Categories: Hoboken Condos
Warren Buffett is a Smart Guy – He May Know a Thing or Two About Hoboken’s Condo Market
My morning ritual is to take my dog to the dog run, sit down with my go-cup of coffee and open to the NY Times Op-Ed Page. The other day, Warren Buffet wrote a piece about his take on our current financial mess. He said something that struck me as very wise for the times in which we find ourselves. He said “be fearful when others are greedy, and be greedy when others are fearful.” He was referring to his recent purchases of US company stocks. His words, however, rang true to me when thinking about the current state of the Hoboken real estate market.
Fear Can Lead to Buying Opportunities
Over the past few weeks I’ve seen huge price reductions on Hoboken condos. Some of these properties were vastly overpriced and should have had the asking price slashed. Others, though, were not. Fearful sellers cut prices in reaction to the negative headlines. For example, let’s consider a beautiful 3 bedroom condo with a private yard in the best part of town. It’s in mint condition in a stable condo building with good financials, not often the case in Hoboken. The sellers were within inches of a deal on Sunday, September 14th. Monday the 15th Lehman Brothers went under and the panicked buyers walked away from the deal. Since then, the list price has been reduced by almost 10% . Perhaps this type situation too, presents a chance to buy a slice of America’s future at a marked-down price.
Sometimes There Is Innate Value in Real Estate
Some buyer who follows Mr. Buffett’s wisdom will buy a beautiful home at a considerable discount from what it would have sold for just a few months ago. The home has not changed – just it’s perception of value has. And unlike stocks, real estate, the actual bricks and mortar assets, are of finite supply. This condo is large enough for a family. A buyer seeking a home, and looking to live in it long-term, may be getting a great deal. Mr. Buffett says he cannot predict short term movements of the stock market. Nor do I presume to know what is going to happen in the Hoboken condo market over the next month or even year. But like Mr. Buffett, I believe that in the long term, the Hoboken real estate market, like other markets, will rebound. Today’s unafraid buyer may just turn out to be tomorrow’s happy seller.