Archive for March, 2008
The Weekly Wednesday Wrap-Up of Hoboken Real Estate Sales Activity
Categories: Weekly Wednesday Wrap Up
Hoboken Real Estate - As Of Wednesday, March 19th:
And you think you’re having problems selling???
Studio & One Bedroom Condos:
Total Active: 163 Under Contract (Dabo’d): 62
Sold (Deals Closed) This Week: 5 Average Sold Price: $413,000
New Listings This Week:12
Two Bedroom Condos:
Total Active: 261 Under Contract:98
Sold: 8 Average Sold Price: $571,375
New Listings:23
Three Bedroom Condos or Bigger
Total Active: 50 Under Contract:11
Sold: 0
New Listings:5
One Family Houses
Total Active: 10 Under Contract: 4
Sold: 0
New Listings:2
2 - 4 Family Houses
Total Active: 19 Under Contract: 11
Sold: 0
New Listings:5
So What Do The Real Estate Activity Numbers Tell Us?
There is more inventory on the market, but just a little. The number of properties selling has been holding steady. So we have a very slight, gradual build up of inventory. What would be very informative to know is how many properties for sale have had to reduce the asking price? Unfortunately, our MLS rules don’t allow us to track that figure accurately. Unlike many other places in the U.S., here in Hudson County, if an owner wants to drop a price and hide it from the public, all they have to do is withdraw the listing then relist it at the new price. Moreover, the number of days on the market resets to zero. A bit misleading, no? In many other places, the MLS rules require that once a property is withdrawn, it may not be re-listed for three full months. No monkeying around! Overall, we are fortunate. The Hoboken real estate market is still comparatively strong and healthy. It will be interesting to see the March end numbers in a few weeks. Stay tuned.
Absorption Rate is Good Indicator of 2 Important Facts: Size Matters & We’re in a Buyers, Market
Here is a look at the absorption rate of Hoboken condos by unit size. Based on the above inventory numbers, and looking at sales by unit size for the past month, we have the following supply of inventory on hand:
Studio & 1 Bedrooms - it will take about 30 weeks to sell all the “for sale” units at today’s sales rate
2 Bedrooms - it will take about 31 weeks to sell all the “for sale” units at today’s sales rate
3 Bedroom & bigger - it will take about 43 weeks to sell all the “for sale” units at today’s rate.
Anything over 5 months, or 20 weeks is considered a buyers’ market. So not only are we in a buyers’ market, the bigger your unit, the longer it will likely take to sell.
See also: Jersey City versus Hoboken Condos Absorption Rate Battle
Remember - the Wednesday wrap up figures represent only properties listed and sold on the Hudson County multiple listing service. They do NOT include new construction sold directly by developers such as Toll Brothers.
Compare to last week. Compare to March 12th and inventory. Compare to March 5th. Compare to Feb. 27th. Compare to Feb. 20th. Compare to Feb. 13th.
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Fed Drops Rates - 30 Year Fixed at 5.74%
Categories: Finance, For Buyers, For Sellers
Good News For Buyers - Real Estate Rates Tumble
Inman News has just reported that real estate rates tumble.
The 30-year fixed rate is at 5.74%;
10-year Treasury yield at 3.31%
Read the full interest rate story here.
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Hoboken Condo Buyers’ 7 Biggest Mistakes
Categories: For Buyers, Hoboken Condos
1. Location Location Location
Location has been, and always will be, one of the most important factors in any real estate deal. From the time Hoboken was settled, the place to be was on the waterfront. That hasn’t changed. If you’re buying a condo in a marginal part of Hoboken, no matter how nice the particular unit, you’re still getting marginal property. In an uncertain economic environment, buying a Hoboken condo in the most desirable part of town, Hudson Street, Bloomfield Street, Garden Street, Hudson Tea or the Shipyard, is your best hedge against a potential downturn. So with all the inventory currently on the market why are you even considering Jackson or Harrison?
