2009 Apr 22nd

The Weekly Wednesday Wrap-Up: Hoboken Condo Sales & Activity for the Week of April 22nd.

Research, analysis & post by Lori Turoff

Congratulations to the Kids First slate who swept for the three open seats on the Hoboken Board of Education.  Theresa Minutillo, Ruth McCallister and Maureen Sullivan have a tough job ahead of them.  Let’s hope they recognize that the young, enthusiastic teachers are essential to the kids’ progress and that they cut much of the bloat at the top, instead.  The possibility for a better school system is good news for Hoboken.  It means more parents willing to stay here for longer and increased property values.  Thanks to all of you who took the time to vote.  Now – the mayoral and city council election is only 18 days away.  Just because you vote for a candidate for Mayor DOES NOT MEAN you have to vote for their slate for city council!!!  The fight for a better Hoboken is not quite over yet.  Please stay informed and involved and remember to go out and vote again on May 12th!

The Hoboken Condo Weekly Numbers

Here are this weeks stats:

Studio & 1 Bedroom Hoboken Condos:

203  total active – $427,189 average asking price. 92 average DOM.

4 dabos after 103 DOM.

  • 1222 Wash:  Oct. 23 – $419k; Oct. 28 $409K; Oct. 28 $395K; Nov. 14 $$391k; Dec. 8 $359K; Jan 2 $339k; Jan 21 $318k;  (went under contract & back to active) Apr 14 $328k; Apr 14 $335k (?) short sale approved
  • 1015 Wash:  Dec. 1 $429k; Feb. 1 $425k; Feb. 26 $399K – dabo

None sold.

10 new listings – average list price $366,090.

14 price reductions.

Two Bedroom Hoboken Condos:

284 total active –  $645,560 average asking price. 113 DOM so far.

9 dabo’d.  144 average DOM

  • 839 Willow:  Nov. 4 $345k;  Dec. 9 $335k;  dabod
  • 700 1st St:  Feb. 21 $499k;  Mar 3 $479k;  Mar 19 $450k;  dabod
  • 84 Bloom:  Jan. 31 $499k;  Apr 1 $488k;  dabod
  • 308 Garden:  Aug. 13 $559k;  Feb. 23 $539.0k;  Apr. 13 $524.9k;  dabod
  • 78 Jackson:  Apr. 18 $684k;  July 18 $670k; Nov. 24 $650k;  dabod
  • 87 Park:  Aug. 6 $799.9k;  Nov. 8 $749k;  Mar. 5 $699k;  dabod

6 sold – $441,250.   Average 104 DOM.

  • 839 Willow:  Nov. 4 $345k;  Dec. 9 $335k;  sold for $322.5k.
  • 839 Willow:  Nov. 4 $349k;  Dec. 9 $339k;  Dec. 9 $349k; sold for $345k.
  • 1214 Washington:  Jan. 8 $429.9k;  Jan. 28 $409k;  sold for $390k.
  • 119 Madison:  Jan. 29 $499k;  Feb. 11 $489k;  sold for $460k.
  • 102 Jefferson:  Jul. 8 $589k;  Sept. 19 $579k;  Nov. 8 $559k;  sold $520k.
  • 1300 Grand:  Oct. 15 $679k;  Oct. 29 $659k;  Dec. 10 $639k;  Jan. 8 $625k;  sold $610k.

19  new listings – average list price $617, 874.

21 price reductions.

Three Bedroom and Larger Hoboken Condos:

62 active 3BR condos –  $961,284 average asking price.   135 DOM so far.

No dabos.

1  sold. $660,000.  111 DOM.

6  price reductions

6 new listings average list price $746,862.

Hoboken Condo Open Houses

If you are in the market for a Hoboken condo, our Hoboken Open House Google Map is your single best source for locating 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.

 

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  1. hobokenseller11

    It seems as-if things are getting worse – both in Hoboken real estate and NJ/NJ jobs and businesses. With real estate in Hoboken – huge inventories, new construction, and lowering prices in NYC and JC. In one year, Hoboken sellers are going to get killed (i.e. 20-25% drops). We want to move to the burbs with the kids where the prices are amazing – that said, we can’t sell in Hoboken. We may just dump the place (i.e. 100-75K off list), take the loss, and make up for it in the burbs. We don’t know what to do – thoughts? Also, I can’t beleive that brokers are telling us things are good and that Sellers shouldn’t slash 15% off list prices???

