2010 Feb 8th

Hoboken Condo Sales Results – The January Numbers

If the Saints can Win the Superbowl Anything is Possible

Call me an optimist, although that is not at all my nature, but today I received an email from a mortgage company with some fairly good news.  I’ve reposted it below.  Granted, one can find statistics to prove anything.  Nonetheless, it seems a little encouraging.  Closer to home, our Hoboken real estate market numbers are not too terrible either. Now, I’m not making any predictions – just stating what I see.  From my day-to-day experience in the market I can absolutely say it’s pretty busy out there. My buyers even lost out in a bidding war (unfortunately).  Sure, there are properties selling for low prices but not all of them.

Here are the results.  Judge for yourselves.

Here are the comparisons to past year’s condo sales results:

Here is the economic report I received:

The Institute for Supply Management reported that the monthly index of manufacturing activity rose to 58.4 in January after reaching 54.9 in December. It was the sixth straight month of expansion and the fastest pace of growth since August 2004. A reading above 50 signals expansion.

The Commerce Department reported that total construction spending fell 1.2% in December after a downwardly revised 1.2% decline in November. Economists had expected a decrease of 0.5%.

The U.S. non-manufacturing sector rose to 50.5 in January from a downwardly revised 49.8 in December. A reading above 50 signals expansion. Economists had anticipated a reading of 51.

The National Association of Realtors reported that its pending home sales index, a forward-looking indicator based on signed contracts, rose 1% in December. Compared to a year ago, pending home sales are up 11%.

The U.S. non-manufacturing sector rose to 50.5 in January from a downwardly revised 49.8 in December. A reading above 50 signals expansion. Economists had anticipated a reading of 51.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications for the week ending January 29 rose 21% to 620.7. Purchase volume increased 10.3% to 237.8. Refinancing applications jumped 26.3% to 2,854.8.

The Commerce Department reported that factory orders rose 1% in December. That was double the 0.5% increase economists had anticipated. It was the fourth straight gain and follows a revised 1% increase in November.

The Labor Department reported that productivity rose at an annual rate of 6.2% in the fourth quarter, following a revised third-quarter gain of 7.2%. Labor costs fell at an annual rate of 4.4%. The unemployment rate fell to 9.7% in January from 10% in December. Employers cut 20,000 jobs in January, far fewer than the 150,000 jobs lost in December. The four-week average for continuing jobless claims fell 51,250 to 4.618 million.

Upcoming on the economic calendar are reports on wholesale trade on February 9, retail sales on February 11 and consumer sentiment on February 12.

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  1. Tiger

    Thank you Lori!

    Yesterday on CNBC they were talking about the job report and the real estate market as well. Small positive steps, we still have a lot of recovery ahead of us, but at least we see some positive signs, for the first time in almost a year now.

  2. lori

    You are very welcome.

  3. Lisa

    Thanks Lori!! I’m going to put my place back on the market if the data keep coming out strong like this…just the news I needed!!

  4. onbloom

    Yeah, “one can find statistics to prove anything” and wouldn’t it be at least, maybe, a tiny bit possible a mortgage company would cherry pick trends so they could sell more property? Not every one is buying it:
    http://www.nytimes.com/2010/02/07/business/economy/07gret.html

  5. Tiger

    onbloom, one can argue the other way as well. It is not like the editorial you posted is the gospel. I have read opinions which range from overly optimistic to pure tragic ‘the sky is falling’ range.

    ALL I KNOW, and based on MY OWN experience, the last year and a half have not been the best, but God knows they were not nearly as bad as you or me or anyone expected. We can at least admit that it hasn’t been that bad. We are in 2010 and the crisis started in 2006 only to hit us in 2008. We had our own tax crisis as well, which again didn’t hit as hard. It is good to take a moment every now and then and just think of how blessed we all are.

