2009 Apr 14th

March Results for Hoboken Condo Sales – Here are the Statistics

The March Results – Hoboken Hangs in There

This chart shows results for the month of March from 2009 back to 2006:

This chart shows the first quarter of 2009 results:

I look at these numbers and wish there were more transactions but the rest, no matter how I slice it, just doesn’t look too bad. What do you all think?

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  1. potential_buyer

    I think Hoboken is a very strong market, and as such it will take it longer to reflect the changes occurring elsewhere.

    “These declines are happening but aren’t showing up in the data yet,” Rosen said in an interview. “Any place hit by the financial crisis will have substantial declines.”

    http://bloomberg.com/apps/news?pid=20601087&sid=avIKJbIquH8w&refer=home

  2. D$

    How has the absorbtion rate trended? Is there a monstrous inventory of less desired properties building up that will drop an a-bomb on these stats in the coming weeks/months.

    More importantly, did any of the sold properties in March 2009 have Virtual Doormen? If so, can you specify which brand. :-)

  3. D$

    Oops, spelled absorption wrong – Sorrie, all.

  4. Heidi

    Hi everyone,
    I just accepted an offer in Manhattan and I am thinking to buy a condo in Hoboken. I did some research on the housing market and find this website offers great information and is one of the best recourses I can get.

    It seems to me, so far, the housing market in Hoboken is not bad at all, at least compared to the national level or other big metropolitan areas. But that is exactly what worries me. It means there is still much room for the downside of the housing market. Read the following link from cnn, the 2009 Latest real estate forecasts and projections for New York areas (which includes Hoboken; since it is like a backyard of NYC).

    http://money.cnn.com/magazines/moneymag/moneymag_realestate/2009/snapshots/10.html

    According to their forecast; The total price decline so far is -15.4% (peak through 2008). But the forecast total price change from the peak is -35%, which means we will see another 20% drop in the price, and the market will hit bottom around 2011 Q1.

    I am not crazy about the forecast numbers, I presented it here, because I believe the trend it forecasted is right. It actually makes sense, we are not really different from San Diego area, both housing markets inflated over 100% over the bubble period. And San Diego is just a little bit earlier than us in the cycle. Their price has dropped 42% so far(Hoboken price only drops by 15% so far), so they will probably get out of the mess earlier than us, around the end of this year. I see the NYC area housing price will follow similar pattern, at least this year, we should see some declines in the price.

    I really want to have my own condo in Hoboken, and want to live there for a good # of years. But why should I jump into the market knowing the condo I bought will lose value in the near future? But at the same time, the rent is so expensive in Hoboken area, renting really makes me feel throwing away my $$$…

  5. Lori Turoff

    The article clearly states “prices are for single family homes”. That makes it pretty irrelevant for forcasting the market of Hoboken condos, in my opinion.

  6. stan

    Heidi-

    If you are staying for a long period of time it makes sense to buy. you would be throwing away monthly payments if you bought for a short period of time and prices decline or even stay flat due to the transactions costs involved and and higher carrying costs of owning.

    what would scare me is that the sales pace is half of what it was in march of 2007. I also think the median is popping due to the maxwell/luxury/under contract places recently closing.

    San Diego is no NYC metro btw. Any decline here is directly related to jobs.

  7. Tiger

    I think the numbers look good, we are now very deep in this recession, yet it seems that things are ok. The sky isn’t falling.

    I agree with Stan, I personally don’t think our decline will mimic any of the other areas in the country. This is not saying it’s going to be better, we could be better, we could be worse, time will only tell.

    Heidi – welcome to Hoboken and welcome to this blog. I’m glad you are considering this wonderful town, Good economy or bad economy, Hoboken still rules!

  8. dkzzzz

    According to this research posted prices are going up in Hoboken or staying flat that tells me I should wait longer and see what the trend is going to be in a next 6-12 months. The beauty of RE market it does not swing up or down violently it changes very slowly.

