Archive for June, 2008
The Weekly Wednesday Wrap-Up - Hoboken Condo Sales Activity & Inventory
Categories: For Buyers, For Sellers, Hoboken Condos, Market Analysis
Hoboken Real Estate - Condo Sales and Inventory As Of June 11th
Studio & One Bedroom Condos:
Total Active: 156 Under Contract (Dabo’d): 77
Sold (Deals Closed) This Week:4
Average Sold Price: $430,562
New Listings This Week: 6
Two Bedroom Condos:
Total Active: 288 Under Contract: 113
Sold: 7
Average Sold Price: $594,285
New Listings: 21
Three Bedroom Condos or Bigger
Total Active: 52 Under Contract: 16
Sold: 2
Price: $836,500
New Listings: 2
Hoboken Condo Absorption Rate
Since we are almost at the end of the second quarter, here is a quick look at absorption rate, or the amount of unsold condo inventory on the market right now.
Studio & 1 Bedroom Condos
- These have been selling at a rate of about 6 per week. With 156 on hand, there are 26 weeks worth, or 6 1/2 months of inventory unsold.
2 Bedroom Condos
- These have been selling at about 7 per week. With 288 currently active, there is a 41 week or more than 10 month supply.
3 Bedroom Condos & Bigger
- These larger units sell the slowest - only .92 per week. With 52 active, there is a 56 week supply - more than a year’s worth of 3 bedroom condos (or larger) on the market.
For the sake of comparison, just last November - the Hoboken condo absorption rates were:
Studios and 1 bedroom units: 384 sold, 136 active = 4.25 month absorption rate
2 bedroom units: 515 sold, 243 active = 5.6 month absorption rate
3 bedrooms and bigger: 87 sold, 61 active = 8.7 month absorption rate
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Should Your Hoboken Grandma Run Your Hoboken Condo Association?
Categories: Finance, For Buyers, Hoboken Condos, Legal Matters
Grandma Ran the Building in the Old Days
Before I say anything else let me make it perfectly clear that I have nothing against Hoboken grandmothers. In fact, for some things, like watching the grand kids, making Sunday supper, there is simply no one better. I’m using grandma to make a point so hear me out. There are lots of small 4 or 5 family buildings in Hoboken that were at one time owned by Grandma. Originally, the extended family lived in them. Then they became rentals with Grandma as the landlord. Eventually the tenants moved out when a smart cookie advised Grandma to condo her building which is now worth millions. So Grandma sold off all the units but one. Now she lives in that unit with her new neighbors, the other unit owners around her. Her handsome profit is safely deposited in the bank. Since it was her building, she kept on ‘taking care’ of the building as she always had. At first, the other unit owners were happy to have her to look after things they just didn’t have time to deal with. Whether it was getting someone to shovel snow, clean the hallways or paint the front door, Grandma had the Hoboken connection and knew who to call and how to get it done.
Times Change - Grandma is in Over Her Head
Fast forward 10 years. Now each unit sells for close to half a million. One is for sale, has an accepted offer, and during attorney review the buyer’s attorney naturally asks the seller for the finanical statements and condo documents. Seller goes to Grandma but all she has is last month’s bank statement. There really haven’t been any formal condo association or board meetings. In fact, there really is no formal board. Grandma, 100% honest, just took care of things as they came up. The seller has nothing to produce for the buyer to show the history of the building, how it’s been maintained, whether it’s being run according to its budget since there is no budget. There is no real reserve fund and no real records of what maintenance has been collected or how it has been spent. Buyer walks away from the deal.
Let’s Teach Grandma a Lesson - Here’s What She (and the Condo Owners) Needs To Do:
1. Elect a board.
When a building goes condo, as soon as a majority of the units are sold, a condo board should be elected. Typically the legal documents that create the condo will dictate what that board has to look like. In small buildings there is usually one person elected president, another treasurer and a third may be secretary. Remember 8th grade history - checks and balances? The same idea applies here. You need a board to run the building. It’s typically required by the documents that created your condo association. If you don’t do it, a disgruntled condo owner could potentially cause problems for everyone.