  6. lori

    If you read me regularly you know I’m always posting and tweeting NYTimes articles and I’m not a cheerleader for my industry – far from it. It’s just one article that struck me. Take it for what it’s worth. By the way, mortgage companies don’t sell properties.

  7. thoughts

    tiger –

    i totally agree with your statement. maybe i didn’t communicate that as well as i could have in the past. people that simply say things are terrible don’t know what they’re taking about.

    people say that i post here to make myself feel better – that’s just plain wrong – nobody knows my facts and circumstances. i had a bunch of friends purchase over the past year plus a bunch still looking – there are very VERY few deals out there. yes, prices went down – but Hoboken and North Jersey certainly wasn’t vegas or miami….

    for example – (i) i just had a friend pay @80K over list for a small house in westfield and (ii) i have two sets of friends that cannot find any deals in Hoboken in their location of choice…

    therefore – yes, prices went down, but not to the point where you would say Buyers are winning – so, lets call it a “standoff”, which I think benefits sellers.

    thoughts

  8. onbloom

    Didn’t intend to impugn your integrity Lori, it’s just that I had just read Morgenson’s column shortly before your posting. The difference in outlook is extreme. The columnist has been consistently on the mark in exposing financial shenanigans and hype driving the bubble economy. She’s not some flakey blogger. We need to have our eyes wide open — we’re still in the midst of sinking economy with many dangerous pitfalls ahead. The mortgage company clearly is selling a bill of goods with its reports.

  9. Lori

    No offense taken, onbloom. I think highly of Morgenson and Krugman, Freidman & Collins are right up there too. I just finished Andrew Ross Sorkin’s “Too Big To Fail”. My eyes are so wide open it’s depressing. Mortgage brokers are not my typical source for info. I thought it was a factual report and concisely made a point. That’s all. There are two sides to every story, yes, and that was a happy story. Nonetheless, things seldom seem to turn out as bad as people often predict. Thanks for your contribution.

  10. teaorcoffee

    In an earlier post Tiger said that things weren’t that bad. I guess it depends on who you are talking to. Things have been horrific for a lot of people. I know a few who will outright lose their homes (not in the Northeast) because they lost their jobs. I know people in my building who have had to sell at a loss because they can’t afford their apartments anymore (not because they overbought, but because they lost their jobs). I know of a couple of folks that upon losing their jobs, had to leave the country.

    I also know of several families who are “stuck” in their apartments because they are underwater. While from my perspective it’s not too bad to be stuck in a nice apartment and to have to delay a move to the burbs for a few years, if that wasn’t in your grand plan, then you aren’t too happy about it.

  11. Tiger

    teaorcoffe, a very close friend of mine moved back home to Illinois (for the first time since she was 18, now she’s 32), after loosing her job in April 2008. A couple of friends of mine also lost their jobs, only to be stuck in worse jobs in which they work twice as hard, get paid half as much.

    Why stop at the US borders? Take a look at other nations; I went to the Middle East last fall; in areas suffering from (40%)! unemployment rate. College graduates just sitting home, and yea no unemployment as well. You know what amazed me? They seemed to be genuinely happier than a lot of people I see in Hoboken, including myself. I keep asking myself, is 5% or 10% or even 20% of your net worth what defines happines?

    I still think in the overall scheme of things it is not that bad….

  12. SallyD

    Wall St guys are saying their bonuses are awful. Not sure what that means but will a market that was pumped up by bonus steroids do now? And Hoboken is a peripheral mkt which we know gets hurt worse than the epicenter (Manhattan).

    Thoughts?

  13. TS

    SallyD,

    Source?

  14. Confused

    thoughts, did you change your handle to SallyD?

  15. thoughts

    yes – call me S-a-l-l-y for now on – that’s funny.

  16. thoughts

    in furtherance of my prior posts – see:

    Sale – 328 Garden (no parking) and 3rd floor walk up – 587K

    Sale – 600 Hudson (with parking) – 675K

    2 bed, good location and a decent looking place gets big $$$ in this market!

