Market Anomalies in JC & Hoboken

Pavel Saikin
Feb 7, 2024
2 min read

Updated: May 8, 2024

Market anomalies are not merely an outlier sale price, or some other piece of singular data. Rather, a market anomaly is the culmination of data points that collectively form a notable deviation from the overall market trajectory. Such anomalies were seen in Jersey City and Hoboken throughout 2023 and they continue to appear in 2024. But what is a market anomaly other than a misinterpretation of existing data? - Something happens that doesn't seem like it should have. Dissecting indiscernible housing data is a difficult task and often impacts sale prices by tens of thousands (this is why it's important to have good representation!). There are two market anomalies worth investigating and understanding; The contrasting rise of 2-Bedroom prices and the rapid ascent of 'boutique' condos.

In both Jersey City and Hoboken, 2-bed condo prices have seen a rise, greater than other home criteria. There is the simple explanation of more demand than supply, or fewer home sales in 2023 causing the data to skew, which are both correct, still, it does not give way to a possible emerging trend. That trend may very well be the knock-on effect of two national market conditions, unaffordability and asset disparity. Prices for 3-bedrooms condos have risen to an extent where some buyers elect to purchase a 2-bedroom in order to maintain control over location and quality. Cash purchases have also concentrated on 2 bedroom condos, primarily in the $500,000-$999,000 range, which are often purchased as investments.

Boutique condos are a rapidly growing home-type in Jersey City and Hoboken. The term 'boutique' simply refers to a building that has a small number of units, usually 20 or less, but can even refer to 50 or less. As land continues to become limited and expensive, developers are forced to build smaller projects. But smaller doesn't mean cheaper. Many of these boutique condo developers are designing layouts and using finishes that exceed the standards of high rise buildings. Adding to the previous narrative of unaffordability, these boutique condos offer a better alternative; High end finishes in centrally located buildings with lower HOA fees and attainable prices. Since boutique condo development is growing exponentially, the true level of demand is unknown, causing some buyers to have sticker shock, while others rejoice in a home that matches their needs.