2009 Feb 6th

Hoboken Condo Sales – End of January 2009 Numbers

by LORI TUROFFhoboken-dogs2

January Condo Sales Figures for Hoboken

The average price of a condo sold during the first month of ’09 is suprisingly higher than it has been for the past three years. It’s also better than it’s been for the past 4 months. In fact, it’s better than it had been for most of the past 4 years. To really make sense of an average, though, it helps to look at what actually sold. There were a good number of larger, ‘high-end’ luxury units at Maxwell Place and The Garden Street Lofts. These units tend to skew the average upwards.

So let’s look at the price per square foot number, which should give us a more accurate picture of the current state of the condo market, at least in terms of pricing (pay attention – this will matter later.) In January, the average sales price per square foot was $510. If we calculate the mean for the 3+ years of data on the chart we get $529.60. So how does that compare to where we are now? Well, the standard deviation of this collection of sales prices is $22.09. January’s $510 is just slightly more than 1 standard deviation below the mean. Even if you don’t ‘get’ statistics, this basically shows that there have not been huge swings in Hoboken condo prices on a per square foot basis over the past four years.

Even looking at actual sales prices, we get a very similar result. The mean price for the 3+ year time span is $524,779. Let’s make it $525K for the sake of simplicity. The standard deviation is $30,700. So again, the swings in price over time have been quite small. January is almost 2 deviations above the mean. Overall, however, Hoboken condo sales prices have not varied much.

So What’s The Problem?

Well, maybe the problem is that prices should have varied more than they did! When you forget about price and look at market activity there is a whole other story being told. In a nutshell – nothing is selling. Now it’s possible part of the inactivity has to do with the credit crunch. Some buyers may be having problems getting a mortgage. But it’s also likely that had sellers been more willing to lower prices more, and faster, their properties would have sold and we wouldn’t have this huge inventory buildup of condos we are now facing. Look at the number of units listed and units sold lately:

Someone made a great comment the other day. They said “the dog is chasing its own tail”. Sellers are in denial so they will lower their pricing expectations a tiny bit but never enough to matter. We go on listing appointments with sellers who just love what we have to say until we get to the price. Why these agents keep agreeing to take overpriced listings is just beyond me. Until the market comes back into price equilibrium – i.e., buyers are willing to pay what sellers will accept, there will be no sales. OK – very few sales. It’s basic economics folks. Pull out that Econ 101 text book. Nothing has fundamentally changed. I’d love to hear what you think it will take for sellers to give up the “I’m going to make a 20+% profit on a property I bought in ’04” fantasy. Thanks for reading.

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  1. D$

    Lori,

    A smaller sample size will typically result in more variability. Therefore, I’d be interested in seeing medians too.

    I personally think Hoboken condo prices have a long way (down) to go, and eventually sellers have will to capitulate.

    The numbers at today’s prices in light of today’s environment just don’t work for your average buyer. For example, Joe and Jane Yuppie decide to consider buying an “average” Hoboken condo for $550,000. They also realize that they should spend no more than 30% of stable (non-bonus) take-home pay on housing and they need to put 20% down to qualify for a mortgage and avoid costly PMI that may not go away quickly if appreciation lags for some years. That’s a $110,000 down payment, excluding moving / closing costs, that Joe and Jane must pony up at a time of great economic uncertainty. That also means Joe and Jane would need to take home about $10,400 per month (cash), which equates to a gross household income of $158,400, to make the payments without overextending themselves. Economically (net of tax benefit and opportunity cost of investing $110,000 in a high-yield savings account), the true cost of the condo is almost $3,000 per month. Actually, it’s more if you amortize the entry / exit costs (closing, realtor, etc.) that you wouldn’t encounter with a rental.

    If you consider that the average rental price of an equivalent unit to Joe / Jane’s is $2,700 [?], you’re looking at ~ (11%) further decline in the price of that “average” condo to bring it into parity with the equivalent rental. In theory, it should cost more to rent as landlords’ returns should be dialed in(so “parity” is generous).