  2. lori

    If you saw David Leonhardt’s economic column in the NY Times today there was nothing but bad news about the local housing market. http://tinyurl.com/cmxfzx

    I do not ever try to predict the future. There is a fortune teller next door to our office for that. However, some sellers really don’t get it. I had a seller turn down a very respectable offer from my well-qualified buyer today for less than 2% of the purchase price. We’re talking under $10,000 on a unit listed for over a half-mil. Does this seller really think that in a month or two they are going to get a better offer? Chances are they will come crawling back to us, head held low.

    Sellers in your situation are fortunate because even if you take a hit on your sale, you will recoup it on your purchase and come out whole. If your agent is telling you not to cut the price when your property isn’t selling perhaps they have not done their homework and don’t know the market well enough to give you good advice.

    Look at the numbers – if the price is too high the property does not move! Pretty simple concept. Hope this is helpful.

  3. hobokenseller11

    It’s helpful.

    It seems like 99% of the properties in Hoboken are listed where they should versus other properties. That is good.

    That said, its seems like that all (ALL) of the properties should sell for around 10-12% off its list to get things going, which is hard for anybody (like us) to accept/understand and could mean large losses.

    For example, is a 665K offer on a 750K listing low balling or reasonable? How do you negotiate against that when they only raise their offer minimally thereafter?

  4. lori

    I’m not sure what you mean. Inventory has been steadily accumulating. The sales are not going to start keeping up until prices start coming down. It’s hard to generalize about “the market” because it depends on location & condition. The prime units still obtain multiple offers but the ones with something wrong sit and get stale.

    Is just over 10% off list a reasonable offer? Probably. More so if you were to talk about an initial bid of 10% off list on a unit that is listed in the $500,000s (supply is so much greater at that price point in Hoboken). Something listed at $750K must be on the water or pretty spectacular and those are not the units taking the hit. That said, asking 1.9mil for a Maxwell unit worth 1.1mil or (see last week’s post)overpricing a unit at the Shipyard that takes a hefty markdown to go under contract is not wise. It’s all relative.

    Bottom line – in today’s environment NO OFFER is a low ball. All offers should be taken seriously and negotiated!

  5. Doug

    hobokenseller11,

    The other thing you have to realize is that you’re able to get the lower prices in the burbs because prices are down all over. If price were to rise in Hoboken, chances are they’ll also rise in desirable burb locations as well. That’s the thing about buying and selling in the same area that most people don’t think about.

    So, sell at a loss in Hoboken to buy at a lower price in the burbs. Wait and sell at a higher price in Hoboken when prices pick up and buy at a higher price in the burbs.

    Also, I still don’t see why people still toss numbers out like they have a crystal ball – prices will drop 20%, etc.? The truth is NOBODY knows what will happen with any certainty. This market is unlike anything we’ve seen before so we can’t base it on traditional metrics. My advice is just make the decision based on what is best for your family in terms of quality of life and what’s important for you. Don’t worry about making a profit in this market b/c you really can’t predict what’s going to happen. Also, think about it this way…if you had that money in the stock market you would have been down 2X as much so a moderate loss in R/E would actually put you ahead of the game!

  6. hobokenseller11

    Doug,

    Yes, nobody can predict the future, but I’m getting my estimated “20% drop” from numerous sources.

    First, my friend who’s been a Hudson County house appraiser for years. He’s seeing some bad (bad) things out there – especially in JC and Edgewater. When I asked about Hoboken, he said that you would need 15-20% off a typically listing to ensure that you didn’t lose money in 5-7 years. Even then, he said there was substantial danger. Second, I’ve spoken to my contacts at some of the NJ developers and their predicting huge drops in the next 2-3 years.

    So, I understand that it is a guess, but these are the experts. Sellers like me are starting to wake up to this, but are age group has never gone through something like this…..

  7. lori

    Homeseller 11 – I think you still have to take what even “experts” say with a grain of salt. Doug is correct. We’re in uncharted territory. Just as your appraiser says things are bad, I was involved in two properties with multiple offers – one well over asking, just this week. So who really knows. I think Doug said it well – make your decision based on what’s best for your family and quality of life. I think that is what so many people lost sight of in the recent past.