2. Hold regular meetings.
Sure it’s difficult to find a day or evening when everyone can attend but serving food and beer often helps. Not only will the unit owners get to know each other, you are neighbors after all, but you can talk about what is going on in the building and what you would like to see happen going forward and make plans and develop a budget. Whether it is shopping for a better, more affordable insurance policy (your condo association does have insurance on the building, I hope) or deciding to put flower boxes in front of the building, meetings provide a forum to voice these issues. Again, the condo docs are going to tell you how often and what type of meeting are supposed to be held, and what notice of these meetings needs to be given to the condo owners.
3. Keep records.
The secretary is the one assigned with the task of keeping records of the board meetings and condo association meetings. In a small condo building, the board may actually comprise a person from each unit so there’s not a real difference between the board and the association. Not every word of the meeting needs to be documented, just the general subject of the discussion and any decisions that were made by the board.
Equally important is keeping financial records. Even if it’s as simple as writing it down in a notebook, you want to know where the money is coming from and where it is going to. Did everyone pay their maintenance? Late fees? Any special assessments? Have the bills been paid? There is insurance, utilities for the common areas, possibly snow removal, exterminators, handymen, an accountant. Did you know that condo associations have to file an annual tax return? Someone has to do the paperwork. As much as Grandma tried, you need real books and records.
Why, If You Own a Hoboken Condo, You Should Care
You Will Need Records To Sell Your Condo
Remember that a buyer is going to ask for these records. Hoboken buyers want to see how a condo building is being run. They want to assess the risk of maintenance increases and special assessments in the future. Has the condo association done renovations? For example, if the roof been replaced or common areas redone, showing that to the buyer and being able to account for how big (and small) items are paid for helps you sell your condo!
Buyers Will Want Your Condo More Than Other Hoboken Condos for Sale
There are literally hundreds of condos for sale in Hoboken at any given time. With so many units competing with yours, do you think a buyer is going to choose a unit in a well run condo with books and records showing the history of the building and its finances or a condo where Grandma just pays the bills as they come and can’t find the bank statements when asked? Buyers - here is a tip: when a building is professionally managed, there will be a sign in the lobby of the building with the name and contact info for the management company. Look for it when you are out looking at condos.
Too Much on Your Plate - Not Enough Time For Condo Business?
Hire a management company. There are lots of them that do a good job. They are not very expensive. They will add value to your condo.
The board still has to decide on a budget and only the board can decide on things like how much maintenance charges should be or whether to incur any significant expenditure. Someone from the board will also keep minutes of the meetings and they can be emailed to the management company for record-keeping purposes.
There are lots of more little things a management company can help a condo association do. For example, every time a unit is sold and there is a mortgage, someone from the condo association has to fill out a questionnaire for the bank. The management company does this.
Why A Well Run Hoboken Condo Pays for Itself
When it is time for you to sell, you can advertise to potential sellers that you have a “strong condo association”. Having a “strong condo association” and “professionally managed building” are very big selling points in the Hoboken condo market. It is equally or more important than having stainless steel appliances. Don’t kid yourself, the days of Grandma running the building are over. Do yourself a favor and get your condo in order.
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The Weekly Wednesday Wrap-Up of Hoboken Condos Sales Activity & Inventory
Categories: For Buyers, For Sellers, Hoboken Condos, Market Analysis
Hoboken Real Estate - Condo Sales and Inventory As Of June4th
Studio & One Bedroom Condos:
Total Active: 167 Under Contract (Dabo’d): 71
Sold (Deals Closed) This Week: 9
Average Sold Price: $442,083
New Listings This Week: 15
Two Bedroom Condos:
Total Active: 284 Under Contract: 111
Sold: 14
Average Sold Price: $539,778
New Listings: 20
Three Bedroom Condos or Bigger
Total Active: 52 Under Contract: 18
Sold: 1
Price: $870,000
New Listings: 0
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The May ‘08 Hoboken Condo Sales Figures
Categories: Finance, For Buyers, For Sellers, Hoboken Condos
Hoboken Condos - Prices Are Down in May
Monthly Hoboken condo sales according to the Hudson County MLS show that May was a good month for buyers. Average asking and median sales price dropped below $500,000 for the first time this year. The discount off of list (actual sales price vs. asking price) increased back to 2.41%, about where it was back in March.
