound so that they can recoup their losses. Not gonna happen here. This ain’t the burbs – there were never mass amounts of distressed properties here to begin with. Most people could successfully rent their property in a hot rental market to cover the mortgage before their circumstances caused them to lose it.

    Anyone waiting for the release of shadow inventory to bring Hoboken’s market down again before buying better wise up and get in now before they’re priced out of town.

  3. Andy

    Thats excellent news. 2bds appear to be going for less than what they were in 2009 but its a very positive sign.

  4. Craig

    “…2bds appear to be going for less than what they were in 2009 but its a very positive sign.” – Andy

    No, they’re not. I was condo shopping in 2009, went to contract in December 2009 and subsequently closed on my condo in January 2010. That year was when the market hit bottom. What was selling for $550k in 2009 is going for at least $600k or more now. Prices have risen 10% since last year alone as Lori points out.

  5. Lori

    The single change that I thinks takes buyers the MOST by surprise is this scenario which I see played out over and over:

    Buyer: Hey, Lori, can we go see MLS# 120001234 tomorrow?

    Me: Sure, let me set it up and I’ll confirm with you later

    Me: Sorry Buyer, I know it’s only been on the market 3 days but there is an accepted offer on that unit and the owners have stopped showing it.

    Or Me: They have multiple offers and are doing ‘final and best’ at 5pm tomorrow. We can go see it but if you are interested you will have to make an offer (your best offer) tomorrow.

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