2. A Few Thousand Dollars Over 30 Years is Not Worth Much
Buyers get all hung up over a few thousand dollars. They will be negotiating with a seller on a half-million dollar condo and walk away from the place of their dreams because they are a few thousand dollars apart. Even for $3,000, we’re talking about less than 1% of the purchase price. Moreover, when you add that $3,000 onto a 30 year mortgage and amortize it, the difference in the monthly payment is negligible.
3. Know What You Can Afford
Many buyers start the house hunt without ever speaking with a financial advisor, bank or mortgage lender. They have no real idea of their budget, how much they will need to put down in cash, or how large a mortgage they can manage. They either look at condos that don’t meet their needs, not realizing that they could afford to spend more or they look at condos beyond their means and then are dissatisfied when they take a step down to those within their budget. Know your numbers before you start looking!
4. Be Committed
If you are really serious about buying a condo in Hoboken you need to do some homework. In addition to knowing your budget (#3), you should have a game plan and follow it. When you go looking at condos, bring a camera and a notebook. Take pictures and take notes. After a few dozen, they will all start to blur together in your head. Look in one area at a time. Start with the nicest part of town you can possibly afford (#1) and exhaust it before moving on to lesser areas. When you see a condo you like, go back to see it again during different times of day - in the morning to check out the light, during rush hour to assess traffic, after school to see where the kids hang out. Make a written list of your priorities and rank them. Compare your list with your spouse’s. Decide what’s negotiable and what’s not in advance. Don’t waste your time looking at units that don’t match your agreed-upon, prioritized needs. If you have a realtor who is taking you to see units that don’t have what you’ve made clear you want in a condo, find another realtor!
5. Beauty Isn’t Everything
As much as everyone wants a gorgeous condo, some units just don’t show well. You have to use a little imagination. You’re not buying the sellers’ furniture. Paint is cheap. I see buyers overlook great properties because they can’t visualize the potential. Often, the seller has failed to do the work needed to market his or her property. A unit that shows poorly may actually benefit a buyer. If the condo has been sitting on the market for a while, the seller may be getting desperate. He may be more willing to accept a low offer.
6. Beauty Isn’t Everything II
When you find a condo you like and are ready to make an offer, insist that the seller provide you with the financials for the condo association. So many buyers are fooled by the pretty appearance of a condo only to be surprised down the road when they learn the association is practically bankrupt and they are looking at a hefty increase in their maintenance. Not all Hoboken condo associations are well run or well funded. Many, especially in smaller buildings, have no reserve funds. So get the whole picture before you move forward.
7. Use a Hoboken Lawyer and Local Bank
Hoboken is a peculiar little city with it’s own way of doing things. Local real estate lawyers are familiar with the peculiarities of doing a real estate deal here. They also all know each other and have likely worked together before. Using your cousin from out of town is not going to save you anything in the long run. The same problem arises with large, national banks. They are used to lending according to certain standards and few Hoboken condo buildings meet those requirements. Yet the local lenders write mortgages for Hoboken condos all the time. Haven Savings or Hudson City Savings Bank are way less likely to have a problem with the condo questionnaire that shows that the building only has 3 units than a Citibank or Chase.
See also: Five Familiar Problems When Buying Hoboken Real Estate
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Learn The Little Known Dangers Of Small Hoboken Condo Buildings
Categories: For Buyers, Hoboken Brownstones, Hoboken Condos
Would You Buy a Condo in A Building With Only 3 Units?
If so, you better keep reading. Hoboken has very few co-ops. Most units in Hoboken are condos. A condo building is run by the condo association. The condo association is made up of the unit owners. Each unit owner has a vote. Sometimes, that vote is proportional in relation to the size of the unit owned. Other times, it is 1 vote per unit. So what’s the problem with that, you ask?