The Good News (for Sellers) in the Hoboken Condo Market
Not everything favored the buyers in May. Price per square foot is up, the number of units listed is down, the days it takes to sell, on average, is also down. The average price per square foot for Hoboken condos in May was $532, the highest it’s been since January. The average number of days a Hoboken condo is on the market before going into contract is only 57. I work with many buyers who think they are going to outsmart the current market. They see a fabulous property in a good location that, in my experience, is priced correctly, but they either wait too long to make an offer (and miss out because the condo is already under contract) or they make a low ball bid thinking they are going to get a bargain (and miss out because the unit was well-priced and sold at or close to the asking price.) Prime Hoboken condo units are often under contract the week they hit the market. What is a prime Hoboken condo? One that offers good value and is in a good location. No matter what you may read or hear in the press, these units sell at or above asking price. Many disappointed buyers learn this lesson the hard way by losing out on the best condo they saw during their search. Think of the market as a bell-curve with the nicest, well-priced apartments selling immediately, not nice, overpriced apartments languishing on the market forever and the majority falling somewhere in the middle. Condos that are the cream of the crop, i.e., condo units that show well, are in good locations and are priced properly sell quickly - often very, very quickly.
‘08 Hoboken Condo Sales vs. ‘07 and ‘06
..
When analyzing numbers, it’s easy to make knee-jerk assessments based on a one-month-sales-activity “snapshot” but to make an accurate evaluation it’s crucially important to look for trends over a period of time. One needs to look at a period of months to determine if the Hoboken condo market is advancing, declining or stable. Average sales price may be up a little one month, down the next and price per square foot, may do the opposite. Year-to-year comparisons may demonstrate similar, very slight changes in both directions. In the stock market, that’s known as volatility. While the Hoboken condo sales market appears volatile in the short run, the overall trend has been pretty flat since 2006 and that is a healthy thing. Next month, at the end of the second quarter, I’ll post a chart that shows average sales figures from 2000 to date, by quarter. That will more clearly indicate the current trend in Hoboken condo sales. We are holding steady.
A Few Footnotes to Keep In Mind:
1. The Numbers May Change
The numbers come from the Hudson county MLS system. At the start of each new month, I look up the numbers for the month that just ended. When a property sale “closes,” the status gets changed in the MLS from “dabo” (under contract) to “sold.” Some Hoboken real estate agents don’t enter the change of status immediately. There is no reason for this or hidden agenda on the part of the agent. Closings that take place the last few days of the month may not get entered until the following week. I have entered what has been recorded in the MLS to date. About the second week of each month I check again to capture the sales that were entered late. So should you see my numbers change, that’s why.
2. New Construction is Different
New construction is often sold by the developer. The large buildings at Maxwell Place, for example, are primarily sold through Toll Brothers sales office. These properties are not listed on the MLS so those condo sales are not captured in these charts. Also, gut-renovations of rental properties (a different type of “new construction”) are often sold off floor plans and these units are listed on the MLS far in advance of construction being completed. When this happens, the days on market number is very high. The clock has started ticking before the construction began and sales aren’t recorded until closing - the wait for the Hoboken condos to be finished and granted a C of O can be a long one. It skews the numbers a bit when this happens. These units also tend to be priced higher than resales and that affects the average sales price figure as well.
3. Discount Off List is Only Partial
Usually, when a seller reduces the asking price on a condo, the listing gets pulled from the MLS and relisted at the new price and the days-on-the-market clock gets reset to zero. Discount off of list is calculated off the most current asking price. It does not reflect the original asking price of the property. To do that I’d have to look at hundreds of listings one-by-one and it simply takes too long. If the Hudson board wanted to present more complete information, they could show the original asking price and subsequent price reductions on the listing. Unfortunately, they don’t. A special report, called property history, has to be run on each individual property to see the earlier pricing.
4. What is Prime?
How does a buyer know it’s a “prime” condo? Simply by looking at enough Hoboken condos to be able to judge which ones offer the best value for the money. The most important factors are location and condition. Price per square foot comes into play but, often, things like the layout and use of space, what floor the condo is on, how big the building is, how strong the condo association is (and by this I mean financial strength) all affect that assessment. How many is enough? The more condos you see the better you’re able to compare. Most people only have a limited amount of time to dedicate to their search. My best advice is to work with an experienced, competent realtor whose advice and judgment you trust. Many people just use a friend, but we’re talking about an investment of hundreds of thousands of dollars here and your friend may not be the best choice. Look on Trulia or Active Rain and see who are the top rated agents in your area. The counsel of a good, experienced agent familiar with the area you desire may be what you need to land that prime condo and to pay the right price to get it. But that’s an article for another time.
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