  8. Doug

    Lori – I completely agree…you definitely have to take what the “experts” say with a grain of salt. Where were all these “experts” – the appraisers, developers, etc. – when prices were sky rocketing? They were the ones who were contributing to the unstable price increases. The truth is, the experts don’t really know what will happen so most now go according to popular belief (that way if what they say doesn’t happen they can point out “It wasn’t just me, EVERYONE else said the same thing”)

    Its the same thing that most people are starting to realize about the “experts” in investing. I know this is very cynical, but my experience is that its all a hurd mentality. Its very rare that an “expert” has the conviction to go against popular belief…why do you think company ratings are always so far off? The “experts” don’t want to go out on a limb and be the 1st to have a company as a “sell” while everyone else still has it as a “buy”.

  9. Interested

    Quick question –

    We currently have great rent in Hoboken, 20% or more to put down on a purchase and are very flexible with closing dates.

    We like a number of condominium listings in Hoboken in the 600’s. For $$$ reasons, we have come to the conclusion that we are either going to buy (i) a condominium in Hoboken listed in the 600’s for the mid-500’s or (ii) leave here and purchase a house for around $450,000 to $500,000.

    *Question – Are we wasting our time offering mid-500’s on listings in the 600’s? If so, we might as well focus on the house.

    We would love everybody’s thoughts….

    Thanks,
    Interested

  10. stan

    Great info as always Lori. Nice to see the school board win as well

    2% off and he didnt accept it??? Holy !@#$%. I mean, his carrying costs would equal that in a month or two. That is unbelievable, a legitimate offer has to be entertained. I would be beside myself if I was you, and he will definitely come back.

    I agree with the above poster, if you sell for less now, you make that up on the repurchase. Pick what’s best for you.

    Interested—– As lori stated, no offer should be cast aside, its an initial part of any negotiation. If you like a place, contact Lori and get an offer in at what you feel is sufficient. If both you and the seller are unhappy with the final price, it was a good negotiation.

    As an aside about burbs/urban, as Doug stated, it depends what stage you are at in life and what you want. The suburbs are very different from urban living. Each has pro’s and cons. One example, expect to see people you are friendly with in Hoboken much less. Once you hit the burbs, it becomes much more of an effort. You get much more space, but imo, you sacrifice convenience with shopping, sociallizing, commute(for most) etc. IThe tradeoff is more bang for your buck.

  11. Tiger

    Thanks Lori!

    I totally agree with you, if you are selling to buy you really are not loosing money, you just didn’t realize as much profit as you wanted. We look at transactions in isolation (I lost 10% or 15%) but we don’t look at the overall picture.

    My brother and I were discussing real estate in general and he had a similar opinion; he says once you invest $$$$ in ownership; chances are you will simply be moving that money from one house to the other as you move along regardless of market status.

    Take him for example; he bought his first home in Suburbia Houston, TX as a medical student resident in 2001 – eight years later he’s a married man, two kids, and both him and his wife work in downtown Houston. They decided they no longer want to do a 40 minute commute and to live ‘in the loop’

    They didn’t want to deal with the hassle of two mortgages so they competitively priced their old place. It went under contract two days after being listed. Yes they took a loss – but realized MASSIVE savings on their new home.

  12. patk14

    Doug, it doesn’t take a rocket scientist to realize the trend in real estate is down. I’d bet big money that the average price for Hoboken in April 2010 will be lower than now.

    Let’s take 2 examples. Someone who owns in Hoboken, having bought in 2002 at 350K which now sells for 500K. If they sell at 500K, rent for a year, and buy a place in the burbs for 500K, have they lost anything? They decide not to sell, ride out the market and sell for 400K in 2010. Simple economics tells me that they just lost 100K. Whether they reinvested in real estate or not, they went from a 150K gain to a 50K gain in 12 months. Folks, that is $8,333/month non-taxable. I’d take Lori’s advice and sell now, rent, and then buy.

  13. Lori Turoff

    Interested – As I already said, I don’t think you can generalize. It depends on the property. If it’s a high end unit at Hudson Tea, for example, with a river view it probably won’t work. If it’s a new unit in a building like the Emsee on Jackson, maybe. It is partially your realtor’s job to educate you on such things.

  14. Doug

    patk14 –

    Now I’m not saying prices definitely won’t decrease this time next year, but we’re starting to see some people saying we’re close to a bottom. Both Toll’s CEO and Kramer think this bottom for “80% of the country” is in a month or two.

    http://www.cnbc.com/id/30352485

    So, its really not that simple to say the trend will definitely be down.