  9. patk14

    For anyone who actually thinks the exact same unit in Hoboken is now selling for the same price it rec’d in March 2008, I have a wonderful bridge in Brooklyn to offer up to you. Were there really 233 units listed in March 2008 compared to only 135 in March 2009? Didn’t you show 533 active listings just last week on this site? Please check this data as that has to be wrong. A 42% decline year over year in listings? There is always a lag on sales actually closing so the sales prices above are not current prices. So, you are showing a 1/09 ave sale price of $587K declining to $531K in 3/09. That is a 9.6% decline just 2 months later. Leads me to believe that the 1/09 sales were agreed to in Oct/Nov 2008 while the 3/09 sales were consummated in Dec/Jan 2009.

    The reality of our situation (and I mean the whole metropolitan area, Hoboken is not some special oasis that is untouchable because of our high property taxes) is that unemployment is climbing particularly in finance, incomes are declining, taxes are increasing, and real estate is declining. This area is late to the game for real estate declines and will likely have declining prices after much of the nation has recovered. By the time this terrible runs its course, it can be expected that Hoboken/NYC real estate prices will decline back to 2001/2002 pricing which means we have quite a ways to go. Again, keep in mind that units in Maxwell Place are not going to sell for $300K because they have a great location on the waterfront and deserve premium pricing. Units in the SkyClub however, despite being spacious and modern, will suffer big time.

  10. stan

    patk- agreed.

    These price numbers are higher by the closings at 1425 Garden. It raised price per sf and median.

    If you look deeper into the previous sales prices and similar units on a year over year basis, prices are down 10-15% minimum.

  11. Brian

    Units in the SkyClub are already suffering. I’ve been looking to buy in Hoboken since October 2007…and I just keep looking. Back then there was a 2B/2Ba back on Jackson Street in the Everard listed for $675,000. I think it eventually sold somewhere north of $600. Similar 2/2’s in the SkyClub were getting listed in the high $500s and low $600s. Now, I’ve seen 2/2’s in the SkyClub being listed around $450-475, the drop from peak is easily 20% already for those units. Although when they were offered when the SkyClub was built, I believe all of these properties started in the $300s and $400s.

    Same for lots of other properties. I am worried about the proliferation of cookie-cutter 2 bed / 2 bath properties in Hoboken and the long time to resale, so now we are looking to find properties that stand out in some way (either a third bedroom, a great location or great extras like a large terrace or other outdoor space). The property taxes have definitely also spooked us.

  12. homeboken

    The data that Lori put up is interesting, but without seeing the source data, it doesn’t seem to tie to the weekly wrap-up data.

    All said and done, I for one have decided to rent again for at least another year. I was on the fence regarding buying, my current lease is up on Aug 31, right now, I have much more leverage with my landlord then I do with a Seller.

    I am also very nervous about the local and state political and tax issues. The property tax is the real variable in this situation. I can make offers based on location, value, comps etc. But I can’t figure out the tax variable.

    That said, I am seeing a lot of great data in the rental market. I like to operate where I have leverage. Right now, I can get a good deal on a rental. The Sellers still hold the cards in the for sale market. I will look at buying again next year, and in the meantime, I will be reading this blog consistently to get info.

  13. Trumpinator

    This simply is the delay of the inevitable – Wall Street bonuses fueled Hoboken’s rise, due to the short commute… Wall Street bonuses don’t exist…

    The explosion of development projects, and cookie cutter condos littering the back half of Hoboken has resulted in over supply…

    and the tax equation makes Hoboken a lot less affordable compared to neighboring towns, like JC and Weehawken.

    Batten down the hatches, when the bellweather months come in – June, July and August, it will be a bloodbath.

  14. Boken

    I would take a different view on the “wall street bonuses” argument made above. Those on wall street receiving large bonuses were buying properties in higher end markets such as manhattan, greenwhich, summit, hamptons, etc…and not necessarily in Hoboken, which has always been a more affordable alternative for those who work in the city but are looking for a deal, not something that wall street high rollers were concerning themselves with. If you look at todays landscape/economy, you can certainly argue that Hoboken should fair better and prices should do well given that 2bed/2 bath apts are significantly cheaper than manhattan, not to mention condo fees and property taxes are much, much less. Hoboken provides a much more reasonable, affordable cost of living for young professionals and those looking to start/raise a family. I would much rather pay $500-600k for a 2bed/2bath in hoboken, then 700k-1mm for the same thing with possibly a longer commute (think upper east side to wall street) in manhattan. Hoboken is a great deal for these guys and others looking to buy in this market!!!

