In the decade I’ve been selling Hoboken condos and another 25 years of investing in real estate in the NYC area I’ve never seen a market like the one we are in now. What is so fascinating to me is that I don’t believe this is a bubble. This incredible upward spiral in pricing is purely a result of basic economics. No supply and ever increasing demand for bigger units. Even with new Hoboken condos coming onto the market every day, they sell even faster than they are listed so the inventory never builds up.
Hoboken is a great place to live. The City continues to become more desirable and more people wish to stay here for longer and longer. Improvements have been made under Mayor Zimmer and by the current administration which, now that the deadlock on the City Council is gone, has even more ability to work for our future than in the past. Life in Hoboken is likely to continue to improve as we intelligently deal with our flooding problems, come up with viable transportation solutions, just say no to overdevelopment and continue to improve the schools.
I see these “learn about the ‘burbs” seminars and shudder at the memory of days when I commuted for an hour each way from the ‘burbs to my job as an attorney in the city. Let’s face it – it’s never really only half an hour and unless your driver is chauffeuring you in your limo, commuting sucks.
I’m seeing multiple offers on every single decent property. I’m seeing accepted bids of 5% and more over asking price, often all cash. I’m working with some understandably, very frustrated buyers.
This surge is not limited to Hoboken. We were in New Orleans a few weeks ago and the same thing is happening in the desirable neighborhoods there. We stopped to visit with a friend in Roanoke, Virginia and picked up a local paper with articles about a crazy market in Northern Virginia. Of course, we all know it’s nuts in Manhattan and Brooklyn. I think some of the demand is coming from young buyers who would have bought in Brooklyn but were priced out of the better areas.
Interest rates remain extremely low, the economy and stock market are doing well and there is no reason to think things are going to change much any time soon. If you are selling, you are lucky. If you are buying, you need a knowledgable and experienced agent to guide you through these turbulent waters. Give me a call if you’d like my help.
Here is the February chart:
So what do all these numbers mean? Here is my take away:
- Sales prices are up 20% from a year ago. 20%!!!
- Fewer properties are getting listed (down 11%) but more are selling (up 33%).
- An average discount off list of under 1% means list price is where the bargaining begins and goes up from there.
- With the average price per square foot at $586 you should be calculating based on $600 if it’s a nicer than average property (i.e., elevator, parking, w/d, outdoor space). One bedroom prices are already over 600 as smaller units typically are more on a per square foot basis than larger ones.
The market is moving as we speak and appraisals are an issue as appraisers use historical comps and prices are set going forward. That means cash is king. If a buyer is not able to come up with the funds to bridge the gap between a possible low appraisal (which means almost every nice property) and the agreed upon sales price, that buyer is not going to get the deal.
Have you been experiencing this competitiveness in the market? Would love to hear your stories.