2008 Nov 24th

The Hoboken Condo Market – How Bad Is It?

By Lori Turoff – [email protected]

Is Manhattan Real Estate Fairing Better Than Hoboken?

There was an interesting article in the Sunday NY Times Real Estate section about Manhattan condo & co-op inventory. The point made was that while prices have remained flat so far in the 4th quarter, inventory has risen indicating a sharp deterioration in the market as the economy and consumer confidence falls.

Unlike Manhattan, in Hoboken, condo sales prices dropped in October. Inventory has been growing steadily in Hoboken as it has in Manhattan. Back in February, when I started tracking the number of active Hoboken condo listings, there were 384 condo units for sale in Hoboken. Today there are 526 condos for sale in Hoboken.

The Hoboken Condo Buyers Are Missing

More startling, last year, during the month of October, 78 Hoboken condos went under contract and 62 Hoboken condo units closed. This October, only 18 Hoboken condo units went under contract and only 9 units closed. Due to the time lag between the time a property goes under contract and the actual closing (typically 45 days) the real declines will show up in the November and December numbers. The bottom line, however, is that the Hoboken condo market has come to a near stand-still. As long as the credit markets are frozen and consumers remain nervous about jobs, bonuses and the economy, the picture is not likely to change.

Is There a Silver Lining?

Is there a bright side to the market turmoil? Some owners simply must sell. They may be relocating for work, have outgrown their current space, are in contract somewhere else or the like. Buyers may find that they can get a Hoboken condo at a substantially discounted price right now. Assuming they are buying for the long term, say at least 5 years, that might not be a bad thing. Just as some people are forced to sell right now, there are buyers who need more space for a growing family or are moving to the metropolitan area and find Hoboken more affordable than Manhattan. Who knows, we may even find some of the people forced out of Manhattan will downsize and come to Hoboken.

  1. stan

    Interesting points Lori.

    You sight really does a good job of breaking down the Hoboken Market. Kudo’s

  2. Lori

    Thank you Stan. I plan to continue save for a little time out to prep for Thanksgiving dinner. It is a very interesting time we are in. Since you enjoy what you read here please tell your friends & neighbors.
    – Lori

  3. FAP

    As always Lori your site rocks.

  4. Lori Turoff

    I discovered a few weeks ago that another agent was took our weekend open house (which my partner/husband Howie creates) and posted it on his canned blog with his name on it. Yes, you can buy a blog written by a ghost writer. This week I found another agent’s website that has my blog on the first page in a spring widget. (A spring widget is like a little youtube of a blog). Unbelievable. Can’t these people have an original thought on their own without stealing our work?

  5. DmitriDmitri

    I would imagine it works as a free advertisement for you Lori, wouldn’t it?
    Here is something form AP
    “WASHINGTON (AP) — Sales of new homes fell in October to the lowest point in nearly 18 years while the median price of a new home dropped to the lowest level since 2004.
    The Commerce Department says new home sales decreased 5.3 percent last month to a seasonally adjusted annual sales pace of 433,000 homes, the lowest level since January 1991, another period when the country was undergoing a steep housing downturn.

    The median price of a new home sold in October fell to $218,000, down 7 percent from a year ago. It was the lowest median sales price since September 2004.”

    These are average around the country stats, which surprised me. I would expect prices to come down much further than 2004, at least to pre-boom levels of 2000. However in Hoboken prices have not come down even that much. We are nowhere near 2004-prices.
    Am I wrong?
    My feeling is this price-unraveling has not even started in Hoboken market.

  6. Doug

    Am I crazy, but I don’t think prices will fall to 2004 levels in Hoboken. I think there will definitely be some downward movement for the next year or so, but not to 2004 levels.

    Aren’t the dynamics of Hoboken VERY different than they were in 2004? Hoboken has created a definitely niche that has grown substantially even since then. Just look at the demongraphics of the city from 2004 to now…I would bet the average age has increased by at least 2 years (and that is a huge jump). I remember back in 2004 people still viewed Hoboken primarily as a “college” town, but in just a few years people view it as more of a viable option for young families.

    So, wouldn’t the trick be what would Hoboken prices have been in 2004 if they had the same dynamics it has right now? There is more demand (outside of prices) for Hoboken for a demographic that has more money and is willing to spend more money (I’m not talking about the money someone has from a job, I referring to the lifestage). Also, there is more of a trend of “urban sprawl” now then in 2004, also impacting the dynamics of Hoboken.

  7. Lori Turoff

    I agree Doug. I think a substantial influence on the increase in property values in Hoboken came from real changes (for the better) in Hoboken which have made it a much more desirable place to live. The market may fees some pain as borrowers have trouble getting financing but – and this is just my personal opinion – I don’t see prices dropping dramatically. A little, maybe, but not dramatically. We shall see.

  8. JCjc

    almost 1 point decrease in 30 year fixed mortgages yesterday! Buyers will really have to think they can time the market to not take advantage of these interest rates and continue waiting. I’m not saying prices wont continue sliding, but I am intrigued on how substantial this rate decrease means for home sales. Banks will start lending again soon, it just takes time for the $400 billion to flow through the system. I-rates may stay low for well into next year, which only helps the housing market.

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