  15. Tiger

    I think the numbers match the weekly wrapups, # of Units Listed is the number of new units to hit the market THAT MONTH (not number of active units). In March 2008 metrostop? or some other building flooded the MLS if I’m not mistaken.

    I still don’t follow the logic as to why we will continue to suffer while the rest of the nation recovers, but that’s just me. Help me understand; so at some point this recession will be over. Of course job loss will continue, just like it did a few years back. But then, what will happen? Will the whole area just starve and die? Will NYC just… end? No one will want to live here anymore?

  16. patk14

    Agreed that the high paid investment bankers and traders didn’t buy in Hoboken. But the systems geeks and operations guys who also worked on Wall Street and shared to a lesser degree in those bonuses absolutely did fuel Hoboken real estate. Young grads just starting out and receiving a $50K bonus and thinking it would never end. Well, it has and the gravy train has run dry. This town is as reliant on Wall Street bonuses as any area in the region, more so than Manhattan. Just check out past financial downturns and the impact on Hoboken. Cause and effect.

  17. Lori Turoff

    Homeboken – all the data comes directly from the MLS. Unfortunately there is no way to “show” you the source. I don’t know why you say it doesn’t tie to the weekly numbers. It does. If you have any specific property you’d like to have verified I’d be happy to do so.

  18. homeboken

    Lori – I don’t have access to MLS, and I trust your data. My question was in regards to number of listings. I think Tiger might have answered my question above.

    It is much more likely that I am misinterprating your data then your data not being accurate. I just need some time to review (true geeks review spreadsheets at night with some wine:) Either way, a thousand thanks for supplying the facts, what you offer here is excellent.

  19. stan

    Patk- agreed, the bsd’s didnt live here but plenty of 150k + 50k bonus did. Three years of that and your in your cookie cutter 2/2.

    Tiger- NY will always be NY. It is not immune however, the real estate market here is directly tied to employment. There was not as much speculation here, but there certainly was a good deal here. We were late to the party and it will last longer after other place have hit bottom.

    http://www.nytimes.com/2009/04/09/realestate/manhattan/09real.html?_r=2&hp

    what happened in the early 90’s, Manhattan was still manhattan, no? the runup we saw was even greater this time. I am not saying 50%, but another 15% is going to happen. don’t take my word for it, see below

  20. Lori Turoff

    Homeboken – thank you. I appreciate that. I wish the MLS didn’t exist and that anyone could just go on line and get all the info they wanted. Unfortunately, they still have the upper hand and make it very difficult for the consumer and even for realtors. I do the best I can with what I’ve got to work with. It’s a terrible, terrible system!

  21. Lori Turoff

    I understand the unemployment argument. I understand that bonuses have been cut and the pain is being felt not just at the top of the pyramid but by the worker bees as well. Nonetheless, I see young, first time buyers coming to Hoboken every day. They don’t just work on Wall St. They sell pharmecuticals, they work in publishing, they work in graphic design. They mostly make closer to 100K and don’t get a bonus. They’re buying 1 bedrooms in the 300K to 400K range. They move here from the suburbs, often Mom & Dad’s house, where they were able to save the down payment by living at home. I don’t see any reason for that stream of business to dry up. If anything, lower prices couples with extremely low interest rates are making it affordable for them to buy. Just my day-to-day experience.

  22. bz

    I agree with Lori about the diversity in Hoboken buyers. I moved to Hoboken in 2003 and worked in pharmaceutical industry. Majority of my friends (including my back then husband-to-be whom I met in Hoboken) all worked in Jersey and making $60k-$100k. Even now all of us are still here and all have their jobs stable. The unemployment rate is 8%. There are still 92% of the work force working and making money, right? People easily get emotional over housing issues. Don’t take it personal. The best way to deal with it is to get as much information/fact as possible and make an educated decision based on your own situation and move on. Life is a long jorney. Enjoy the ride, don’t worry about things that you have no control over.