    Lori, you talk about the “intangible” benefits of buying, but you’re neglecting the most tangible benefit of renting: the ability to get out soon when things don’t go as planned. If either Joe or Jane lose a job, they have $110,000+ of additional liquidity and the ability to get out of their unit quickly if unemployment occurs and persists. If they’re rational, they’d take optionality right now over the ability to customize their domicile.

    From a seller’s perspective, my suggestion would be to take their lumps now when they can break even on their ’04 purchase instead of waiting for things to potentially get worse. Furthermore, realtors need to stop giving these people false hope just to get a listing – that practice just ends up hurting everyone.

    Enjoy the weekend!

  2. Tiger

    D$, what you say might be true, however I have to point out a few things:
    – High yield interest accounts are a thing of the past. I have an HSBC online account, it used to be %5 back in the day, now it’s a bit over 2%, and that’s 7X the national average.
    – The condo Joe or Jane Yuppie are buying will probably be a started 1 BR condo, $300 – $380K. Unless Joe or Jane are loaded, or have a partner, then they might invest in a 2 or even 3 BR for $550K. BTW, several of my friends (couples) bought a 1 BR condo together, when splitting a 2K+ mortgage payment between two, it’s not bad at all.
    – Yes renters can exit at any point, it makes sense. But one factor to consider is if they are willing to exit. I have some friends who got laid off months ago, and really have no material attachment to the place; renting, no cars, and just their own Ikea furniture. They are still here, still actively looking for a job and collecting unemployment. Part of it is emotional, another part is that things are WORSE in other parts of the country. Regardless of how bad things get here, we are still very close to one of the biggest job markets. I also think Hoboken has the Jersey job market advantage; a lot of my friends work in Parsippany, Morristown, and other areas you can easily access via 1&9 and 78.

    What I’m trying to say really is, you take chances and you make compromises whatever route you choose.

  3. Mark

    D$,

    Interesting piece and I agree with most of your comments. My gut feeling is that when spring comes around (with the additional inventory), we’ll start to see prices drop by at least another 10-15%.

    I totally agree with the quote “realtors need to stop giving these people false hope just to get a listing”, but then again, realtors also need to make a living. Although some of them flat out will do or say everything for you to buy. That’s why I enjoy reading Lori’s comments: it’s refreshing to see a realtor who is actually honest! :)

  4. Buyer

    As an owner looking to upgrade to a larger place, I think it may be a waste of time to try to buy a resale and instead focus on new construction. As a fellow owner, I really dont want to sell and take a bath. I know that I will have to wait it out for a few years and I may take rental losses along the way. But, taking a 10-15% haircut would be pretty painful. However, as a buyer, I dont want to buy at these prices. In fact, I really dont want to buy anything that I cant cover at market rents. Since owners wont sell at these prices, you wont see as much movement as some would hope. However, I think that the new construction will get discounted heavily pretty soon. If you have to move a bunch of units to repay the banks, thats a different story. If I were a builder, I would be focused on trying to repay my lenders, knowing that if I dont, I might not ever build anything again… I am curious what others think.

  5. Tiger

    Buyer, you yourself are an owner and you pretty much you summed up my theory about this new market. You are willing to rent your place, even at a negative cash flow, than sell it for a one-time big time loss. My theory is that you are not alone, and in fact, there are many other owners who can rent (especially if they bought pre 2004) for at least their monthly payment or even more.

    SO who’s left? People who HAVE To, and I mean HAVE TO sell. Due to the inactivity they will be forced to cut down their prices even further, people who do not ‘have to’ sell will hold off even further, then prices drop some more, people hold on to their properties even closer. Yes, some will move from the ‘will sell if I get a good offer’ bin to the ‘have to’ sell, but I suspect many will do.