  17. Lori

    If you comment from the same IP address does that mean you are the same person using different names and emails? I have all that info, you know. Shall I out you? Do I need to start having people ‘register’ like they do on 411? To the person who called me an ‘idiot’ this morning – don’t you realize I can delete your comments and block you from the site? Get a life. And a job.

  18. thoughts

    this is “Thoughts” – i am NOT Sally D – check the IP addresses – you will see that her post and my post are from two distinct IP addresses.

    i was kidding and SO was Confused b/s Sally D ended her post with “thoughts”….get it?

    i guess you lost your sense of humor for the day b/c some idiot called you an idiot – sorry for the confusion….

    thoughts

  19. Lori Turoff

    Thoughts – that wasn’t directed at you. It is directed at 67.247.9.128 who I suspect is one person that has been posting under many different names, including Sally D, Lisa, Bill, Yo, Boneman, Tom, Jamie, Leslie, Steve, etc., etc., as well as this morning’s deleted post under the handle “G” when a person from 67.247.9.128 called me an idiot. That was it – the entire comment – “you are an idiot”. So 67.247.9.128 is no longer going to be able to post to this blog. I know, an IP address is just the computer connection. Maybe all the people using a free terminal in some coffee shop just happen to have a bug up their butt about me and find it fun to make derogatory remarks and useless, nasty comments here on a regular basis but I doubt it. So my apologies, thoughts, as constructive comments are always welcome. I got the joke. I was speaking to the loser who needs to get a life. Maybe real estate isn’t the right field for you, 67.247.9.128?

  20. thoughts

    okay, anyway…..

    i know the economy looks bad – but i am totally impressed with how Hoboken and parts of NJ on the train line have held up….

    Lori – what are your personal thoughts? i couldn’t beleive you saw a bidding war until a friend of mine just went through it in westfield…. by the way, they moved from west NJ to westfield to be more urban….

  21. vreporter

    Price your property below “horrible” because you are motivated and you too can have a biding war. There is no correlation to price trends. It’s the end price in relation to past price that we are debating. Motivated sellers are learning to get in FRONT OF the downtrend in prices. That’s all that’s happening in these situations now.

  22. thoughts

    vreporter –

    you’re like a two year old with your comments (do you ever get….) – anyway, you don’t even know the facts – i’m convinced that you’re a buyer that can’t get a steal in this market, so you’re upset.

    anyway, the westfield property was listed in the 700’s for around 2000 sq. ft., one car garage, small lot, built in the 70’s – go look at westfield listings for the past year – getting anywhere in the 700’s for a property like that would be great for a seller. most went for somewhere in the 600’s. well – this bidding war caused the property to go in to 800’s…..

    there was no “price your property below ‘horrible'” or a motivated seller….doesn’t seem like a downward trend to me??!!??!!!???

    i don’t know why i even respond to you.

  23. FAP

    I’m expecting to see the real estate market stagnate or drop starting in April.

    I say April because that’s when many expect the Fed Reserve’s MBS purchase program to end, it’s currently 95% complete. This will instigate a rise in mortgage rates, losing the fed as a buyer of mortgage bonds will necessitate increased bond yields to encourage other buyers, which means higher mortgage rates.

    Until prices equalize to the higher rates I’m expecting a lull in sales.

    But this is just my opinion.

  24. Tiger

    FAP, earlier this week they had an editorial in USA Today saying that fear of another RE collapse -nationwide- is what would probably extend the program beyond April, or make it at least a **gradual** increase vs an overnight 2 or 3 point increase

  25. JC

    Tiger..I know you know this already, but an overnight 2 or 3 point increase would be devestating on many different levels.

    I think its common knowledge there will be a gradual increase but its just a matter of how far and for how long.

  26. homeboken

    All government programs will be extended to support housing, does anyone really beleive that the housing market is ready to stand on its own, without government subsidy? (Im talking nationally, I know it’s different here)

    As I predicted back in October, I will restate again.