  23. Tiger

    bz I couldn’t have said it better, thank you! It’s good to know that not everyone is worrying about their property value and are actually enjoying their time here. Hoboken has so much to offer and honestly, there are things you can’t put a dollar amount on.

    It’s getting warmer as well; Hoboken simply RULES in the summer. All those BBQs at friends, new friends, walks on the pier. Values up or down, we truly have plenty to be grateful for!

  24. Boken

    true. not everyone is losing there job and not everyone works on wall street. my point exactly. you cannot argue with the fact that Hoboken is a diverse place that offers real estate at more affordable prices. Its not all wall street guys (or even tech guys that work on wall street). I lived here and a majority of my friends are not wall street guys. I think Hoboken still has the allure of being close but not too close to manhattan and offers a good quality of life.

  25. Boken

    thats “live”. Still a Hobokenite!!

  26. OnBloom

    As I sit on the sidelines from buying, I have to ask what caused Hoboken prices per square foot to essentially double from 2000 to 2009, from about $250 to $500(thanks for the stats Lori). I’ve rented here all that time. The light rail was completed and a bunch of new condos were added along it and on the waterfront. Maybe that added some attraction to the local real estate market for buyers (and boosted the average a bit)but I haven’t really seen the quality of life in town change appreciably. Not enough to justify a doubling of the price. I have to conclude that Hoboken was caught up in the same housing bubble as the rest of the nation. I personally am not willing to take on all the downside risk of seeing that confirmed. So on the sidelines I remain.

  27. Lori Turoff

    That’s interesting because my husband and I moved to Hoboken from a great part of Manhattan. We were living on a brownstone-lined block of the West Village on the border of the Meatpacking district before it became a scene. We’d been living in downtown Manhattan for quite a few years and moving to Hoboken was quite a leap for me. Being a typical New Yorker, I did not want to move to Jersey.

    When we got here in 1999, there was no supermarket. The waterfront was a mess. The Hudson Tea building was a shell. There were hardly any coffee shops (not that Starbucks is a plus but you get my point). We were told by young people who worked for my husband to say out of the President streets because it wasn’t safe. I could go on.

    In the intervening 10 years I have personally witnessed Hoboken grow and thrive. There are many more upscale shops on Washington Street. We have Shoprite, A&P and 2 Kings. Not to mention Garden of Eden. The riverfront is a beautiful park now. There is ferry service into the city. The streets are cleaner, and paved with (fake) brick. The sidewalks are clogged with baby carriages evidencing all the families who now live here. Our schools, at least at the lower levels are immeasurably better. There have been many more changes, both good and bad but there is no doubt in my mind that Hoboken has become a MUCH more attractive place to live for young professionals and families.

    Had you bought 10 years ago you’d be sitting on a nice pile of equity right now. Too bad you missed out.

    Again – TUESDAY IS ELECTION DAY FOR THE BOARD OF ED. Help make Hoboken even better. We need serious change to help our schools. Go vote for THRESA MINUTILLO, RUTH MCCALLISTER and MAUREEN SULLIVAN (1, 4 & 5). The are moms with kids in the schools and they want to get rid of the waste and bloat that’s killing our kids’ education.

  28. JC

    I find it interesting how everybody tries to time the real estate market like its an ETF of small cap value stocks. This is a freakin home we are talking about. I respect those that dont want to buy a depreciating asset, and I know everybody’s time frame is different, but the real estate market will stabalize sometime and then prices will start going up again at a “historical pace” although maybe more because the inflation this country will experience is going to be sick. If the property is an investment only and not a home then I too would stay on the sidelines.

    I found my dream home before Lehman collapsed so I bought it! I knew the real estate market would drop but I have seen 100’s of places and this one was perfect. Interest rates were low (I’m refinancing right now) and I was able to put 10% down at the time. Perfect situation for me who will be here 5-7 years minimum and who wants to own real estate in a high inflationary environment. I guess folks are very short term minded when it comes to Hoboken real estate. It makes sense with all the studio’s, 1 BR, and 2 BR’s. I also respect those on the sidelines because their jobs are in limbo.

