2017 Apr 4th

The Moving Average Sales Prices of Hoboken Condos

First, you may wonder what the importance of moving averages is to sales prices.  Simply put, they smooth out the short term, month-to-month fluctuations that are inherent in the market.  Many of you who work in finance are familiar with their use and different forms.

Here is the 3 and 6 month moving average chart.


No question that there is a downturn in the past few months. Too soon to venture a theory as to what is driving it but I’ll stay on it. Now if any of you quants out there have a formula/model I could borrow to do a weighted moving average I would be forever grateful!

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  1. Jake

    The downward wedge after the 3 month crosses the 6 month line is wider than previous crosses. Do you have enough data to include 2006 onwards? It would be interesting to see the behavior of those years for comparison.

  2. Joe Federici

    Isn’t there somewhere on Zillow where you can unlock future prices for real estate?

  3. Lori

    I have the data on a quarterly basis back to 2000. Will see what I can put together.

  4. Lori

    Zillow is useless.

  5. Mike D

    The monthly numbers are going to be highly sensitive to the types of apartments sold each month, hence the need for a many-month moving average. One month you can have a high number of 1BR sold, the next month you have more 2/3BR waterfront properties selling.

    The best metric IMO is to take the sales price of homes versus their 2013 assessed value, this way you can make apples-to-apples comparison. So if a home assessed in 2013 is 500K and now its selling for 600K, then you know sales are around 20% above the 2013 value. That percentage can be applied across the board regardless of where the apt is located or how big it is.

  6. Lori

    But assessed values are extremely arbitrary so it’s a poor benchmark.

  7. Lori Turoff

    I wrote that from my phone. Were you involved in the assessment? It was a joke. They didn’t come into the majority of the properties. Assessed values (and taxes) for extremely similar properties are all over the board. It’s a good theory, Mike, if the base line were reliable but, unfortunately, it’s not. And I won’t even get started on how they assess properties with rental units. Hoboken’s dirty little secret. I could write a book and when I quit this gig, I shall!

  8. AKS

    Not surprised to see the moving averages rolling over. I can feel it looking at where properties are being priced when they hit the market, and also from your listed vs. sold data…this time in 2015 felt like things were on fire (unfortunately when I bought my Hoboken condo).

    I think with where rates are/heading and the rental supply that keeps increasing, the Hoboken market may take a bit of a break… getting hard to justify owning over renting for a town that’s full of transients!

    Thanks for the data and info Lori… you sound like a very knowledgeable agent!

  9. Eric

    Lori, do you think it would make the trends more precise to use a “standard” unit size to narrow the comps? For example, what about tracking 2-bedrooms separately in the monthly analysis? From what you say, some months might have many more 1 bed or 3 bedroom units sold which would skew the trends.

    Alternatively, what about adding avg price per square foot as another set of lines to the chart? If average price fluctuates one way or another, the per square foot should remain in line. If both fall, that would be more concerning.

    Thanks as always, this is my favorite site and I’m always excited to see new posts and comments.

  10. Lori Turoff

    Thank you, AKS. Have you seen the prices of these new rentals? I called the other day about the new rental building on Harrison St. 600 HARRISON STREET! Take a look at a google map street view to get a real feel for the neighborhood. One bedrooms renting for $2750. 3 bedrooms for $4,750. That does not make renting more attractive than buying for most folks. Our demographics are a bunch of people who need a mortgage interest deduction to shelter some of their 6-figure salaries. Appreciation may level out a bit but I don’t see any parallels to 2004 – 2008 and I lived through those years as a Hoboken agent.

    Eric, I love your ideas. Unfortunately, this blog is a labor of love and the amount of work involved in what you are suggesting is simply prohibitive. I do actually track unit size by sq. ft. and there is not very much fluctuation at all. The monthly numbers also break everything down by bedroom size. I’ll see if I can add avg $/sq ft when I have some time. Appreciate the kind words and do remember to reach out to me when it’s time to buy or sell – I make my living as (a very experienced and knowledgeable) agent!

    Cheers!

  11. Josh

    Lori – I’ve always thought it would be cool to do more advanced analytics work on the Hoboken market, I’d be happy to lend a hand – and it would be interactive and incredibly simple (1 min per refresh)to maintain. You could do things like hyperlocal analysis (how is uptown Hudson doing compared to Jackson/Monroe), rolling averages, price per square foot, listing keyword searches (private outdoor, roof deck), statistically valid trend forecasts, etc. Shoot me an email if you’re interested!

  12. Lori Turoff

    OK – I’ll bite. You’re too kind, Josh.

  13. AM

    Thanks for your great analysis, as always. I think so much of what drives these fluctuations reflects more on the inventory, its size, condition, and location than anything else. The overall trajectory of that graph is strong, and as you pointed out earlier this week, the market is hot. Well priced properties move quickly, and many of us who have been in town for years simply balk at the prices of these new rentals. The properties that sit seem to have big issues, or are at the top end of the market. I’m amazed at how much of the limited current inventory is priced at over 2 million…

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