    As for builders, it goes two-ways; it doesn’t look like Toll Brothers or any other builder is starting another gigantic building anytime soon. Some will be forced to sell, and will discount their properties. However, just like you are sitting in your condo crunching numbers to see if it’s better to rent it out or sell, they probably have analysts who continuously do a cost/benefit analysis of the market.

    800 Madison, Juliana, and A LOT of other buildings converted from condos to rental. It is an option for them too don’t forget. Also, banks do not want construction companies to go out of business after paying all this money, and if a bank takes over 6 months to approve a ‘short sale’, imagine how much it will take them to accept a loss (because if they are to sell at heavy discounts, that means they will probably have to sell for less than what they owe). That’s why, I think banks might be willing to work out an agreement that allows them to rent the units out.

    Tough times all around, and good luck bro!

  6. Lori Turoff

    To the point that sellers can rent instead of selling: You cannot talk about what it will take to cover your costs (of buying) at a market rent unless you know how much you put down and how big a mortgage the tenant’s rent has to cover. You could buy a $500K condo for all cash, rent it out for $2,800 and be cash flow positive from day 1. It all depends on leverage. Alternatively, if you bought that same unit pre-construction back in ’03 or 04 for $300K and have a $240K mortgage, you’re doing OK by renting it out. Plus you still get to depreciate the property and write off the mortgage expense. You can’t buy at today’s prices, put down 10 or even 20% and expect your rental income to cover you even before taxes.

    To the point that you can rent rather than buy: There are transaction costs in renting, too. Realtor fees, security deposits, moving companies. There is also a huge difference between living in a building that is a rental building and one that is a primarily owner-occupied condo building. If you don’t believe me, give me a few hours on any saturday afternoon and I’ll take you on a little tour. Do beer bongs float your boat? Then maybe the quasi-dorm lifestyle of some local rental buildings is right up your alley. I don’t see that in the condos I’m in every day.

    Jane & John Doe first time buyers are not buying a 550K 2 bedroom. They’re buying a 350K 1 bedroom or 425K 2 bedroom. If they’re each making 70 to 100K a year, they don’t have a problem with the monthly payments. It’s the lack of savings mentality that’s come back to haunt them. They don’t have the down payment. The two bedroom buyers of the 500 to 700K units tend to be selling and trading up or working in fields where they each pull in 100K plus. Starting salaries at NYC law firms are still around $150K right out of law school, no? Plus a start-up bonus. Having lived through the law firm layoffs of the late 80’s when Drexel went bust, the law firms don’t lay off “en masse’. They delicately hint that it’s time to start looking but keep the paycheck coming until another job is secured. I suspect there are plenty of mid-level associates who have no trouble with Hoboken condo prices.

    As for new construction, Toll Bros. won’t even discuss price. No negotiation. They can’t be hurting too badly. And today’s Reporter had a story about the Rockefeller group buying up the north of Hoboken (14th to 17th St. by the bridges) and building mixed-use high rises with hundreds of condos included. I don’t see the discounts except in the worst parts of town – for example, the Ariel and the Emsee on Jackson St. slashed prices when they couldn’t sell. Velocity went rental – no surprise given the location. The 800 Madison complex was always marketed as a rental.

    Remember folks, not all of Hoboken is going to be affected equally by a downturn. The prime locations will be prime no matter what. That’s why Toll bought them in the first place.

    Thanks for all your thoughts.
    – Lori

  7. D$

    Additional thought per my earlier post…The biggest benefit to buying a home is not the tax deduction (which is priced into home values) or the prospect of appreciation (which cannot be relied on for the next few years). It is the fact that you’re (largely) fixing your monthly housing cost for the duration of your stay. Over 30 years, the value becomes less and less significant relative to your income. Remember that you lose that benefit when you buy and trade up everytime you accumulate enough equity to put 20% down on a bigger place. I could make a very good argument for why buying a “starter home” in Hoboken is a bad idea. Better to save up for something more permanent (which is hard for “Generation Now”, of which I’m a member)

    Tiger – I assumed 2.25% for my opportunity cost of a down payment (ING Direct’s around there, although Flagstar Direct is at 3.00% now). Per the analysis, I can plug in any condo size / purchase price assumption you want, and I guarantee you that renting at current price levels will always economically trump buying at current price levels for equivalent units. Also remember that your unemployed friend, while choosing to stay in the rental, has optionality. Add option value to pricing disparity and buying now is kinda dumb for the vast majority of folks.