    Just some food for thought…

  15. patk14

    Toll has a very vested interest in saying that we are at a floor. I actually agree with him in places like Phoenix and Lost Wages which were the 1st hit and will be the 1st to recover. Unfortunately, we are late to the game and have our pain in the future. Financials have been disproportionately impacted over the last 9 months and NYC/Hoboken/Brooklyn are disproportionately weighted to financial jobs and services related to those financial jobs. I would be absolutely shocked if real estate prices actually increase over the next year. Not going to happen despite Mr. Toll’s claim.

  16. Doug

    patk14, I respectfully disagree that Phoenix and LV will be the 1st to recover. Have you ever been out there? They grew geographically, which is always an issue. If real estate is about location, location, location, it has to be relative to something. When those places you mentioned above just grew by building new communitities in land that is aplenty, it takes away the relative nature of location. That is why people are finally starting to talk about two different types of real estate markets – those that expanded out and those that rebuilt on limited space. There are very different dynamics between the two. I would bet almost anything that NYC recovers before Phoenix or LV…that’s just about all you can predict for certain in this brave new world.

  17. Interested

    I just want to make sure that I understand things correctly:

    First Question – How can people say that Hoboken is close to the bottom when (i) prices haven’t come down that much, (ii) sellers are sticking to their guns in regard to prices, (iii) inventory is increasing week by week, and (iv) there are very little closings?

    Second Question – How much has Hoboken actually come down?

    Third Question – Who’s buying?

  18. Interested

    To expand on the first questions – (v) taxes are higher then ever and (vi) people are still being laid off….

  19. TS

    (i) – there is no set % that things must drop for them to hit bottom
    (ii) – confirms the fact that most sellers in this area aren’t in distress so can wait things out (hence fewer drastic price reductions to drag down market values compared to other cities like Miami/LV)
    (iii) – Inventory almost always grows in Spring
    (iv) – Closings measure sales pace from a few months ago. Under contract purchases, however, were 13 last week and measure current RE activity. A pretty strong #.
    (v) – hopefully taxes come down by year end, but I won’t cross my fingers
    (vi) Layoffs on Wall St have drastically slowed, and are now at the pace of typical turnover. If you haven’t been following the news, banks are outperforming.

  20. Interested

    In response:

    (iii) – Inventory almost always grows in Spring

    *inventory is HUGE and growing – nothing to do with the spring

    (iv) – Closings measure sales pace from a few months ago. Under contract purchases, however, were 13 last week and measure current RE activity. A pretty strong #.

    *sales are off (now or a few months ago) over 60% from 2003-2007

    (vi) Layoffs on Wall St have drastically slowed, and are now at the pace of typical turnover. If you haven’t been following the news, banks are outperforming.

    *layoffs are still coming – ask people who still have wall street jobs – besides that, businesses in NJ/NY are in bad shape

    Who will break first – Sellers or Buyers?

  21. TS

    Interested,

    I see you’ve conceded my other points. So let me finish off the rest:

    (iii) Inventory has been over 500 before. Admittedly it’s *large* but I don’t think it warrants a “HUGE”. The real problem has been on the demand side, which dwindled over the winter.

    (iv) Again, we were discussing the CURRENT sales pace, so figures from months ago won’t cut it. I won’t even try to claim that sales are doing spectacular; I merely was rebutting your claim that there are few closings by pointing out that metric reflects the market from 1-2 months ago and that, instead, we should look at current under contract levels (which have are very encouraging).

    (vi) Again, layoffs have drastically slowed and are now at typical turnover. I can repeat it again if that helps you understand. And why should we expect a wave of layoffs when Wall St is becoming profitable once again??

    Who will break first? It’s hard to say since I would have to know sellers’ personal situations. Buyers do have the upper hand though since they aren’t hurt by waiting. But, as you pointed out and which I’m grateful for, in this area buyers on the whole have been capable of holding out.

  22. stan

    ts- with all due respect, what the heck are you talking about. Wall streets numbers have been affected by bs accounting changes and free money thrown at them. outperform? ha…..The layoffs are continuing. wachovia/ubs just announced deeper cuts. The street will not be hiring for some time.

    if you really looked at the earnings you would see how pathetic they are. smoke and mirrors……

  23. Tiger

    I agree that financial recovery is still to come, and layoffs will probably continue on wall street and surroundings – I can’t say we recovered when Citibank, BoA, and GE stocks are still in the single digit / early teen, however I also agree regarding the different dynamics in the NYC area.

