There is good news for the Hoboken and Downtown Jersey City condo markets, which both yielded healthy gains across the board in 2016. Hoboken saw the average sale price rise 8.7%. Average price per square foot and the median sales price also yielded healthy increases of 4.1 and 11% respectively. These gains are mostly attributed to persistent low levels of inventory (aka number of homes for sale) as reflected in the decreased sales volume of 13.2%. This simple supply and demand model where the supply is low and the demand is high moved homes on and off the market with an average of 29 days. Although the Days on Market is longer than last year by 11.5%, homes are selling quickly, which makes for some very happy sellers.
Don’t worry buyers. We have some good news for you too. Average sales to list price is down 0.3%. That means homes are selling slightly lower than list price on average. Point-3% might not seem like a big difference at first, but last year we saw periods where buyers were paying on average 100.3% of the list price. This means there was a little more wiggle room at the negotiating table for buyers in 2016.
The one vector which experienced a decrease is the rate of appreciation. This means that although home prices increased in Hoboken, how quickly we are seeing the numbers increase is slowing down. We saw this with both average home sale prices and price per square foot where the appreciation rate fell from 14.6% in 2015 to 8.7% in 2016 for sale price, and 11.1 to 4.1% in price per square foot.
Now it’s Downtown Jersey City’s turn, where sellers also shared in rising sale prices with the average condo selling 7.5% higher in 2016. However, like Hoboken, the rate of appreciation was notably stymied when you compare the 13.1% increase of 2015. Don’t let that discourage you though, because price per square foot squeaked by with a higher appreciation increase of 11.2 to 11.3%. However, the median sale price only increased by 6.5%, which is remarkably lower than 2015’s 12.7% increase.
As we enter 2017, we should expect to see continued appreciation and competition. At a time of year where we typically see inventory levels increase, Hoboken only has 89 active condo listings, while Jersey City has only 106. With interest rates on the rise, we expect a surge in buyers eager to lock in at a lower rate. So, in 2017 expect more of the same: low supply, high demand, and conservative appreciation rates across the board.