    Lori – I have yet to see beer bongs in 333 River, but I’ll keep my eye out for them. :-) Remember, this recession is expected to heavily hit the affluent. American Express is reporting an unprecedented scaleback in charge card activity. The usual buyers of properties in “prime locations” are not going to be there in force in 2009. Agree that not all of Hoboken will be affected equally by a downturn, but – from Maxwell Place to a fourth-floor walk-up on 3rd / Harrison – no one will be completely spared. Last of all…just because someone can afford the monthly payments, it doesn’t mean they should take the plunge and buy.

    Thanks again for this wonderful blog. Not trying to be adversarial, and I appreciate all you do.

  8. CR

    Lori,
    Great site! Thank you for compiling all of this information re Hoboken condos.

    You may be interested to know that mass and sudden layoffs are becoming very popular at law firms nationwide, including New York firms. As a result, it can be very difficult, if not impossible, to secure another similar job when most firms are downsizing (or at least not expanding). This includes many of the large NYC law firms that pay the high starting salaries you referenced.

    The following blog tracks this trend: http://abovethelaw.com/layoffs/

    How, if at all, do you think this will impact Hoboken prices over the next several months, i.e., if at all different from your prior advice and prognosticating? Thanks again!

  9. Lori Turoff

    Guys, I don’t take the comments the wrong way at all – I love that we’ve got a dialogue going! As long as everyone is respectful, no offense taken, no comments edited or deleted.

    D$ – Let me know when you find the beer bongs. My husband is interested : )

  10. Lori Turoff

    Wow – glad I left the big law firm when I did! I don’t doubt that there are problems in law land. But I also saw in today’s NY Times a comment that the way for the honchos trying to live on a 500K pay limit in the city may be for them to move to Hoboken . . . (Sunday Styles)
    http://www.nytimes.com/2009/02/08/fashion/08halfmill.html?_r=1&ref=todayspaper

    So yes, there may be fewer 1st year associates or mid-level associates in the buying market here in town but perhaps the partners will take their place? We can only hope.

  11. Tiger

    OH.MY.GOD.

    Are you telling me that someone making millions of dollars cannot even save for a rainy day? Seriously, what kind of culture do we live in? No wonder why banks offer horrible rates for savings account, because no one uses them (or they don’t want you to use them, they want you to spend).

    And we blame average Joe for being greedy and buying a home they cannot afford?

    Anyway, yes it will be interesting to see how many people will need to ‘downscale’ to Hoboken :)

  12. Tiger

    D$, I’ll take your challenge.

    Consider a **big** building where rents for 1BR are between $1600 – $1800 (Depending if the unit is renovated or not), Condo prices for those units are now $360K or so. Run your model :)

  13. Lori Turoff

    Tiger – D$
    Where is this “big” building that has 1brs for $1,600 to $1,800? That’s about what applied charges if you know someone and can get in to their properties. Certainly not 77 Park, 333 River, The Sovereign. One BRs in those buildings are more like $2,200 and up. And a $1,600 to 1,800 rental is more like a $300,000 to $325,000 condo. So please use realistic numbers. If you want real comps, I’m happy to provide. Remember GIGO. (garbage in, garbage out).
    I look forward to your analysis.
    – Lori

  14. Lori Turoff

    PS – I mean Applied subsidized housing.

