Everyone always tries to time the market to buy at the perfect time. When we’re in a seller’s market and engaging in bidding wars, everyone looks back nostalgically to previous years and wish they had been in the market back then (even though no one wanted to buy then either!). We are currently in a time that people are going to look back on as one of those ideal times to purchase. Prices have fallen from their highs in 2017, on average about 5%, and interest rates are now at historic lows. In December 2018, interest rates were at 4.625% and they are now at 3.5%.
Pricing Trends in Downtown Jersey City
*DOM = Days on Market
As a result, purchasing power has increased significantly over the past year. If you were looking for a property in 2018 and your price range was $730,000, you can now bump your budget up to $835,000 and make the same monthly payment. In addition, you can also factor in the 5% drop in prices and now you can purchase a property that last year was $880,000 for the same monthly payment as a property that was worth $730,000 the previous year. It really is an ideal time to purchase.
A lot of people want to wait in a declining market for prices to fall further, however, let’s look back to our previous example for some insight into this. If prices fall another $50,000, but interest rates go back to 2018 levels, then you lose $100,000 in purchasing power and you haven’t really purchased something for $50,000 less but $50,000 more.
In addition, the lower interest rates have spurred purchases, the DOM has continued to steadily decline and prices have actually started to increase again. Interest rates fell under 4% around the middle of the year but hit the historic lows in September. If we break 2019 into quarters and look at the price trends we can see a large increase in purchase prices after the interest rates were cut sharply in the 4th quarter.
Pricing Trends in Downtown Jersey City in 2019
If you were sitting on the fence trying to decide when was the right time to jump into the market, I think these numbers make it clear that now is an ideal time before prices start to climb further. Please reach out today and we can go over the numbers and pricing for the buildings and neighborhood that you are focused on!
By Heather Williams