    Its my view real estate is looked upon too much as an investment and not a home. Another reason we are probably in this mess. Everybody wants to brag about how low they bought their place for and how high they sold it. If you want to time the real estate market then trade stocks (homebuilders, REIT’s, Real estate index funds) but enjoy your home as a home.

  29. Tiger

    My experience with Hoboken has been similar to Lori and Boken. I lived here for 10 years. Hoboken is DEFINITELY a much better place to live in now than 10 years ago. It is much safer now, more facilities, and definitely a beautiful city. And I think the ‘trendy’ and ‘hip’ factors have boosted its reputation; Remember the movie ‘Dude Where’s My Car?’ from 2000? towards the end they tell the alien they are going to ship it to Hoboken New Jersey. Hoboken was a joking material at that time, but now, it’s referred to as the posh and trendy corner of New Jersey.

    I travel a lot for my job; almost all airport security officers comment on my address when I show them my id and compliment Hoboken. Not only in Jersey or Metro NYC, you’d be surprised how famous our milesquare town is nationwide. I had people from Seattle telling me how much they enjoyed their time in Hoboken or how much they heard about it.

    We rock my friend :-)

  30. patk14

    JC, you can secure a “home” in 2 ways. You can buy it or rent it. The idea that home ownership is the only option for families to achieve the “american dream” is a large factor in what drove this real estate bubble to such heights. Many people are better off renting in “normal” real estate markets. You and your family create a “home” environment. There are people in rental studios with a child who have created a wonderful home while people in McMansions in the burbs have absolutely terrible home lives. Everyone has their own personal situation but remember, the primary cause for divorce is over financial issues. Losing a 20% down payment on a bubble leveraged real estate purchase can ruin a family.

    Is Hoboken worth twice as much as 2001 on a per square foot basis (after a strong run up from 1994 to 2000)? I’d argue the primary reason for that 100% increase was a strong economy and an especially strong financial sector. Would it be the end of the world if a property that sold for $250K in 2001, peaked at $550K in 2006, retreated to something like $350K or $400K? Given the current state of the economy, large equity losses, the highest unemployment in 20 years with double digits likely, destruction of high paying financial and legal jobs, reduced compensation for those retaining jobs, and a very uncertain property tax problem specific to Hoboken, my view is rational economics tells me that something has to give on real estate prices. Inventory continues to grow and prices are declining, those are facts.

  31. stan

    Ten years ago we were not at the end of an unprecedented and unsustainable period of growth in regards to real estate. Comparing 1999 to 2009 absurd.

    If someone can buy a similar place for a cheaper price in a year, live your life, sign a lease and rent. You can have the same things renting as owning, for a lower price per month. Are you telling me that the millions of people who rent in NYC do not have a sense of community?

    Lori, ask the guy who bought in 1989 and did not see a profit on their places until over a decade later, not including higher monthly costs? I can assure you the people who bought after things had come down substantially did not regret buying in 1996, 1997, 1998.

    There are reasons to buy of course, but why buy at price higher than you have to? We are now at 2005-2006 prices in much of Hoboken. Sure the person living in the apartment purchased in 2008 has lost money, and it is his home, but who’s better off, the guy above who’s 10% dp has vanished or the person who buys tomorow.

  32. Lori

    Hi Stan,
    First, I have to strongly disagree that “you can have the same things renting as owning”. I would never rent. It’s just not my place. There is to me and many other people a real value to having your home belong to you and not a landlord. It’s not about the sense of community, it’s about the sense of pride in your own property. But since you mention community, I also believe that owners have a much stronger tie to the community and interest in it than any renters do.

    I bought my first place in Great Neck, LI in ’80 or ’81. Sold it and bought a place in Zeckendorf Towers on Union Square Manhattan in ’90 (after grad school & a clerkship in DC). People laughed at me. The area was a dump. I didn’t buy it to make a profit. I bought it because I wanted to live in it and I did for a long time, loving every minute of it. My only regret is that I didn’t buy more units when they were cheap. Or at least a bigger unit. At least I got one with a nice view. So what’s the problem? Owners are not flippers. For most people, buying a home is a place to live, not a way to make a quick buck. That I believe is what caused many of our problems. In fact, I read that if you look at the default rates based on income demographics, the lowest defaults are among the buyers who took advantage of Bush’s (or Freddie or Fannie’s) program for low income first-time, minority buyers.