    Here is the link to 333 River’s prices and the same site has the Vanguard, Independant and the Sovereign: http://www.appliedco.com/properties/rentals/333RiverSt.shtml

    Here’s the link to 77 Park:
    http://tinyurl.com/acmacz

  15. Buyer

    I really want to buy a 3+ BR, but I dont want to lose money (again). I bought in 2006 and got a “good deal.” But, its 2009 and I dont see how I can get “whole” for at least another 2-3 years in this awful economy. I am really happy for the folks that bought before 2004 and stil live in their places. I would be happy to buy and put 20% down if I knew I could rent it out and cover interest, taxes and condo fees (not principal). I can rationalize that rents need not cover amortization. But, it seems like its still impossible to do that. So, although I have 20% and can afford a more expensive 3 BR, I really am scared to death to make such a purchase. Additionally, what if I lose 10%? On a “discounted” $1 million property that could be a $100K hit. What if I lose my job? I think we all would be crazy to think that couldnt happen to us in this economy. So, if I cant at least cover the cost of ownership (interest, taxes, condo fees NOT principal), then it simply doesnt make sense for me. Anyway, I think that I am your *average* higher end Hoboken buyer… someone who knows the area, really likes it, and wants to upgrade BUT can’t make sense of it right now. I just feel sorry for the folks that are losing their jobs and upgrading is the least of their worries…

  16. Buyer

    BTW Lori, GREAT website!!! Thanks!

  17. Lori Turoff

    Buyer – I’m not clear about what you’re saying. If you got a good deal in ’06 and sell in ’09, are you making a profit? If you sell now and buy now, the lower price you might get on the sale side is “evened out” by the lower price you’ll be paying on the buy side, no? So your transaction is pretty much a wash (or better if you got a deal).

    You would be happy to buy if you could rent the new place out with a 20% downpayment? That’s not realistic in any market. You typically cannot buy an investment property with so little cash down and expect to be cash flow positive on day one. You’re simply too highly leveraged.

    If you lose 10% on your 3BR aren’t you also going to lose 10% on your smaller unit (if you don’t trade up)? Sure the absolute loss may be greater on the bigger unit but you’ve had use of the bigger unit in the meantime. That must have a value.

    If you lose your job don’t you have the same problem in a small unit or a big unit?

    I think the only way to have maximum security is to pay cash. Then you can carry your place in almost any event if you only pay taxes and maintenance.

  18. Buyer

    Sorry Lori, here is the clarification: At the time it seemed like a *Good Deal.* In early spring 2006, I bought at $475K and it appraised at $525K. Then I re-financed in 2007 and it appraised at $550K (which was a stretch but it wasn’t crazy seeing the comps). Now, I doubt I could get $475K. In this market, my guess is that its worth $425K. I could list at $475K but I dont want to waste anyone’s time. So, although I bought with 20% down, if I am honest with myself, I think I have lost half my equity. Perhaps, its not realistic to be able to rent out a place and cover rents, but some of my colleagues at my office did just that, when they bought in Hoboken around 2003-2004. So, I just feel like I need to wait. So, if the prices come down, people like me will re-enter the market. But at the same time, I would rather incur 10-20K of rental losses for a couple of years hoping that I can eventually get out whole. I wouldnt mind taking the loss if I could immediately roll it into a new property, but the market doesnt seem liquid enough to pull that off. So, you are right about the maximum security! If I was like 50% levered on my home, life would be alot easier! Maybe in a few years :)

  19. Tiger

    Hi Lori,

    You’re the expert, but I’m talking about the Citadel.

    Rents: http://www.libertyrealestate.com/public/userListings.do?user.userID=25070

    And I think there was a unit listed (450 7th street, unit 1Q) for sale a couple of weeks ago. I’m curious to see what happened to that, since it seems to have vanished from the weekly analysis since. It was listed for $359K, which actually is a sale at loss since this was bought in 2005 for $440K+!

