2009 Apr 1st

Weekly Wednesday Wrap-Up: Hoboken Condo Sales & Inventory for the Week Ending March 31st

Research, analysis & post by Lori Turoff

Who is the April Fool?

I’ve written a lot in this space about sellers overpricing their units.  Often, as noted below, it takes quite a few price changes before a unit sells.  Nonetheless, we have a continuing build up of inventory.  The ‘spring pick-up’ in the Hoboken housing market may be more psychological than real.  Today I’d like to point out that buyers are often as unrealistic about what they believe they can purchase a Hoboken property for as sellers can be as to what they can sell it for – thus, the standoff.  One of the most important things a buyer can do is learn to assess value.  When the average sales price (not list price) for a Hoboken condo is over $500 a square foot, the buyer has to ask him or herself a few questions if they expect to pay below that:

All buyers want a bargain but sometimes the unit is priced property and were it to sell for a little (up to 5%) off asking, they would be getting a deal.  Not every unit warrants a more than 20% discount off list.  What I repeatedly see happening is buyers make offers that are simply too low and sellers just say no.  Eventually, after losing out on a few good properties the buyer realizes that they are not being realistic about price.  That’s why it is so important for buyers to look at lots and lots of units.  The more a buyer sees, the better able they are to judge what a property is  worth.  Sure, there are bargains to be had on the overpriced units but not every unit is overpriced.  The ones that are really nice and priced right continue to sell without price reductions and very close to asking price.  While many sellers still won’t accept the reality of today’s market, sometimes the stand-off is the buyer’s doing. 

Stay tuned for the March Hoboken condo sales results which will be posted very soon.

The Hoboken Condo Weekly Numbers

Studio & 1 Bedroom Hoboken Condos:

192 total active – $432,793 average asking price.   88 average DOM.

None under contract.

4 sold –  $378,250 sales price.  172  DOM.

2 more sold prior to this week but the sales were not reported to the MLS in a timely manner by the listing agents.  Some agents don’t bother to change the status when their deal closes until weeks later despite the 24 hr. rule.  Unfortunately, no one from the MLS bothers to check or enforce the rule.  I will include the info but these sales are not included in the weekly averages for this week nor have I gone back to change the average numbers for the week in which they should have been included.  Some, like 924 Jeff, closed on the 24th  and get reported on the 25th so they really belong in last week’s totals.  Others, like 418 Bloom below, closed weeks ago.

 8 new listings – average list price $514,374. 

15 price reductions.

Two Bedroom Hoboken Condos:

287 total active – average asking price $642,984.   113 DOM so far.

 4 dabos – after an average of 68  DOM

3 sold – average sales price $535,000.  Average DOM 97

2 sold but were reported late.

 12 price changes

12 new 2BR listings – average list price $657,308.

Three Bedroom and Larger Hoboken Condos:

54 active 3BR condos – average asking price $982,274.   139 DOM so far.

None under contract.

None sold.

5 price reductions

3 new listings  average list price $723,333.

Hoboken Condo Open Houses

If you are in the market for a Hoboken condo, our once again improved Hoboken Open House Google Map is your single best source for info on every open house in Hoboken.  It’s posted on Friday every week.  The info is updated weekly.  If your google search seems to pull up an older version, click on the title link to get the most current map.  

 

Thanks!

  1. Lori Turoff

    I have to wonder what these sellers are thinking when they won’t negotiate. I had a seller’s agent tell me the other day, when we were having some issues coming to terms on some inspection items and my buyer wanted to be sure everything was fixed, “well they don’t have to sell, it’s a family owned property”. Who is their family? Rockefeller?

    On the other hand, there was an exceptionally nice 1BR I showed to one of my buyers that was listed at $399K. It was vacant and had been on the market for under 90 days. Great building, great location, great space and over 800 sq. ft., great condo ass’n. w/ very strong financials, professionally managed, this unit really had a lot going for it. My buyer wanted to offer $320K. (he later changed his mind and did not). The next week there were 3 offers on it. I bet it went for full price.

