Hoboken 4th of July 2013

Ok, today it officially feels like summer to me.  The day after the awesome 4th of July fireworks display on the Hudson river, parking was easily had in downtown Hoboken.  It’s also really hot today.

I’d thought it would be helpful to point out at couple of observations and facts about the current market that you could use if trying to decide whether to buy, sell or just go to the beach!

Couple of observations and useful facts:

• July is typically one of least active months in terms of new contracts
• We have 294 condos for sale in Hoboken, up from just over 100 in early February
• Jersey City has 160 condos for sale, up from just over 100 in February as well
• 30 year fixed rate conforming rates have moved up sharply over the last couple of weeks.  According to Mike Mundy of Pinnacle Mortgage:CONVENTIONAL CONFORMING LOANS  (loans less than or equal to $417,000)

  30 YEAR FIXED —————————- 4.625%/ 4.731% APR

  15 YEAR FIXED—————————– 3.500%/ 3.608% APR

  5 / 1 ARM————————————- 2.875%/ 2.903% APR

  7/1 ARM ————————————  3.250%/ 3.311% APR

To sum it up, we are moving to a season of slower buying activity along with mortgage rates and inventory levels trending upwards.  Keep in mind that the inventory levels and interest rates are still quite low on a historical perspective.  Rates were over 5% in early 2010 and at that time those rates were considered really low.  Our inventory levels are also quite moderate compared to the 500+ units available in late 2011and prior to the market taking off in February 2012.

The real X-factor in all of this is buyer demand.  I’m still seeing this to be quite strong with 164 new contracts within the last 30 days in Hoboken and downtown Jersey City.  That is a lot of buying activity to be sure!

If the demand keeps up, we can see prices continuing to hold steady and perhaps inch up a bit however if buying demand begins to taper off we could see some pressure on prices, especially from motivated sellers or sellers lured into thinking they could sell quickly at elevated prices.  The elevated inventory and mortgage rates may then begin to have a compounding effect adding additional pressures to our marketplace.

There are two things that are certain.  One is that markets change.  It’s amazing how much I’ve seen over the course of my 13 years in the local real estate market.  The other thing certain is that no one can accurately predict when that will happen.  My advice is always to buy or sell when it makes sense to your personal needs and situation.  My job is to know where we are today and what my customers goals are so that we can come up with a course of action that best combines these two.  Then we work from a plan of certainty.

Happy Summer everyone, I’m always around town if you need anything!

Eddie –