  20. Mark

    I went to some open house today and my wife and I are considering placing a bid on a Willow Terrace property. But just like ‘Buyer’, I am scared to buy something now that will be worth less over the summer, the prices still seem to be high and I wonder… do I still have a job in a few months? Currently I’m renting and I have enough money in savings for a down payment… Or as an emergency fund.

    So count me in also as someone who’s a pre-qualified *average* higher end Hoboken buyer, who doesn’t like today’s prices and is afraid to step in.

    Hopefully some sellers will read this blog and start realizing what’s going on in the market. And, great website, Lori!

  21. Lori Turoff

    The Citadel (450 7th St.) is a condo building – so any rentals are individual rentals by the owner. That’s not quite the same thing as a ‘rental building’.

    Unit 1Q is under contract. It was listed at $359K. It was bought in ’05 for $430K according to the tax records. The owner is a realtor. Why he would sell his unit at a clear loss is beyond me. It was priced under market and sold in 6 days. Maybe he had tax reasons to do so?

    The most recent rental in the building was a 630 sq. ft. 1br with parking listed at $2,250 that rented for $2,200 in 45 days.

    There has been another, slightly bigger 1br without parking listed for $1,700. For some reason, the pix won’t load so I can’t see how they compare.

    There are a bunch listed for rent on the Liberty site for which you provided the link. Interestingly, that agent, Michael Berney, listed a bunch of units in the building’s early years. He still owns a number of units in the building. He may be renting his own units out at below market. There are three other big owners in the building – someone named Hugh Hotham, a company named Shafran Associates, and Frank Raia (any relation to the local politician ‘Pupie Raia’?). Some units are owned by both Raia and Shafran. At a quick glance it looks like these owners have more than half the building.

    I don’t know any other details, but that is not very typical. I think to have a more realistic analysis you need to take a look at a more commonly found situation – i.e, compare a true market rate rental in a real rental building with a market rate condo. You don’t know that the deals being done at the Citadel are arms lenth or what the back story may be.

  22. Lori Turoff

    Thanks Mark.

  23. Tiger

    Hi Lori,

    YOU ARE THOROUGH! Thank you so much for the info.

    I actually live in that building (And a proud owner of a 1br). To answer your questions, yes Frank is Frank ‘Pupie’ Raia, how lucky am I to be neighbors with a local politician lol. He is also the condo association president. When it comes to citadel, he is actually quite the expert, aparently he went to school there (?) and he was one of the developers who converted it into condos in 1986.

    I am quite surprised to see that stunning 1Q unit go for under market price, even with the drop, it was still incredibly underpriced! I wonder why.

    Thanks again, I am addicted to your blog!

  24. Lori Turoff

    LOL, Tiger. There are way worse thing to be addicted to!

    I wish I had bought 1Q. That was the ‘steal’ my buyers keep asking for. So they ARE out there (although you have to be first in line).

    So Pupie must have a pretty tight grip on the building. Just for kicks, I’m going to ask the listing agent about the 1Q deal. Let you know what I learn.

  25. DKzzzzdkzzzz

    You really need to fix the border problem with this blog.

  26. DKzzzzdkzzzzdkzzzz

    Don’t worry about Hoboken condos:
    http://finance.yahoo.com/tech-ticker/article/169781/Peter-Schiff-Stimulus-Bill-Will-Lead-to-%22Unmitigated-Disaster%22?tickers=%5Edji,%5Egspc,QQQQ,SPY,DIA,TLT,UDN

  27. Buyer

    Mark, Amen brother! That is exactly where I am… There are some high net worth folks on here that have the money to speculate, but my guess is they are the minority. However, as for us me, its hard to move my potential down payment out of something like Tax Free Munis that are yielding over 5% tax free and simultaneously give up my “safety net.”

  28. Lori Turoff

    So where and how do I buy these 5% munis????

