As we said in yesterday’s introductory post, the Old Northeast neighborhood has very distinct sections. To start with our individual analyses, we’re looking at the area from 4th Street N east to 1st Street N, and from 5th Avenue N north to 22nd Avenue N. It’s not the “sexiest” part of the neighborhood, but it’s often where you can get “more bang for your buck.”
The homes in this area tend to be a bit smaller, with a vast majority being the cute bungalow style. Particularly as you get closer to busy 4th Street, there are not as many homes that have been remodeled as in other parts of the neighborhood, which contributes to a lower average sale price (currently $327,359 for 2013 year-to-date, 29% lower than the Old Northeast as a whole, and 38% lower than the quadrant east of 1st Street). There is also a higher concentration of multi-family properties and rental apartments in this section, which tends to be unappealing to the single-family-home buyer.
True to the data as a whole, it’s clear that 2011 was the turning point in the market. Price per square foot ($/sq ft) hit a low of $135, and average sale price hit a low of $232,520. Interestingly, the total number of sales and $/sq ft are exactly the same today as they were in 2008, with average sale price just a hair lower. What has changed dramatically is length of time on the market.
In 2008, the average time to contract was 165 days. That figure reached a high in 2012 at 195 days, but for the current year-to-date has plummeted to 83 days! We feel that is a true reflection of lack of inventory in this historically more affordable quadrant of the neighborhood.
In 2011 when the inventory started to sell like gangbusters, the number of cash buyers overtook those using financing. In 2012, however, the pendulum swung drastically, with the number of financed purchases skyrocketing to 71%. For the current year-to-date, cash purchases are a slight majority at 53% of the closed sales. We feel as though this is a reflection of the greater appeal of this quadrant to investors, particularly those who intend to rent their properties. It’s also consistent with the statistics if you break the whole neighborhood into price bands – 64% of homes under $250,000 have been cash purchases in the last 19 months.
Throughout the rest of the week, we’ll share the data on the other quadrants of the Old Northeast neighborhood. If you’d like more detail, or have questions, please don’t hesitate to contact us.