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Latest interesting news in NYC METRO Real Estate (NYC, Downtown Jersey City & Hoboken):
Market Conditions Change for the better; Inventory the indicator
 Entering into 2012 there is a great deal of optimism regarding the real estate market. There is also a great deal of uncertainty. We have a number is statistical trends that have become apparent over the past 6 months. The number of sales have decreased in year over year comparisons for 2011 compared to 2011. Yet Inventory levels, the number of new re-sale listings coming on to market and available new construction opportunities have all been decreasing as well, which usually does not coincide with sales decreasing. That puts our market in an interesting position, if the trend continues we could have more demand than desirable housing options which would cause prices for the more desirable properties to surge significantly. 2012 may be the most intriguing year for real estate in the last 10 years due to these unexpected factors.
Recapping 2011 statistics, the results for 2011 are actually more positive than they appear at first glance. The past year was the 1st year in the past 3 years that was not aided by any government program to spur sales. The results of 2011 were based on genuine consumer demand which is a very good sign. Although the number of sales in 2011 were slightly lower compared to 2010, in our prime markets (NYC, Jersey City & Hoboken) the prices increased. It appears that the real estate market has become stable in most prime urban markets over the last 18 months. The key number that may cause 2012 to exceed the existing positive market projections is inventory levels dropping sharply. This is a point in the market that we have not been in for a long time and never if you consider the current economic climate.
 Inventory levels have dropped off for a few reasons. The reason that we usually associate inventory levels decreasing in the past was increased sales. That is not the case this time, we have a series of a factors in play. Yes, the number of sales is improving compared to our miserable days of 2009. Yet that is not the major factor. We have a much higher percentage serious owners selling their homes now, we have very few people just trying to test the market, therefore less re-sale inventory is entering the market. Financing for new construction condo/co-op sale projects is difficult so many new projects and previous project that were slated to be condo or co-op sales have converted to rentals. Lenders have been much more agreeable with financing rental projects, therefore we have less new construction apartments available. Finally the speed of sales has improved so inventory is not sitting on the market as long as perviously.
All this leads me to believe that 2012 will be an incredible year for real estate and everyone in it or around it. Pricing has been consistently reasonable throughout our prime market locations. The demand, has been and continues to build up for quality properties in our market and that is not likely to change throughout 2012.
Key Factors leading to an positive 2012:
- Inventory Levels Decreasing.
- Pent up demand for quality housing.
- Interest rates are unbelievably low.
- Many lenders have suggested that they will be loosening their requirements.
- The pent up demand could lead to some buyers lower their original criteria.
A Look at the inventory levels at the end of each Quarter in 2011:
| Active Inventory |
NYC |
Downtown
Jersey City |
Hoboken |
Hudson County |
| End of Q4 2011 |
8,440 |
318 |
234 |
3232 |
| End of Q3 2011 |
8,989 |
344 |
383 |
4,150 |
| End of Q2 2011 |
9,171 |
344 |
429 |
4,014 |
| End of Q1 2011 |
9,181 |
361 |
417 |
3,926 |
Jamie Daniels - Sr VP
The Daniels Team at Halstead Property
TheDanielsTeam@halstead.com
201.478.6722
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