2016 Aug 4th

The July Hoboken Condo Sales Results

Here are the July results. Prices are up over 12% from a year ago. Sales prices spiked again in July, almost reaching an average sales price of $800k. The average list price is now over $800k. The median sales price has hit $700k. The time it takes for a property to go under contract remains quite low. My experience has continually been that if my buyer doesn’t see the property the week it is listed, hopefully before the first open house, there will already be an offer on it. The number of new listings dropped significantly in July, which is to be expected as people take summer vacations, which may put pressure on the Fall market. Inventory remains very low. It would take less than 2 months to sell every property on the market if there were no new listings and sales continued at their current pace.

Looking at the breakdown by bedroom size, the median sales price paints a very interesting picture. The new normal? If you want a nice 1-BR, plan to spend half a million. A 2-BR will set you back well over $700k and that elusive property large enough for a few children? Well, we are up in the million and a half range. Which is the price for a starter brownstone, which will need another few hundred thousand in renovations to bring it up to today’s standards.

I’m often asked if I believe this growth in prices is sustainable or a bubble. Have you seen The Big Short? I just saw it last week. Very enlightening, though I had read the book previously. Aside from explaining in very understandable terms the underlying causes of the ’08 crash, the story makes it so apparent to me that this is an entirely different environment. By that I mean that unlike in ’05, ’06 and ’07, the buyers I work with today (and I work with many buyers) are extremely well qualified financially, have at least 20% cash as a down payment, very often much more, and are buying properties not for speculation but as a primary residence. While the movie points out that the derivative securitization may be making a comeback in the mortgage market, the fundamentals of the buyer profile is, imho, extremely different now. Eventually, the buyers looking for the bigger properties will be forced out of the market based on the rising prices (keep in mind that less than 10% of the condo inventory in Hoboken is bigger than a 2-BR) and make the move to Montclair, Westfield and Summit, where you get much more for your money and a heck of a commute as a trade off.

Thanks for reading, we welcome your comments, we are always available to discuss or help you with your real estate needs. Just give us a call at 201 993 9500 or email us at [email protected].

Here are the numbers:

  1. Jake

    With many prices north of 700K and 20% down being the new norm (as you underline), do buyers take out jumbo loans? I purchased in 2010 before the large price jump, so I was able to buy-in under the 417K milestone. At that time, above 417K required a jumbo loan. Are Jumbos now part of the new norm? I’m just curious, always wondering how people afford condos at these prices. Even if both spouses earn $140k each, these prices have to be intimidating.

  2. lori


    According to bankrate.com, the limit for a conforming non-jumbo in Hudson county is $625, 500. That being said, the rate on a jumbo is often times lower than a regular loan. The bank would rather lend to the high net worth individual (buying the more expensive property) because they have more assets and less risk.

    We are an area where buyers routinely buy million dollar properties. Many people make well north of $140k a year. That is merely starting salary for most on Wall Street, not including bonuses. Cravath raised starting salaries to $180k, not including housing allowance or start up bonus. More senior associates are pulling in over $300k a year. Based on my experience at a Wall Street law firm, the bankers make way more than the lawyers.

  3. Preston Raether

    We ve been noticing an upward trend of sales prices in the market updates for Hoboken and Downtown Jersey City condos during the past few months. That is good. It means the market is doing well, especially for real estate investors.

Copyright © 2008 Hoboken Real Estate News     Login     Sitemap