2009 Feb 18th

Weekly Wednesday Wrap Up – Hoboken Condo Sales & Inventory for week ending Feb. 17th

Research, analysis & post by Lori Turoff

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What’s new in Hoboken?

There are some interesting deals around these days. I’ve noted a few below. Some interesting new selling concepts, too. Ever hear of a “Dutch Auction“? Well, read on. Other than that – it’s still more of the same. More listings, fewer sales, Hoboken condo inventory continues to accumulate.

If you are in the market for a Hoboken condo, don’t forget to check our Hoboken Open House Google Map on Friday, Saturday & Sunday to see if any of the new listings (or old ones) are having open houses this weekend. The map is updated every week so even if your google search seems to pull up an older version, when you click on the link you’ll see the current version.

Here is the overall picture of Hoboken condo market activity for the past week:

Studio & 1 Bedroom Hoboken Condos:

164 total active – $456,904 average asking price. 97 average DOM so far.

6 Dabos – 86 DOM.

Here’s an interesting one – 88 Park is a small but nicely renovated 1BR with some exposed brick, a mantle, w/d and new kitchen offered at $359K. The listing says it has a terrace. It also says “Private backyard with patio set & BBQ”. But it’s a 4th floor walk-up. How does a 4th floor unit have a backyard? Or is the ‘terrace’ really a roof terrace? You can’t tell from the photos. It’s certainly not clear from the description. I called “here at Liberty Realty we believe that your satisfaction is the key to our success.” After putting me on hold for 9 minutes and 53 seconds (my phone keeps track), not knowing who I was, I was unable to reach anyone to ask for clarification.

Note – If there were intermediate price reductions for a property to be “dabo’d” (placed under contract) or sold, they are noted here. You can check what all the others were priced at when they went under contract or sold for by clicking the link to the listings.

2 sold – $286,400 average sales price. 111 average DOM.

311 Monroe is a small but renovated 1br with a private deeded yard that sold for $253,500. Now that’s a deal!

9 new listings – average list price $382,777.

13 price changes.

Two Bedroom Hoboken Condos:

285 total active – average asking price $661,430. 111 DOM so far.

2 dabos – after 93 average DOM

2 sales – at $495,000 average sale price, 68 average DOM .

8 price changesall-dogs-2

18 new 2BR listings – average list price $591,766. Included are a bunch of new units at 1300 Park – a Fields gut reno and also at 415 Adams, another new project. There is also an over 1000 sq. ft. 2 bed 2 bath with a deeded yard & pretty deck. It looks like you might have to walk through the bedroom to get outside but still a good deal – attention dog lovers!

Three Bedroom and Larger Hoboken Condos:

61 active 3BR condos – average asking price $1,129,350. 136 DOM so far.

None went under contract.

None sold.

2 price changes

7 new 3BR listing – average list price of $670,928.

More units at 1300 Park among them. Here’s an interesting concept at 211 Adams: DUTCH AUCTION: the listing price will be reduced $2500 each week until property sells. This is the first time I’ve seen this in Hoboken real estate sales. Then there is my personal favorite – 2 adjoining units at Hudson Tea with due north views over the Hudson. Combine the two into an 1870 sq. ft. beauty for only $1.45 mil. Plus the cost of renovations. That’s $775 a square foot for the space and at least another $2oo to $300 per square foot to do the work. Oh, right, and the taxes. Taxes will be based on the new assessed value which would be unknown until you are finished with the construction and the tax assessor comes to pay you a visit! Hey, if it worked for Eli Manning, it might work for you too.

  1. Nancy

    Hey Lori,

    Just a heads up, but the link for DABOs under studio and 1 bedroom condos doesn’t seem to work…only two listings pop up.

    Looking forward to closing next week!

  2. Lori Turoff

    Fixed it. Thanks Nancy!

  3. stan

    great info as always Lori. Interesting how the auction will go. When does the $2500 stop? if I was looking at the property, wouldnt I just watch it drop and wait, very interesting…

    seems to be more deals out there. Pretty easy to see how the market is working actually. Cut the price, condo moves….

  4. mso

    For the Dutch Auction Property, the px/sqft comes in under $400…pretty much unheard of for that condition/area correct? (especially with the privte yard!)? Is there something ‘off’ about the property that I am missing?
    What do you think it would rent for?

  5. Lori Turoff

    I’m not sure how low the Dutch Auction could go – there may be a floor. I’ll try to find out more info. Under $400 per sq. ft. is very low. There have been some properties out there at that price but they tend to have ‘something’ wrong with them. Either bad location, bad condition or bad layout. Again, I’ll try to find out more and maybe go take a look but I’m actually going out of town until Monday so it will be next week before I can report back.

    It is good to see that when the prices start to drop the properties do sell. Something has to break this stand-off between the buyers and sellers. I’ve got buyers making offers of about 10% off asking and sellers who WILL NOT even counter! Astounding to me, in this market.

    Stay tuned for the open house map posting tomorrow. Remember, if you ever want to go to an open house and don’t want to be hounded by the hosting agent or inundated w/ emails, just say you’re working with me when they ask you to ‘sign in’. That way you don’t have to give your contact info and the agent will let you be.

    I’ll be checking in when I can and back to action on Monday.

    Have a great weekend everyone!

  6. Tiger

    Actually this is a clever strategy (dutch auction), it generates interest, and I gues every prospective seller would first see it, (hopefully) fall in love with it, and set their own prices. stan, you can wait for it to drop but then again you are also under pressure because you’re not the only one doing so.