  29. Buyer

    Lori,

    I like USAA’s muni funds, so here is a list of what I am in:

    USTEX
    USATX
    USSTX

    I am sure other fund managers are probably just as good. Municpal Bond Yields are high since the bond insurers are probably insolvent. However, I think that Obama will bail out local governments all day long. So, I think the whole asset class is undervalued but that is just my opinion… In this market, its hard to find something better…

  30. DKzzzzdkzzzzdkzzzzdkzzzz

    As much as I hate actual commodity ,but at this point of the game Gold is the only option. Physical gold that is, not some paper promise, that said I am not sure if you can find gold right now. Australia perhaps, cause US/canadian mints are already empty.

  31. Lori Turoff

    Gold – now there is something I understand. Does gold jewelry count? 18K? : )

  32. Seller

    To Hoboken buyers: You don’t have to buy at market value. You can buy discounted properties in any markets. Just be a little creative with your search. Looking for signs for distress in the selling, such as seller’s desperation due to changes in job, divorce, or late on payments etc (you need to talk to the agents or the seller if it’s for-sale-by-owner). Also look for minor distress in the property, such as cosmetic-repair-needed homes—This type is my favorite. You hire some one painting the place, fix the pipes and door handles for $1500, you actually instantly increase your property value by several thousands. Replacing old appliances is another great way of boosting home value significantly. There are many distressed properties in Hoboken. You just need to do some homework. To me, money is made when you buy strategically not when you sell and hopping the appreciation will follow. A booming market like 2004-2006 is very very rare. I wouldn’t count on it to happen again soon.

    Also, if you are afraid of loosing job the 2nd day after closing, I would suggest that you buy home “one size smaller”…whatever the “size” means to you (sqft, # of bedrooms, etc). Put down more money to avoid high leverage situation. So that in case you need to rent out your place, you will still be ok. Actually working with an experienced realtor really pays off since he or she can keep an eye on what you want and help you spot hidden equity.

    My point is if you believe in home ownership or are an investor, you can get good deal in any markets by being flexible and creative. Actually the same theory works for sellers too.

    BTW, I love your blog Lori. I’m in RE market research field. But more on the commercial side. I wish residential side is as transparent as the commercial side. But you did such a wonderful job providing the information missing in the market. As an investor and home owner, I thank you!

    BTW, I love your blog Lori. I’m in RE market research field. But more on the commercial side. I wish residential side is as transparent as the commercial side. But you did such a wonderful job providing the information missing in the market. As an investor and home owner, I thank you!

  33. Owner

    I have a question – is the terrace of a condo included in the total square footage? So if i see a condo with 1000 sq ft and a 100 sq foot terrace, do you include the sq footage of the terrace when estimating the price of the condo? If the avg cost per square foot is $500, then is it $500×1000 or $500×1100?

  34. Lori

    Outdoor space is not included in square footage. It is noted in the remarks.

  35. keri

    wow, this is a great site! i am small time compared to some of you guys, but i have just a quick question: i live on long island but own a 400 s.f. studio condo on madison street. i purchased it 9 years ago for 116,000 and it was appraised two years ago for 250,000. i have tried to refinance it with three different banks (i have a 30 yr. fixed at 8% and i owe 87,000 on it, crazy i know) but no bank will do the refi now because the game has changed and they will no longer refi properties that have a greater 50% ratio of tenant/owner units. this building has 8 units and 5 out of the eight are rented….for this reason, even with all my equity and an 8% rate, i cannot refinance to take $$ out for another property. now the question, should i sell and take a hit? and if so, how much do you think i could get now for a studio? or should i just sit tight with this high interest rate and hope that the rules of the banks change in a year or two and lighten up so i can refi…..i never wanted to sell because i love the hoboken area and i do believe that in times of growth it does tend to grow more than other areas….especially syracuse, which is where i am focusing my current investments.
    and last question: if i do hold onto this property, how much should i be receiving in rent. i currently get 1100/month which does cover all my expenses but does not give me cash flow.
    so what would your advice be?….thanks in advance.

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