    If they guy who bought in 2008 stays there for 5 more years I bet he ends up pretty happy, not only at the end of the five years but also during the interim. JMHO

  33. stan

    Lori-

    he would not have ended up as well as the guy who bought in 2009 and sold in four years however. Its not a way to make a quick buck, but it is the largest financial decision most people make. Why not purchase when things are lower, as they will be and are in coming months. We are declining 1%/month. Thats real money.

  34. Lori Turoff

    Of course. If you can buy low that’s better than buying high. Sometimes, though, you have to move because you’re starting a new job and don’t want a long commute, or you had a baby and need more room, or you got divorced and need to move out, or you can’t stand your room mate for another day. You get my drift. It’s not just about the money. It’s your life. But yes, if you can save on price, that’s great. Just be sure you don’t lose the savings on rising interest rates. . .

  35. stan

    I agree, lifestyle changes come into play, kids, new job etc. If you need the place by all means buy. And it certainly is not about the money always. I am just comparing the person who has the ability to wait vs the person who wants to buy now. I am comparing a person in a similar apartment renting, who will be purchasing a similar condo. Rental costs are less, prices seem to be declining. Of course you would run the risk of prices increasing, and we shall see if that occurs quickly. I envision the decline to continue slowly and any recovery to occur slowly as well.

    The govt is throwing everything but the kitchen sink to try to inflate this bubble. Artificially low rates, fed buying mbs, 8k Tax Credit(which is substantial) for 1st time buyers. And prices have still declined. My question to you is, what happens when interest rates increase?

    My question to you is this, what happens when interest rates do increase

  36. OnBloom

    Hey JC, I take offense to your suggestion my attitude is the reason “we’re in this mess”. Some of us with modest means unfortunately cannot purchase a home without looking at it as an investment. The financial titans bankrupted the economy to such an extent that it now threatens the livelihood of all of us with jobs that actually create economic value. They also saddled us with these 401K pensions that generate wonderful fees for the financial industry but increasingly appear as inadequate vehicles for providing a decent retirement going forward. I for one would like to have my own home in Hoboken but have to take a wary look at current asking prices. Sure many things have improved in Hoboken but do they justify the doubling of prices in 8 years? A significant share of prices– not to mention the 19 RE offices I once counted on my walk to the PATH — undoubtably are tied to the unsustainable go-go economy of recent years.

  37. Tiger

    $100K in 2000 = $130K in 2008, 30% inflation in eight years.

    Something to keep in mind when comparing prices back in 2000 to today’s prices

  38. stan

    Such an important query , I asked it twice!

    :)

  39. patk14

    I remember people being nervous about buying in 2000 because of the rapid real estate escalation over the previous 5 years. So, if we assume that general inflation (a good proxy for rise in incomes) accounted for 30% of the real estate run-up from 2000 to 2008, that leaves 70% to be accounted by exuberant real estate expectations. Remember, historically, there has been a very close correlation between income and real estate which makes all the sense in the world. Is the Hoboken experience really worth 70% more than it was in 2000?

    People are more willing to stretch themselves to buy real estate if they think their jobs are safe and that future years will bring steadily increasing compensation. They see friends/neighbors who bought earning huge returns on their levered investment and feel that they must buy now or be price out forever. If they now fear that their job is at risk and that they may have to possibly relocate on short notice, they will be adverse to buying a condo (transaction costs will make this an expensive exercise). Right now, every sector (yes, even Big Pharma) is struggling. Expansion projects are being delayed, companies are de-levering, consolidation to reduce expenses, major law firms delaying start dates for new associates and not hiring summer associates, media and advertising being crushed, etc. I would strongly advise sellers to get a deal closed ASAP and warn buyers to be very cautious.