  7. Q209 Buyer

    Lori – Amazing site. I have been living in Hoboken for a little over 1.5 yrs now (renting), casually looking to buy for 1+ yrs and seriously looking to buy since December. I have been following the market for some time now and am glad to see some units moving as they lower their prices to a “reasonable” level. Big picture, it seems as though the fact sellers are missing right now is that buyers expect them to share the current market’s risk and uncertainty. As a buyer, I do not want to purchase a “depreciating” asset that will wipe out 50%+ of my equity contribution a year after purchase. If I expect the Hoboken market to fall another 10% in the next 1-2 years, I am going to price this into my offer. If I feel the average 2BR has gone for ~$500 psf in a “good” area, I am not willing to pay more than ~$450 psf for the unit now. Sellers should realize this is the way many buyers are probably thinking.

    The second greatest factor that has changed my opinion on valuation is taxes. I know that it is hard for sellers to realize, as property owners does not have any type of short term control over them, but it needs to be considered. For illustrative purposes let’s use standard two bedroom that would originally sell for $521K, allowing a buyer to put 20% and get a conforming $417K mortgage. If the property taxes have gone up by $1.5K on this 2BR, that is a monthly increase of $125. Assuming a buyer is shopping with a fixed budget, in order to lower their mortgage by $125 on a 30 yr fixed @ 5%, they would have to reduce the borrowed amount to ~$393K. $393/80% implies they buyer can now pay $491K (a 5.8% decrease) for that same property (if you want to keep the equity contribution constant, the buyer can afford to pay $497K – a 4.6% dec.). This is only an illustration and not how everyone will think about it, but I just wanted to show the magnitude of using the “fixed budget method.”

    Again, Lori – thanks for the great site (especially the Wednesday Weekly Wrap Up)!

    Also, sorry to nit, but it looks as though the first dabos link is a repeat of last weeks 8 dabos. Thanks.

  8. Willy

    Q209 Buyer
    It’s refreshing to see the real estate sensibility that should have been common thinking a long time ago. You get the Consumers Union award!

  9. patk14

    Agree, Q209 uses basic math and commmon sense to demonstrate how skyrocketing property taxes (with unusable public schools) will drive down the value of real estate. Montclair is a classic example of this with their ridiculous taxes. Hoboken’s increased taxes (temporary?) only add fuel to the fire of an already declining market. Strap on your seat belts, we are in for an interesting ride.

  10. Tiger

    Q209 – Well said. Like you I casually looked for over a year (all of 2006 and parts of 2007), started seriously looking in October 2007, and bought in April 2008, after seeing more than 70 condos.

    at that point the market was ok, 5% or 6% down from the peak. I was extremely aggressive in my offer. My condo was already priced 5% below market then, but my offer was indeed 10% (yes, 10%) below asking price. My agent told me that I might ‘offend’ the seller, but I went through it anway. FIVE MINUTES later he countered it and we settled at 9% below asking (approx 14.5% off). At that time Hoboken sellers would not discount more than 1 or 2%.

    It was exactly what you said, I’m assuming a risk here and I knew it was on its way down so I thought this will be a fair price. I have to say that there were certain circumstances around my condo (a flipper, not listed in the MLS yet) that helped me with my ‘aggressive’ offer, but if things didn’t line this way I probably would have never bought then.

    So my advice to you is STICK TO YOUR GUNS. Find the condo that you totally fall in love with, make a fair offer, and negotiate.

  11. Lori Turoff

    Kudos to you Q209 and to the others like you, especially those who have commented here, who see the light. More buyers need to follow your approach and analyze things smartly (although, in honesty, many of the ones I’ve been working with actually are). Now if only the sellers would take a dose of reality. That is what will cause prices to come down and properties to start selling again.

    If $ / sq ft drops, what I believe will happen is that the premier units, say on Hudson St. or at Maxwell, will retain most of their value and not decline in price while the walk-up, railroad units with the white formica cabinets, slanted floors and bad tile work back on Jackson and Monroe will tank. The current average $ / sq ft may fall but the difference between the high and low will increase flattening out the curve somewhat. All Hoboken condos and properties are not going to be hit equally.

    What I wonder is, in the long run, is it better for real estate prices to remain relatively stable with no deals being done and the market to remain frozen as it is now or is it better for prices to drop for the sake of more transactions?

  12. patk14

    Lori, better for the buyer or the seller? As far as Hoboken is concerned, there is no fighting the market. The market will determine the proper valuation of a typical unit. I would argue that it would be better for the average seller to drop their price now and get a sale done. What has happened in past downturns is that sellers freeze up (they remember how high prices went at the peak) and are unwilling to sell below what they view as fair value. Eventually (can take over a year), some of these sellers get religion and realize that they must lower prices. Once a new floor is established, volume picks up. With our economy shrinking, the number of people willing to take a risk on Hoboken real estate is declining and the number of people who must sell their units is increasing. There is a huge bid/ask spread out there. The sellers must be aggressive in cutting their prices to get a deal done in this environment.

  13. Bill

    I am one of the owners of the property with the dutch auction. Thanks for the publicity! To address some of the questions of prior posters, part of the reason we decided to do the dutch auction was to do something unique to separate the property from the myriad other listings in town.(The comment here is evidence our strategy is succeeding) I also agree with the comment that there is a large bid/ask spread in the market at the moment and we think this strategy is also a good way to find out where the market actually is. And no,there is no floor, to answer another post. We are willing the sell the unit at market, whatever it is, but we’re not willing to waste time dealing with a low ball bidder hoping to stumble across a desperate seller, just as purchasers are not willing to waste time on sellers with outdated/ unrealistic expectations as to the value of their property.

    The property was previously under contract for $525,000, but the purchasers backed out in early October, which is why it’s currently on the market.

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