Categories: Hoboken Condos
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: