2009 Aug 12th

The Wednesday Weekly Wrap Up – Hoboken Condo Sales & Inventory for the Week of August 11th

Inventory is shrinking! Another week of fewer homes for sale. The other thing that jumps out at me is that the listed units and new listings are still at a price per square foot significantly higher than that of the sold units.  To see the report with links to the listings, please complete this:

Here are this week’s numbers:

Here is the Weekly Wednesday Wrap Up from Aug. 4th.

Here is the Weekly Wednesday Wrap Up from July 28th.

Studio & 1 Bedroom Hoboken Condos:

12 new listings. Average list price $393,490. Average $590 per sq. ft.

178 total active – $397,780 average asking price. 106 average DOM. Average asking price $553 per sq ft.

7 dabos. 75 average DOM.

3 sold for an average price of $396,666 or $490 per sq. ft. in 101 days.

9 price reductions.

Two Bedroom Hoboken Condos:

12 new listings – average list price $548,483. Average $533 per sq. ft.

277 total active – $609,668 average asking price. 111 average DOM so far. Average asking price $521 per sq. ft.

4 dabo’d. 142 average DOM

5 sold – $588,600 average sales price or $496 / sq. ft. Average 193 DOM.

As a listing agent, these are the kind of listings I would dread. Sure they sell eventually but after a long tortuous dealing with the seller and a ton of work. Not an efficient use of my or any other agent’s time. An almost 20% price reduction over dragged out over the course of more than a year! What’s with increasing the price?

16 price reductions.

Three Bedroom and Larger Hoboken Condos:

69 active 3BR condos – $950,608 average asking price. 113 DOM so far. Average asking price $519 per sq ft.

5 new listings. Average price $917,780. Average price $496 per sq. ft.

None dabo’d.

1 sold for sales price of $459,900 in 115 days for $369 per sq. ft.

3 price reductions.

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. Like this report, to receive the map with the actual links, you will have to request it.

 

Want to Receive New Listings & Price Reductions Daily?

If you would like to be emailed the new listings and price reductions each weekday in either 1br, 2br or 3br categories just email us at info@hobokensbest.com letting us know which size(s) you would like and we’ll add you to the daily email list.

 

You can always contact us at 201 993 9500.
Thanks for reading and, as always, we welcome your comments!
  1. Andy

    Transportation has had a huge impact on Hoboken. Look at the light rail. You think people would have been buying condos as far back as Jackson or Madison if there was no way to get there except to walk? The rehab of the old factories and teardowns that occured on the west side of town were huge improvements to the area. I used to live on 4th and Adams in 2002 and I can tell that the area has had some major development in the past 7 yrs. I hardly recognized it anymore which is a major improvement.

    And I agree completely w/ the gentrification of the town. Young poeple stopped leaving in droves and started to settle down. That has a direct impact on the demographic of the town. No longer do you have just transients who care less about the town other than its drinking establishments. You have couples settling down and having children. New parks, people w/ animals everywhere and a feeling of safety that only Hoboken seems to offer. Now, for anyone to draw comparisons and say that housing values need to return to levels when this town was not a thriving gentrified city is not being realistic. Thats like saying Manhattan should be priced more like Queens because at one point all of Manhattan was more like Queens. Hoboken has always commanded a premium to our neighbors because we offer services and amennities that our neighbors do not.

    The schools have not had a major impact on recnt growth. In fact only recently has it become a major issue mostly due to the fact that people have bought apartments and had children and can’t afford to send them to private school on top of getting hit w/ a 47% tax increase. This was not a deciding factor for many who moved to Hoboken in the past decade or so and I would suggest that if our tax bills didn’t increase there would be only a minority who even cared enough to try to change the school board.

  2. Laki

    All of you discussing Hoboken specifics when it comes to the future prices are arguing about second order effects. Sure they matter on a margin, but the overall real estate trend in the New York metro area matters A LOT more. Hoboken does not exist in a vacuum. What if Manhattan real estate drops to $500 per square foot? (This is where the prices were in early 2000s). This is a first order effect. If you think in this scenario Hoboken prices decouple and stay strong – then you must live in a different universe than me.

  3. Andy

    Laki, if manhattan real estate drops to 500$ / sq ft then you’ll see major economic pain unfold. NYC was bought and bid up by anyone and everyone including those overseas. Will prices come down there sure due to oversupply but eventually you will find a bottom. To throw a figure out there which btw is half of what the going sq ft rate for much of manhattan is absurd. Are you all hoping for some doomsday scenario because you want to swoop in like vultures picking a carcass? Be realistic. I’ll entertain 20% maybe even 30%. If it ever hits 50% I’ll eat my hat 😉

  4. SJ

    Laki-

    What on earth makes you think that Manhattan real estate prices are going to drop to $500 per square foot??

    And if that ever happened I don’t think anyone here would argue that that wouldn’t affect Hoboken prices!!

  5. Tiger

    Let me know when Manhattan prices drop to $500 per sq ft, I’ll be very interested in buying a second condo.

  6. bz

    Laki, our posts were to homeboken’s comments about if Hoboken’s changes in the past years justifys the past RE bomming.

  7. patk14

    I’ve been here over 10 years now and there have been improvements. I live on Garden Street so haven’t seen the massive developments on the western side of town. Those areas (so I’m told) have been greatly improved over the last decade. The development of the northeast sector was under way back then and has brought higher income people to town. Pier A has been a nice development. Not much has changed at all along Washington Street during this time, not too many new restaurants or shops that would fuel real estate prices. Same bars/restaurants by the PATH (Texas AZ has been there for something like 20 years). It was a safe town 10 years ago, less so 20 years ago. Plenty of police and little violent crime.

    Compared to what existed west of Willow, prices in those sections have been upgraded majorly and easy credit (Hoboken didn’t require the level of down payment that Manhattan did) drove prices up rapidly. Easy credit is gone, people flipping are gone, prices are steadily declining, so we’ll likely see continued downward price movement. The town fiscal situation and rising taxes were not expected and have had a negative impact on prices. Paying $1,000/month in taxes reduces affordability.

  8. Andy

    Patk14, if you’re paying 1k a month in taxes you must enjoy the mansion on castle point you’re living in. Otherwise you are really getting screwed and should appeal your bill. But I agree with you the tax situation does nothing to help our situation. NJ already has the highest property taxes Hoboken raising them doesn’t help.

    Hobojoe, I’ve been clammoring that on this site for days now. If you lost your job I’m sorry for you but the rest of us who are still employed are not poor and not broke and not selling unless we absolutely have to. Ridding the town of developers overstocked cookie cutter condos is exactly what this town needs. If it happens below market values so it expidites things than I’m all for it. Supply and Demand dictate price. We’re sliding down the supply curve as we work off inventory. Once that is done and if we stop people from over developing and turning the town into highrises then we’ll see eventual price increase due to limited space constraints.

  9. Andy

    Need to clarify was not referring to Hobojoe as if he lost his job. Rereading it didn’t sound right. Meant it in the generic.

  10. leafgreen99

    Great reading!

    It’s not only the uptown brownstones paying in excess of 1k/month in taxes (and I do now people paying twice that) but from reading the MLS links in Lori’s posts, there are plenty of condos playing 15k in annual taxes and that’s not for a single family home…

    Anyway, on a separate note: is there any blog/website comparable to this that evaluates real estate in other Hudson County towns?

    And, I know many posters here regularly cite tax records and sale records. Where do you get that information? If anyone could post a link, I would appreciate it.

    Thanks.

  11. Laki

    Why is 500 per square foot so outrageous? We were there just 7-9 years ago. Look at the following chart:

    http://analytics.radarlogic.com/radar-logic-home/historical-data.aspx (select Manhattan Condominium).

    Prices can go down the same way they went up. This is true for all asset classes including real estate. You are naive if you believe this CANNOT happen in New York. It might not, but this is different than CANNOT. It happened in other cities and the world didn’t come to an end.

    If you simply add up all the condos that exist in Manhattan you will get a number that makes Hoboken seem like a drop in the ocean. Now figure out how much money an average person needs to make to be able to afford an average Manhattan condo (mortgage payment + RE taxes + maintenance fees that make up lets say 30-50% of their monthly after tax income). Then think about what percentage of people that live in Manhattan that you know personally make that kind of money. You’ll realize the numbers don’t come even close to adding up. You’ll realize that very few of your friends are able to afford the median manhattan condo… This makes the current status unsustainable. Either incomes have to rise or RE has to drop. I wouldn’t bet on the first one occurring anytime soon (if ever in real terms).

  12. Tiger

    Laki, correct me if I’m wrong but I don’t recall Manhattan being exactly affordable, even in the hip days of the 70s.

    And like I said, I really would be **VERY** interested in buying a nice Manhattan condo for $500 / sq ft. Holly smokes that means I can get a 1000 sq ft for $500K! That would be a dream come true!

  13. TS

    Laki,

    I don’t think anyone is arguing it’s a logical impossibility for prices to tank to 500/sqft. That said, it seems very unlikely except under doomsday scenarios.

    That said, the data you linked is of questionable merit (unless I’m misreading something). Miller Samuel data conflicts with it. The following is average price per square foot of Condos in Manhattan:

    Year – Average Price per Square Foot
    2001 – 691
    2002 – 741
    2003 – 765
    2004 – 873
    2005 – 1086
    2006 – 1142
    2007 – 1225

    I don’t think this is inflation-adjusted, which makes it even more unlikely to return to 500/sqft, but I can’t say that for certain.

  14. Laki

    The link to the chart I posted is from radar logic which is the underlying index for the tradable forwards (RPX). So people trade hundreds of millions of dollars and these bets are tied to this index. This gives it some legitimacy. Also, the methodology for this index is published so you can see how it is computed (it roughly tracks the median price per square foot of ALL transactions in a given time frame). I’m not sure what the Miller Samuel data is and how it is compiled. I’m very comfortable with RPX because I know the methodology used and because it has virtually no subjective inputs (only looks at prices at which properties move, and it ignores things like listing prices, appraisal values, etc etc.).

    As far as the comment that manhattan condo prices were never affordable – well they’re extremely unaffordable right now. just look at median price / median income and median price / median rent ratios over time and you will be enlightened. Massive correction is needed just so these ratios revert to levels observed historically.

  15. TS

    Laki,

    Miller Samuel provides the most trusted data for the Manhattan market. The differences are quite wide between his and the one you posted, and based on memory I don’t recall prices being that low earlier in the decade as the chart indicates. However, this could boil down to a difference in measure since Miller Samuel had the peak above 1400/sqft, while Radar Logic’s had it at 1200/sqft. The point being you can still trade off the data since it tracks similar price moves on a % basis.

    Personally I believe Miller Samuel is going to give you more accurate data since he specializes in the Manhattan market.

    Given the large disparity in the #s perhaps we could better frame the debate in terms of % drop from the peak rather than real $ terms.

  16. Laki

    “That said, the data you linked is of questionable merit (unless I’m misreading something)”.

    You are misreading something. RPX indices are the most transparent and objective data series that exist out there. It is not a coincidence that housing derivatives are based on them. And these housing derivatives are backed by all the wall street firms and have traded billions of dollars worth of contracts. Short of committing outright fraud there is no way to manipulate this series or have any subjectivity in it.

    On the other hand I don’t know what legitimacy Miller Samuel has. It might as well be completely legit as well (i simply have no idea) and all the differences could be due to the methodology used and the fact that your data series looks at average prices wheras RPX’s are median. Remember, average prices can be heavily skewed by outliers (i.e. high end luxury market), wheras median prices are not. Median prices are a better measure of a representative home in a given area. Half of the homes get sold for the price lower than the median one.

  17. TS

    Laki,

    It could be due to the difference in median vs mean, or perhaps they adjust for inflation. Perhaps that’s why we were talking past each other. When you say prices are going to 500/sqft and someone else says that’s too far that’s due to the fact you’re using different metrics (mean vs median) and different sources of information (most people cite Miller Samuel data in that regard).

    As I said though, perhaps your view that 500/sqft isn’t unreasonable could better be framed in terms of % drop from the peak as that way we factor out the different metrics and sources, which appear to each have their own merit.

  18. Laki

    In terms of % – I already stated my prediction – down 30-40% from where we are today. this brings you down to to the 500-600 ppsf on the RPX index that I was referring to.

  19. Laki

    RPX is not inflation adjusted btw.

  20. Andy

    Good luck w/ $500/sq ft. I hear Harlem is up and coming for the 3rd time this century. The point is unless manhattan has a mass exodus of business and people take a 30-40% salary cut across the board it will always be expensive for the fact that London/Tokyo/Moscow/etc are all expensive. Sure you might be able to find bargains on 12th ave in manhattan but a desireable place to live will always be desireable and command a premium. Hence why Hoboken was always priced higher than Jersey city heights. No one is taking 30-40% pay cuts unless they are desperate and bonuses are coming back as well. I sincerely think doomsday has passed and no major earthquakes occured. I think the price drops you are looking for will be felt in the ex-urbs of the Poconos and upstate NY.

  21. Lori Turoff

    I agree, Andy. Even here in depressed Sullivan County in upstate NY – where I am today – the ordinary properties are bargain basement ($200k gets you a nice house and 5 acres) but lakefront commands a premium. It’s all about location. The people who do have the means will buy the prime properties and the junk will not sell unless it’s priced low.

  22. Bill

    “In terms of % – I already stated my prediction – down 30-40% from where we are today. this brings you down to to the 500-600 ppsf on the RPX index that I was referring to.”

    what is the time frame for this prediction?

  23. Laki

    Andy, you seem to be saying that in order to return to the 2001 state of things in Manhattan we need to undergo a “mass exodus of businesses” and a “doomsday” scenario needs to play out. Were things that awful in 2001? I remember 2001 – things didn’t seem all THAT much different to me. In my opinion no cataclysmic event needs to take place in order for pricing to revert to those levels.

    And if you were to isolate the population of marginal real estate buyers in manhattan in the last 10 years – you bet their salaries are down 30-40% or more. I’m not counting someone making 100K – that guy didn’t lose 40% but then again he never could afford to buy in manhattan. But if you look at people making 500K+ these people’s salaries are way down. I work in finance. I personally know tons of people who used to make this kind of money from 2004 to 2007 – and their salaries today are way down. Most of them are down to 150K base and those that are lucky might take home 50-100 K bonus. Those that are not lucky don’t have a job anymore and the base case is 150K base and no meaningful bonus whatsoever.

    In my opinion the bonuses are not coming back.

  24. Laki

    “The people who do have the means will buy the prime properties and the junk will not sell unless it’s priced low.”…

    In general I agree Lori, however, nowadays there are tons of “prime properties” and not so many people that “have the means”. There is simply not enough people to buy all these apartments. And this will become clear in the next 2-3 years.

  25. TS

    Laki,

    What makes your certain that Wall St bonuses will persist at last year’s levels or worse indefinitely? The #s from the first half of this year are showing otherwise, as well as the guidance that many are getting from their desks.

  26. Andy

    Laki, I work in finacne as well. Bonuses are def coming back at good firms. Getting $1mm for doing your day job is not going to fly anymore so sure some people will see declines but all of my friends in finance are still doing well and in fact many received raises and retention bonuses so maybe the Tea Building and Shipyards aren’t going to sell so well in the high end of Hoboken but the 500-600k range can easily be afforded by the majority of town. In fact I’d say for Hoboken specifically that is the bulk of our market. The high end units only make our town more expensive due to the relative nature of pricing.

    Manhattan has the exact same effects but in a grander scale because of desireable neighborhoods. I’ll give you 100$ when Gramercy Park/CPW/SOHO return to 500$/sq ft rents. My point and perhaps it was lost in my reply was that location dictates a premium in price. Blanket asumptions of returning to statistical means is not an accurate view especially when looking at housing because of the “got to have it” factor. If a celebrity moves down the street and you put your place on the market some buyer may pay a premium to live near that celebrity(this example sucks so please forgive me but you get the point). I personally feel that Hoboken has a real leg up on its surrounding communities on the NJ side w/ Edgewater slowly giving us a run for our money. Those condos on the water are huge and have the same wonderful views. But Hoboken has the transportation and nightlife benefits that Edgewater has yet to build.

    Laki, I do agree not everyone has the means to buy expensive apartments and so they shouldn’t and the best thing that will happen to Hoboken is greedy developers will go away and stop building poorly constructed cookie cutter condos in the NW section of our town adding to housing stock. As someone in Finance you know supply and demand. If we reduce oversupply eventual equilibrium will be achieved and demand which still exists will begin driving price apreciation all over again. The worst happened and is most likely over. U shaped recovery is being forecasted by many reputable sources. Why would NY be subject to a 40-50% price correction if the rest of the country is already starting to come out of its recession? I don’t buy the argument that we’re suddenly all smart money investors and are squeezing our 2 pennies together as tight as we can.

  27. Tiger

    Andy, I kinda like Edgewater, but if only they fix River road and that horrible three-way intersection that leads to it :-)!

  28. homeboken

    From Andy’s post:

    “If we reduce oversupply eventual equilibrium will be achieved and demand which still exists will begin driving price apreciation all over again.”

    This should happen in about 5 years. “Demand, which still exists” How can you say that with a straight face? Demand has fallen off a cliff.

    And supply? Take Lori’s number above and add about 100 to account for the developer owned units that are not on the MLS. Then add about 300 for the buildings that are planned and approved, but haven’t broken ground yet but will within the next 12-24 months.

  29. Andy

    Are units selling? Yes then demand still exists. We have never had a prolonged stretch where no sales occured. Sure the steady clip of boom sales is over but I”m not using that as a reference point as normal demand. Good units are actually still getting multiple offers. You can’t cherrypick what data you choose to acknowledge. I repeatedly have stated that we are going to see a smaller than 30% price reduction due to oversupply and fear in the market. But I do not think unless there is some catastrophic event you will see a decline to pre 2001 levels.

  30. Andy

    Sorry didn’t see this be4 poting but Homeboken those developers that have buildings planned and approved will most likely not be building new units in Hoboken. They will cancel before any ground breaking happens and either return deposits or run for the hills due to over supply. I think it may very well take 5 years to work off the supply but I seriously doubt you will see any 20+ unit buildings come onto the market anytime soon. That is why I always felt that the West side of town with the newer overdeveloped condos would be hit harder than the more established NE side of town(excluding maxwell) in the downturn. This was all due to personal observations of lack of amenities and the walking distance factor discussed at length on here.

  31. homeboken

    Andy – You see that 12 story rental tower going up on 14th street? True it is rental, but builders will build. They will just realize less profit when they sell.

    The costs of carrying vacant land are brutal. I work in multi-family and from my experience, builders will build to a lower price-point, sell and make a little less money. They will not sit on vacant land for years waiting for the market to come back.

  32. homeboken

    One more thing – Do you know that the NE section of town is slated to be developed with 2 more 12 story Maxwell buildings and another 12 story Tea building? Both Toll brothers projects that are part of their master plan. There will be plenty of brand new inventory coming on line in the next 5 years.

  33. Andy

    Did you read the Toll Brothers financials? They are putting those projects on hold indefinately due to funding constraints. In fact they may turn the land into a park or parkinglot whichever is more economical for them. But yes their original master plan was to build those 2 additional buildings. I followed that very closely in the fall of last year as Toll has several developments up where my parents live as well.

  34. homeboken

    Andy – Do you have any facts that support the claim that they will turn that area into a park or parking? Or is that what you “hope” they will do with the land?

    Parks = Zero dollars

    Parking – Close to zero

    When you consider what they paid for that land, I think you will come to a different conclusion on what it will be used for. If you have some facts that they are going to utilize this land for a use other than residential living space, I would like to see it.