    Prices will come down – eventually people will give up and sell, but like I mentioned many times the 500+ number is useless; how many of those **REALLY** want to sell or have to sell? That’s a very big question, and unfortunatley we cannot tell from the MLS data alone.

    It’s quite unfortunate that many sellers out there are timewasters; they really don’t want to sell; they are ‘feeling out’ the market, but in the process waste the time and effort of their Realtor; plus real potential buyers.

  24. patk14

    I work in the financial industry. For those of us still employed, we realize that our total compensation has been reduced permanently. We all know that our options are extremely limited and so do the powers to be. There will likely be another job bloodbath at the end of 2009 as the 2nd and 3rd tier players come to realize that they overstaffed during the good times and the business volumes can no longer support their staffing levels. Declining incomes with much greater risk of job loss equate to not being willing to take a chance on a long term commitment to purchase a home. Hence, the declining sales volumes and increasing inventory all over the metro area.

    Was out in LV earlier this month (Final 4 weekend). What are they down from peak, 60-70%? There are actually value investors buying there now and in Miami. They have taken their pain and many speculators have been ruined. But the current low prices are attracting buyers. San Fran down 40% with more room to decline.

  25. TS

    Patk14,

    Please tell us where you are getting this expectation of another bloodbath of layoffs on Wall St. I’m sure a select few might believe this is the case, but this is by no means expected generally.

  26. TS

    And Stan, by “outperform” I mean that their earnings outperformed analyst expectations. What is hard to understand about that?

    But you seem to be a financial analyst unlike us. So please explain to us why the earnings are really “pathetic” and “smoke and mirrors”.

  27. patk14

    We reported a strong 1st quarter. If we had to mark-to-market our loan book, it would be real ugly. Would I be selling performing loans in the 70’s? No, but that is what I would receive if I had to sell right now. Defaults are continually climbing on corporate credits (companies gorged on easy credit much like home buyers and now are paying much higher margins to refinance, real storm arises in 2012/2013 when the loans done in 2005/2006 come due). The only growth market on Wall Street is work-outs and restructurings.

  28. Mark

    http://www.nytimes.com/2009/04/21/business/21sorkin.html?_r=2

    how can you still believe in wall st lies is beyond me

  29. TS

    Patk,

    No one is saying the picture is rosy for financials, however anyone trying to claim the earnings for them were not encouraging is really an eternal pessimist – or someone with a vested interest for them to underperform.

    To call them “pathetic” is in fact just that: pathetic.

  30. stan

    TS-

    Patk already answered it for me, but the fact that mark to market was changed is the real reason for the earnings bump. I think my apt is worth 1 million, so I am a millionaire. (even though someone would only pay 600k for it, savvy?)
    Secondly, Goldman’s earnings were primarily govt payouts funnelled thru AIG. One time shots in the arm, throw in the fact that gs, ms et al did not even count the month of december???? hello?

    see below article: http://www dot cnbc dot com/id/30350723/

    “In December, a month that was not included in either the first-quarter or its fiscal fourth-quarter results, the bank had a net loss applicable to shareholders of $1.6 billion.”

    Outperform, ha. Lowered expectations + Smoke and mirrors. More layoffs to come, in fact they havent stopped. We haven’t even discussed the exposure to commercial real estate the big boys have…..Don’t just read the headlines, actually look at where earnings are reported from…..

  31. stan

    TS-

    Patk already answered it for me, but the fact that mark to market was changed is the real reason for the earnings bump. I think my apt is worth 1 million, so I am a millionaire. (even though someone would only pay 600k for it, savvy?)
    Secondly, Goldman’s earnings were primarily govt payouts funnelled thru AIG. One time shots in the arm, throw in the fact that gs, ms et al did not even count the month of december????

    see below article: www dot cnbc dot com/id/30350723/

    “In December, a month that was not included in either the first-quarter or its fiscal fourth-quarter results, the bank had a net loss applicable to shareholders of $1.6 billion.”

    Outperform, ha. Lowered expectations + Smoke and mirrors. More layoffs to come, in fact they havent stopped. We haven’t even discussed the exposure to commercial real estate the big boys have…..Don’t just read the headlines, actually look at where earnings are reported from…..I am not a doom and gloomer, I just dont hide from the reality of the situation

  32. TS

    Stan,

    Say what you want, they are outperforming expectations which is an encouraging sign. No way around that.

    Secondly, the way you portray the new mark to market rule is disingenuous. Please, try to maintain a level of integrity.

    As far as layoffs, as I said they have drastically levelled off compared to what was happening late last year and earlier this year. You cannot deny this, though you have tried to repeatedly.

  33. TS

    “Secondly, Goldman’s earnings were primarily govt payouts funnelled thru AIG”

    Also, this is false. The earnings came from the FICC division. And, *take this with a grain of salt*, GS’s CFO has repeatedly stated that the AIG payout had no material effect on Q1 bottom line.

  34. stan

    I have tried to deny nothing, I just told you you are incorrect, on a number of things. Layoffs have not stopped, the only way it improves is if firms are hiring, which they are decidedly not. I want things to get better as much as anyone, but to act as though they are, when they are not is what is disengenuos.

    Try to maintain a level of fact. Show me where layoffs have levelled off. That would mean we are hiring as much as we are firing, no? Show me where profits are coming from? Show me where the bad assets went…..do so and you can sway my opinion…

  35. TS

    Profits on most desks/banks are coming from FI.

    Layoffs now are not even close to what they were late last year/early this year. I don’t know what you want me to say.

    Some people are stuck on their views and will cherry pick data to confirm it. I by no means expect a run-up in RE prices, or for the market recovery to be steady upwards. We’ll have set-backs, have ups and downs, but I believe 1 year from now we’ll be in better rather than worse shape. And the most recent #s coming out are encouraging. You can try to explain them away, but in the end you’re doing just that. Avoiding reality in order to stick to your view. Best

  36. Buyer

    I put in an offer last week for a property. The Seller had it appraised and I was willing to pay the appraisal price! They passed… and took it off the market. I was pretty confused! I figure if I am willing to pay what they can re-fi it for (today) then I was being pretty darn reasonable as a buyer!!! If you arent serious about selling then you really shouldnt be marketing your property.

  37. Ron

    Buyey – why did they share the appraisal with you?

    How far off from the offer price was it?

  38. Buyer

    Initially I came it at 15% off asking and they got me up to the appraisal price (which was still below asking). I figured I can’t do any better than that. I’d have to be crazy to pay more than a bank is willing to lend against. I even offered to waive a mortgage appraisal contingency. Now that its been on the market and hasnt sold it will be much harder to refi in in today’s lending environment… That MLS doesnt go away when the underwriters are looking to refi you property..

  39. stan

    Buyer- seemed fair to me…maybe they were under water with the new appraisal?

    one door closes, another opens

  40. Buyer

    Could be but the market is simply broken…

  41. Ron

    yeah…you would be crazy to pay over the bank appraisal price…….I’m still curious why they shared such damaging information with you?

    Why did they even have an appraisal done?

  42. Tiger

    Sorry to hear Buyer, it’s not meant to be.

    THAT IS WHAT I AM TALKING ABOUT! I don’t think they were serious, unfortunately those sellers waste everyone’s time, and needless to say flood the market.

  43. stan

    Fuzzy math? Could this be enabling profits in FI?????naaahhh…… FROM wsj:

    “It’s like December never happened: In its 10-K in January, Goldman Sachs told investors that it would move its fiscal year-end from November to December, which erased the entire month between Nov. 29 and Dec. 26 from the firm’s financial record. CFO David Viniar did, however, lay out the carnage that took place in December, when Goldman would have booked a $1.3 billion pre-tax loss.”

  44. stan

    last post on the Fuzzy Math Goldman used to help extend this rally. Trying desperately to pay back TARP…..

    Dick Bove:

    “A sweet quirk in reporting let Goldman avoid including in its latest results $1 bn in losses that hit Goldman in December. In effect, the entire month of December has dropped into the Twilight Zone.

    Because Goldman declared itself a new bank holding company–thanks to the fact that it owns an industrial loan company in Utah–it switched to a calendar year instead of a fiscal year, which would have ended in the usual month of November.

    The move let Goldman avoid $1 bn in net losses it incurred in the month of December alone. Factor those numbers in to the first quarter, and Goldman’s results drop to $800 mn.

    “Consequently, Goldman reported earnings for two periods in its announcements today. The earnings in the stub period that included only the month of December, 2008 were a loss of $2.15 per share. The earnings for the period ending in March, 2009 were a profit of $3.39 per share. Putting the two periods together, Goldman reported a profit of $1.24 per share.”

    Tarp Funds: ya think this has to do with the record profit?? Probably won’t happen again…..

    “Goldman got a full $12.9 bn in US taxpayer money from the collapse of AIG, representing collateral calls Goldman had with AIG, and also its sale at 100% of the face value of collateralized debt obligations that the Federal Reserve purchased so AIG could avoid having to pay out on its insurance contracts on those securities.

    A full 100% that the US taxpayer paid Goldman, even though those securities were likely worth much less on the dollar. Goldman and other counterparties were paid by the taxpayer through AIG’s “conduit” for losses, losses that didn’t yet occur, at 100 cents on the dollar.”

    source: foxbusiness.com/2009/04/14/look-closer-at-goldmans-numbers/

  45. TS

    Strategy:
    When news unfavorable to your market view comes out, release all possible conspiracy theories available.

  46. stan

    An unclever response from someone in over his head.

    WSJ and Dick Bove conspiracy theorists, that’s rich.

    Because you need or want things to be better does not make it so. Act like an adult, my thrashing you on this board is in response to your flippant dismissal and condescending retorts to the above poster. The fact that you had no data to back anything up is evidence enough. Back to Kannekt for you

  47. lori

    Be nice, guys.

  48. TS

    Stan,

    Ok, my last post here as I see you are taking a very rude turn.

    I am in over my head because you make claims like: “Secondly, Goldman’s earnings were primarily govt payouts funnelled thru AIG”? When in fact the revenue came from a record setting quarter for FICC (6.6BN net revenue).

    Indeed, I am in over my head because I am not used to making up data to back up my view.

  49. Tiger

    Ok guys let’s all relax and have a good deep breath.

    I think it’s a great idea to keep on top of things, the market, the real estate market, jobs, wall street number, but you have to also set the limit as to what to do with this knowledge. Don’t drive yourself crazy trying to predict the unknown; but at the same time have a plan so as not to get caught off guard.

    Market up or down; all I know is that we have a fantastic weekend coming up; 80 degree weather! Enjoy what Hoboken has to offer! Meet up with friends for dinner (get a table outside), have a walk on the waterfront; read a book in the park; and if you have a deck, do a last minute BBQ (my friend is doing that tomorrow- can’t wait!). Don’t waste it! Have fun Hoboken!

  50. deb

    I read thru the posts here, great site. A lot of good info. I own a rental property in Hoboken. Although I won’t go into as much detail, I have to agree with the doom and gloomer above

    Most profit numbers from the street were bs…..a lot of one time earnings there. We are in for a world of hurt and anyone saying things are getting better needs to accept reality. A lot more job cuts are coming down the pipeline, unfortunately.

    You don’t have to embrace it, but we will be at double digit unemployment by September.

  51. redman

    After an Off Year, Wall Street Pay Is Bouncing Back
    By LOUISE STORY

    The rest of the nation may be getting back to basics, but on Wall Street, paychecks still come with a golden promise.

    Workers at the largest financial institutions are on track to earn as much money this year as they did before the financial crisis began, because of the strong start of the year for bank profits.

    Even as the industry’s compensation has been put in the spotlight for being so high at a time when many banks have received taxpayer help, six of the biggest banks set aside over $36 billion in the first quarter to pay their employees, according to a review of financial statements.

    If that pace continues all year, the money set aside for compensation suggests that workers at many banks will see their pay — much of it in bonuses — recover from the lows of last year.

    “I just haven’t seen huge changes in the way people are talking about compensation,” said Sandy Gross, managing partner of Pinetum Partners, a financial recruiting firm. “Wall Street is being realistic. You have to retain your human capital.”

    Brad Hintz, an analyst at Sanford C. Bernstein, was more critical. “Like everything on Wall Street, they’re starting to sin again,” he said. “As you see a recovery, you’ll see everybody’s compensation beginning to rise.”

    In total, the banks are not necessarily spending more on compensation, because their work forces have shrunk sharply in the last 18 months. Still, the average pay for those who remain — rank-and-file workers whose earnings are not affected by government-imposed limits — appears to be rebounding.

    Of the large banks receiving federal help, Goldman Sachs stands out for setting aside the most per person for compensation. The bank, which nearly halved its compensation last year, set aside $4.7 billion for worker pay in the quarter. If that level continues all year, it would add up to average pay of $569,220 per worker — almost as much as the pay in 2007, a record year.

    “We need to be able to pay our people,” said Lucas van Praag, a spokesman for Goldman, adding that the rest of the year might not prove as profitable, and so the first-quarter reserves might simply be “sensible husbandry.”

    Indeed, last year, when Goldman lost money in the fourth quarter, it did not pay out some of the compensation it had set aside when earnings were stronger.

    At other banks, pay scales tilt in favor of particular units. JPMorgan Chase, for example, is setting aside what would total $138,234 on average for workers. But in the bank’s trading and investment banking unit, if revenue stays at first-quarter levels, workers are on track to earn an average of $509,524 over the year. That figure was $345,147 in 2006.

  52. TS

    aahh, the benefits of assuming multiple identities, right Mr Reality?

  53. redman

    I am a long time reader but new poster…that was my first post…I have no other names on this site…just thought the above article was relevant to the discussion…

  54. Lori

    Redman has never posted before today as Redman or another identity. Thanks for your contribution, though, Redman.

  55. potential_buyer

    I just came across an interesting article which touches upon something that has come across this blog on several occasions. The piece in WSJ does not go into as much detail as I would have liked, but it certainly does highlight one of the theories of why the Hoboken market hasn’t adjusted to the levels other parts of the country have.

    http://online.wsj.com/article/SB124057365983752607.html

  56. TS

    Sorry Redman, I wasn’t referring to you. Let’s bury this though because I find the site very informative and don’t want to take us away from that.

  57. anonymous

    23% drop in NY expected by traders from 3/31/2009 to dec 31 2009…expect Hoboken to be same or worse….

    http://www.rpxdealers.com/rpx/report.html

    why you haven’t seen the full hit yet:
    “Prices in the Manhattan condominium market have taken longer to fall than prices in many other markets. In part, this is because sales of homes out of foreclosure are only a small share of total sales in Manhattan, but have become a large share
    of total sales elsewhere. Sellers of existing condos in Manhattan have been reluctant to reduce prices, preferring instead to take their homes off the market and/or offer them for rent until prices improve. In contrast, when a bank or other institution holding a property after foreclosure puts a home on the market, it drops the price rapidly until a buyer is found in order to clear inventory. Motivated sales like these are still uncommon in Manhattan.”

    http://www.radarlogic.com/research/RPXManhattanNeighborhoodsReportforFebruary2009.pdf

  58. Tiger

    anonymous, I don’t think I can follow. How will prices fall 23% over the next year if most sellers in Manhattan are not willing to sell, and the number of foreclosures is very little?

    I think the article potential_buyer posted hits the nail on the head; Unless strongly motivated by savings on another deal, or certain circumstances, most homeowners are not willing or don’t have to sell.

    Lori actually mentioned that a few weeks ago about Hoboken; the city is relatively well off hence it doesn’t look like we will see many foreclosures.

    The more I read about this, the more I think we are on an L, not a V, recovery; probably prices will continue to drop, hit bottom, and then rise again, but both movements will be incredibly slow that they will look almost like a flat line

  59. TS

    anonymous,

    It is rather easy to copy and paste articles showing that someone believes something that is unlikely to occur. You can find a proponent for any position these days, no matter how unlikely. The critical mind must sift through all these predictions, construct one’s own reasoning and logic, and then come to one’s own conclusion…and not simply defer to someone just because they confirm what you hope.

    But I realize not everyone, myself included, has the time to dedicate oneself to being a housing analyst. Therefore, I believe the best way to measure what traders on average – not one or two traders – think of the future of real estate is to look at Case-Shiller futures. Those futures indicate an approximate 5% decline over the next 12 months for US home prices.

  60. stan

    havent posted or been here since last week……

    Metro Area February 2009 Change from January Year-over-year change

    New York 178.16 -1.60% -10.20%

    “The rates of decline also accelerated in Charlotte, New York and Washington.”
    “We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” said economist Joshua Shapiro of MFR Inc”

  61. stan

    havent posted or been here since last week……

    Metro Area February 2009 Change from January Year-over-year change

    New York 178.16 -1.60% -10.20%

    “The rates of decline also accelerated in Charlotte, New York and Washington.”
    “We continue to believe that it is unlikely that we are anywhere near a bottom in nationwide home prices,” said economist Joshua Shapiro of MFR Inc”

    http://online.wsj.com/article/SB124092346703363431.html#articleTabs%3Darticle

  62. TS

    The seasonally adjusted condo values from Case-Shiller are more relevant here.
    New York 209.45
    Change from Jan to Feb: -1.26%
    YoY Change: 7.9%

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