  2. Smith

    I work in the finance industry and the complete carnage and loss of jobs and pay on Wall Street is amazing and completely UNPRECEDENTED. There are so many people who are out of work and have little to no chance to find a new one. Their days in NY are numbered and they will soon move back to Minneapolis, St. Louis, Cleveland, etc where they have a social network to support them as they look for work.

    The folks at many investment banks got paid bonuses that are 10-25% of their previous year bonus, and the expectations for this year are even worse. This is a COMPLETE reversal of bubble type compensation that saw annual increase by 20-50% per year. New York is raising taxes and jobs are going away. Services in NYC are being cut. If you look at NYC growth of the financial services sector, it is a bubble that is bursting and will impact NY 10x more than California.

    There is only one place real estate prices are going, and that is down. Who is buying in the City now – nobody. I am not surprised at all by the post that shows NY population declines in the future. NY in the next 10 years will trends towards the the 70’s more than the late 90’s. 1975 in NY was not glamourous or even safe, and all fundamental indicators are that it is headed in that direction again (hopefully not as bad). It’s amazing that people kept saying “NY is immune from the real estate correction”, etc — just the same thing said about the broader market only 2 years ago. I see only 5% price correction in NY after bubble price appreciation and head for the hills with my checkbook locked away.

    Any commentary on the market being buoyed by foreign buyers — their losses in the last few months or year on FX alone are huge. Wait until the USD price starts correcting and they all stop buying here. And the market is still propped up by so many speculators and flippers who are going to face the financial distress scenario another poster mentioned.

    Hoboken is akin to a “fringe-type” NYC neighborhood that will experience material price decreases – I don’t need a crystal ball to see that. The lack of transactions is an obvious indication of where the market is going. I’m from NJ, met my wife 10 years ago in Hoboken, and lived here for 4 years now, renting and waiting for my ability to buy to increase — so I have no negative bias to Hoboken and like living here. But why on earth would I buy now when I can keep renting and not worry about putting out a couple hunno and hoping the market stabilizes and I keep my job? Seems like almost everyone agrees with me as evidences by this fantastic blog’s weekly reports, and the only Hoboken transactions I see every week are the sub $500k West Hoboken locations that people can afford. There are no buyers out there in the upper 6-digit range for 550+ per sq foot, which some people on this thread believe are the “insulated” properties. They are going to decrease by the greatest percentage as the city has a mass exodous and buyers choose a materially repriced NY over Hoboken.

  3. potential_buyer

    Amen Smith

  4. Smith

    Lori, you referenced a $500+ sq. ft. selling price in a previous post, which I believe is an average. What is the median price per square foot? Thanks.

  5. Lori Turoff

    Smith – if you go back to the February numbers chart you can see all the square footage and median prices so you can calculate it for any month, but the number for median price per sq ft for Feb 09 comes to $414 versus $516 for average price per sq ft. I think all these numbers are being skewed a bit by the sales at Maxwell and Garden St. Lofts, (which I finally saw this weekend – where exactly is one supposed to store food and dishes in those kitchens?).

    Here’s the link to the chart: http://hobokenrealestatenews.com/2009/03/02/the-hoboken-condo-market-the-february-results/

    Thanks for your comments and viewpoint!

    MARCH results will be posted this week so stay tuned.
    Lori

  6. Smith

    BTW, my understanding on GSL is that those purchases were closed a while ago and that there is a timing issue. There is no way that 2 penthouses got sold in one week — these properties were listed as sold weeks or months ago on the GSL website but only recently came into the available data.

    I consider the recent GSL data points as stale, if anyone sees I’m missing something let me know.

  7. Lori Turoff

    Agreed.

  8. Tiger

    Thanks Smith – that’s a very good argument, but saying that jobs are never coming back is extreme, I’ve heard it all before.

    I’m not an expert on the financial industry but let me tell you about mine, IT Industry. I finished my BSc in Computer Engineering in the ‘doomed’ year 2002. The stock market crashed, 9-11 attacks only a few months ago, and a new wave called outsourcing, was taking the country by storm. Literally overnight thousands of labs and development centers were closed and jobs were shipped overseas. Headlines in WSJ and NYT were saying how IT is no longer a good career option.