Hoboken has many older 3 and 4 story homes that have been converted into 3 and 4 unit condos. Let’s say you’re about to purchase a unit in one of these 3 unit buildings. You would own 24% of the total square footage of the building, your upstairs neighbor owns 24% and the family downstairs in the duplex has 52% of the total. So your vote is worth 24%, the upstairs vote is worth 24% and guess who controls the building? Or the same owner owns two floors and now the third floor unit is for sale. Each condo unit gets one vote. Again, your soon to be neighbor makes all the decisions.
Why Should You Care?
Living in a condo building requires cooperation among unit owners. It also requires decisions to be made that effect everyone. Think about who decides how much the reserve fund should be, whether special assessments will be imposed or whether maintenance fees ought to be increased, and if pets are allowed. When one unit owner has a controlling interest, all these decisions can be made by that owner. What if you prefer to live in a well maintained, clean building but your neighbor could care less? If they decide how the condo fees are spent they may not be willing to repair the roof, paint the common areas, clean the hallways or install new lightings. Owning property requires maintenance and upkeep. Improving property costs money. If you’re not on the same page as the neighbor with the controlling vote, you have no recourse except to make improvements and repairs at your own expense. Or you may have a really difficult time selling when your building looks like a money pit.
Even Under The Best Circumstances, How Big Is Your Safety Net?
If you and your neighbors all get along famously and agree on exactly how your condo should be kept and financed there is one more thing to consider. When you purchase in a condo building with 10 or more units, not only is the governance of the condo association likely to be more of a democratic and participatory process but there are more unit owners chipping in to handle maintenance costs and repairs when needed. Many small Hoboken condo buildings have very meager reserve funds. Often, they are no more than a few thousand dollars. Smaller buildings are more commonly self managed. They tend not to have regular meetings, don’t keep minutes, and sometimes have no budget. Of course, these are all items your attorney should be checking into during attorney review. Unfortunately, it is often overlooked.
How to Protect Yourself
Are all small Hoboken condo buildings to be avoided? No - some of them are fine. They have attentive owners who run the association properly or pay a management company to do much of the work. There are condos in Hoboken with smart unit owners who have established adequate reserves and prepared a realistic budget. The voting rights in some small Hoboken condo buildings are allocated 1 vote per unit specifically so that no one unit owner controls everything. This is set out in the condo documents - the certificate of incorporation and the bylaws. The important lesson is that you ask the right questions before deciding to make an offer on a condo unit in a small building. Know what you’re getting into before you buy.
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Sign, Sign, Everywhere a Sign!
Categories: Crazy Ball, Design, Neighborhoods
Hoboken Streets Are Over Run with Signs - It’s Time For a Change.
Every Saturday and Sunday morning, you can watch as Hoboken realtors scurry around town, putting out sandwich board signs on street corners all over Hoboken to advertise their open houses. These signs are supposed to direct people to the open house but there is no evidence that this is at all effective. Worse, when it is windy, the signs often end up in the street instead of on the corner. Cars drive over them, people have to walk around them, and to say the least, they can be very unsightly.
According to most realtors, these signs are a necessary part of doing business. Yet in today’s internet world, that’s just nonsense. All of the open house information is readily found on-line at sights like craigslist, realtor.com and more, and it’s typically in the Hoboken Reporter classified section. For anyone who really cares, finding where the open houses are being held is pretty simple. The one thing the signs seem to do is make the seller feel all warm and fuzzy. So as long as one agency does it, the sellers will pressure every agent to do it. How do we get it to stop? Don’t let anyone do it! Or at least make them do it in a better way.
What’s the Alternative? Kiosks!
Why not have the city install a central kiosk or two, in high traffic locations that don’t block the sidewalk, where each agency can rent ad space? In fact, the city could use the revenue improve the street scape of Hoboken. Let City Hall fill some pot holes or plant some trees. The City has an interest in keeping the streets clear for pedestrians and ensuring the safety of its drivers. Keeping these signs out of the way and out of the street and having them placed in designated areas would surely further that purpose. It would also make Hoboken look a whole lot nicer.
Maybe even a little bit Parisian?
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