  35. Lori Turoff

    Toll has always had an ability to “dribble” the new units onto the market so they could artificially hold down supply and boost sales prices. The 2 other buildings planned for Maxwell and at least 2 more for Hudson Tea were supposed to be built by now. That they haven’t done it, right there tells us something. (Applied also owns the pier in front of Hudson Tea and could build on that). My guess – and I have no way to know this – is that they will sit tight until the market improves a bit more and the current units are sold out, then they will build but they will offer them for sale in dribs and drabs. Remember, Hudson Tea was a non-eviction plan. Toll owns the renters’ units and every time a tenant vacates, they renovate and sell. I have heard they are offering some good deals on the lower floors of the Hudson Tea buildings. They also offer huge incentives to agents to sell their product.

  36. Andy

    I don’t have access to the equity research site anymore since I changed jobs. But they actually mentioned it specifically on their previous quarterly investor call. Sorry I don’t have any links to share.

  37. homeboken

    Andy – I am sure the shareholders were thrilled that executive management was/is mulling over negative returns and zero future value for those assets.

  38. Lori Turoff

    Toll Brothers’ Website to Broadcast Its August 27, 2009 Third Quarter 2009 Earnings Conference Call Live

    HORSHAM, Pa., Aug. 13, 2009 — Toll Brothers, Inc. (NYSE:TOL), the nation’s leading builder of luxury homes, will broadcast live on its website, http://www.tollbrothers.com, a conference call to discuss its third quarter 2009 earnings results. The event is scheduled for 2:00 P.M. (EDT) on Thursday, August 27, 2009. It will follow announcement of the Company’s third quarter 2009 results for earnings, revenues, contracts and backlog before the market opens on Thursday, August 27, 2009. The call will be hosted by Robert I. Toll, Chairman and Chief Executive Officer.

  39. Andy

    Lori, thanks for digging that up. The one where they specifically mentioned poorly performing assets in Hoboken was Q3 2008 I believe. And Homeboken, yes the investors punished Toll stock since they did not just invest millions in Hoboken. They have land all over the United States which sits undeveloped because of lack of funding and incredible amounts of debt service. Toll is a good company fundamentally but they got greedy at the height of the market and were castigated accordingly. Centex/Lennar/KBHomes/Hovnanian all were destroyed in the markets recently but are making a comeback. They will not abandon land but rather than leave eyesores they may decide to develop the Maxwell unused land into a park/parkinglot temporarily but I can assure you that they discussed no plans to move ahead with the 2 other buildings at least until they finish moving the existing units they built.

    I would like to think that if Toll is in trouble that most other developers who are moving ahead w/ groundbreaking must be in much better financial shape and can afford to build condos and have them sit on the market for a long stretch. I do agree with Lori that eventually when things recover they will re-develop that land into the remaining buildings but their plans are put on hold indefinately for Hoboken. I don’t work for Toll and can’t comment on their internal workings but as someone who follows them pretty closely it may make sense for people interested to listen to the recap of the call next Thurs.

  40. mike

    From NY Times Real estate last week-“In the Grip of Indecision”

    Ms. Gorman said she regretted not lowering the sale price in November as she watched similar apartments in the same building plummet to $400,000. She called her mother for comfort. “She told me not to do anything drastic,” Ms. Gorman said. She approached her co-op board about subletting; the answer was no.

    “Please tell me what to do,” she said she implored her fiancé one night over dinner. He declined, she said, telling her he did not want to influence her decision.

    “I thought, ‘Am I going to have this apartment in Manhattan the rest of my life?’ ” she said.

    Five months ago she decided to put it back on the market, for $625,000. In June, she lowered the price to $575,000, assuring a loss. This month, she lowered the price to $559,000. But her decision came down to this: she could either keep the apartment or use money from a sale to help buy something bigger for herself and her fiancé.

    maybe a reason inventory is not increasing

  41. homeboken

    Thanks Lori, I will be on the road that day, but I am sure I will be able to catch a taped web-cast that evening. Not sure if they will mention Hoboken specifically, I know they loved to in the boom times when they were “killing it in Hoboken”

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