    Stevens has always boasted that over 90% of its graduates would have secured a job/ grad school by the time they graduate, our class’s was closer to 30%, less than half of which got jobs. This was the lowest in Stevens 100+ year history. Sophomores and Juniors in Computer Engineering and Computer Science switched majors. It was over, who would want to be in IT anymore?

    For me personally it is something I enjoy doing so I kept on, I went to grad school. Now, the year 2003 was bad, 2004 was even worse. But in 2005, companies started realizing that cheaper isn’t necessarily better, that you need IT team to be close to business to develop feasible. SO yes, IT jobs were back and stronger than ever. They evolved (to the better), became more challenging and demanding, but they came back.

    Like I said I’m no expert, but I’ve seen the scenario where ‘jobs are gone and never coming back’ actually did come back. Why is it hard to believe that something like that would happen in an even bigger, more fundamental, and stronger industry?

  9. Willy

    It IS hard to believe for one simple reason. The TYPE of stimulus that was applied and the type of economic contraction at those previous points were COMPLETELY different from what we are experiencing now.

    Not only will those jobs NOT come back, neither will those property prices for a VERY long time. Hence, the stagnant interest –> stagnant pricing –> stagnant inventory.

    Basically, real estate does NOT benefit from the necessary economic policies we are currently undergoing. Real estate is being cushioned for a SOFTER landing but NO REVERSAL in trend is possible unless prices fall MUCH further.

    Even then any rise in prices is not probable until inventories become EXTREMELY short in supply. That my friend, is a LONG way to come; even in convenient Hoboken.

    We are just beginning to witness the contraction in RE offices in town. Until those numbers get realistic, there is still a denial problem in the eyes of sellers and related RE professionals.

    The few that are beginning to get AHEAD of that curve will be very thankful they took the deal albeit at a price lower than their expectations.

  10. Pat

    I have to agree with the doom and gloom crowd here. I too work on Wall Street, and it wasn’t until this Winter and bonus season, that people really realized the world has changed. I don’t know how much people are making in other businesses in NYC, but a Vice President could have hope to make upwards of $400k..now they will be happy half that. And there are less of them. I don’t want to be a gloomy guy, but the higher end Hoboken real estate (ie Maxwell, W) is going to get crushed. No one is going to pay $900,000 for a 800sq ft 1 bed in the W. you could easily move to Manhatta for that. I think higher end condos and 1 families will easily see 20% price declines from HERE, if not as much as 40%.

    there is like 2 yrs supply of inventory and I expect more offerings to come due to layoffs…

  11. Smith

    BTW, I don’t think job loss in NY is permanent. But it is SOOO real and has NOT yet taken true impact on the local economy. NY is in a down cycle and not even close to bottom. Not many people can remember the 70’s in NY, but that was also a down cycle to say the least and that is the direction (if not the end point) we are headed.

    Will NY cycle up again? Yes. When? Not for several years. We could be entering another lost decade, and if not we are at least entering a downward trajectory for 1-2 years more.

  12. Tiger

    Thanks Smith, that’s what I wanted to say. Wall street as we know it could be gone forever, but I can’t wait for the new reinvention. There are many brilliant and talented people here and I’m sure something else will come up!

  13. Helping Hoboken Moms Sell Their Condos » How do I sell high but buy low?

    […] The prevailing wisdom right now says that “Those looking to sell their properties will have to be both bargain-hunter and bargain-provider, listing their homes at prices sensitive to their particular markets.” When we first listed our 2BR at $550k, we had no intention of taking any less than $520k. That # got adjusted down when we found the 4BR we wanted to buy. We thought about waiting the seller out because we were pretty sure the purchase price would come down, but the problem with that approach is that the sale price for our 2BR would also go down. And my sense of the market is that the value of a 2BR will drop a lot faster than a 4BR (classic supply and demand; there are 287 2BR units on the market and only 54 3BR+ ones). […]

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