  40. Lori Turoff

    What happens when interest rates go up? Mortgages become more expensive. We’re looking at mortgages right now for under 5%. That’s unheard of. But what about this? What if you don’t have leverage? What if you save your money and pay cash for your home. And then you live in it for 30+ years? Sounds bizarre in today’s credit crazy, non-saving culture but many people have done it in the past. Why is that such a bad thing? Before you Wall St. people start telling me about the opportunity cost of money, come take a look at my stock portfolio. I would have been better off keeping my money under the mattress all these years than investing in financial products. Not everyone makes money in stocks or mutual funds. There is risk. So why not buy a place with 50% down, or more and stay there for the long haul? Just an idea.

  41. Tiger

    I wish mortgages get recalculated when you reduce principal, that would be great. I took a small HELOC on my condo (Paid 15% down, took 5% as a HELOC so that I don’t have to put PMI). I paid it off. One good thing about it was the fact that the more principal you put towards your principal, the lower your payment. It motivated me to close it off sooner than I needed. I saved $200 monthly by paying it off.

    With a standard mortgage, the more money you put towards your principal, the shorter it will take you to pay it off, not much of a motivation if you ask me.

  42. Lori Turoff

    That depends on the bank. I’ve paid off or paid down mortgages and had the payments readjusted without the maturity changing resulting in much lower payments – at no or very, very small cost. Worth asking about when you acquire the mortgage!

  43. homeboken

    Lori- As a realtor, you know exactly what happens when rates go up. The universe (tiny as is currently) of buyers starts to shrink. The next derivative in that equation is with fewer buyers, inventory continues to climb and prices have further downward pressure.

    Remember, the main driver of the current economic mess was cheap money being lent. I cringe when I hear folks claim that low-mortgage rates will lead us out.

    I become wary of a realtor using the “rising interest rate” scare tactic. I can ALWAYS refi a high rate. I can’t always clawback my cash if I overpay.

  44. homeboken

    Addendum – I can’t ALWAYS refi, if I somehow borrow in a pro-longed high rate environment, or if my home appraises for less than my loan, then I am stuck.

    My point is that this market will not clear due to low rates, it will clear when the supply/demand equation reaches equilibrium.

    My contention, is that we get there due to lower prices, not increased demand. I could be wrong but I am putting my money where my mouth is and renting for another year.

  45. Lori Turoff

    I never use scare tactics and haven’t here. The question was asked by Stan (above) “what happens when rates go up” and I simply replied that mortgages get more expensive. That is simply a fact. Higher interest rates increase the cost of borrowing.

    There are many buyers out there debating whether they should buy now or wait a year. They are making a decision affected by two inversely moving variables. So a movement in one (say, prices going down) may be offset by an opposite movement in the other (interest rates going up). That was the extent of my point so please don’t misrepresent my words.

    Finally, a market can reach equilibrium either by an increase in demand or a decrease in supply. That’s just basic economics 101. I am loathe to forecast the future and have not done so here. If that’s your gig, there is a fortune teller located conveniently right next door to my office. Perhaps they have better insight into what’s going to happen tomorrow.

  46. patk14

    Despite my pessimistic view on area real estate, I think Lori has actually been pretty fair and provided a great service with this site. She has consistently pointed out when sellers were asking too much and has counseled them to lower their price. For those reasons, when I feel the time is right, I will strongly consider her when hiring an agent. I’ll be one of those guys putting 50% down so that I can have a manageable monthly payment (maybe go with a 15-year mortgage).

  47. JC

    On bloom, my comment was not geared toward your words/personal situation directly. Your response is absolutely valid. I apologize for anything I said you took personal offense too, I dont attack folks on this board.

  48. Lori Turoff

    Well, as always, thank you all for your contributions. Kudos for expressing intelligent, diverse ideas and dialogue always in a respectful manner.

  49. Helping Hoboken Moms Sell Their Condos » When is it time to get discouraged about selling my unit?

    […] I experienced when I was selling my 2BR, and it took less than a month. Since the average unit is on the market for 88 days before it sells (and that is just for the 34% of units that sell) then when is it time to worry and bring in the […]

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