    I predict, the FTHB tax credit will be extended again in April. It will eventually become permanent. Just like the mortgage interest deduction.
    Once you give the market a subsidy, it is easier to make it permanent than take it away.

  27. homeboken

    To put some numbers on the FTHB credit:
    There are 500 homes for sale (per the MLS) in Hoboken.
    Assume 50,000 residents (high but close enough)

    That means there is 1 home for sale for every man, woman and child in our fair city.

    Apply this trend to the total US population and you get approximatly 3,000,000 homes for sale nationwide. (I think this is a conservative estimate).
    At 8,000 per, removing the FTHB tax credit would erase $24Billion in home value over-night. You don’t need a political science degree to figure out that any Senator/Rep that is up for re-election will be lobbying hard to continue to prop up the real estate market.

  28. Tiger

    Exactly JC, the article was pretty much saying that it will be a long(er) gradual process.

    And I agree with you homeboken, I don’t see the FTHB credit going away anytime soon.

    To be honest I am a homeowner myself and I know both the insanely low interest and FTHB are good for me **NOW**, but I have a feeling that in the longer run it will come back to hunt us. I was, and will always be, a taxpayer before I was a homeowner.

  29. bz

    I think the possibility of homebuyer credit get extended in April largely depends on if the economy will be on a stable footing by late spring. You know…that includes the real estate sales and price numbers, job market, wage changes, consumer spending, inventory, CPI, GDP…If most of these indicators show a promising and strong sign of economy recovery (which I doubt), then gradually taking away the credit is very possible. If the recovery road is obviously painful and long, the credit might stay for years. So I think the Q1 numbers are very important in order for congress to make a decision on the extension. So far, a half of Q1 has already gone and things aren’t picking up. In stead, some unexpected bad new came along such as stock market, up and down on unemployment; even the real estate numbers weren’t consistent. My guess is that the possibility of extension is getting higher and higher as we are approaching to March and April.

    I also think this time the extension (if there is) will be announced earlier than last time, so the transition will be smoother than last Nov.

    As for the interest rate, again it depends on the economic data for Q1. Most likely, we won’t see an immediate increase; and even if there will be an increase due to the bond yield changes, Feb will do something to make the hike as gradual as possible. Remember the housing (or real estate in general, of cause commercial real estate has its own set of problem) is the epicenter of the whole mess and the most important key element for the recovery. I don’t’ think Fed will risk it.

    In addition, I don’t think both low interest rate and the homebuyer credit will be taken away together at the same time. It will be one thing at a time. Let’s see if my guesses are right.

  30. shortsequalmarket

    Please help me with the good news in the unemployment reports. I do not consider an all time record of 10 million people collecting benefits good news. I also do not consider it good news that more people are choosing not to even look for a job, therefore no longer being considered unemployed.

    Looks like the sellers of 501 9th hoodwinked someone. A larger unit in Columbus went for $475 only a month or two before. In other words $615 to $480 or an over 20% decline in a year and a half sounds right for Hoboken.

    How can a seller win if he does not sell. Standing off is losing for a seller. Especially in a market like Hoboken where if you give renter a couple more years they will choose to move to the ‘burbs anyway.

  31. thoughts

    shortsequalmarket –

    the trend is not to move to the burbs. take a look at the yuppies running the government and school board now. the world is changing. it’s estimated that over 50% of the generation after the current 35 year olds will never own a house in the burbs.

    i know many many many more 35 year olds looking to buy in hoboken than sell. yes, i know a lot of people.

    in regard to 20% off of the high, i agree (as you know) depending on location. places around 2nd and garden are not 20% off of the high, but a place around monroe and 4th is. just my observation.

    thoughts

  32. Lori

    Why was there a bidding war (we don’t call it that, by the way – we call if multiple offers). Well, many young families with several children are choosing to remain in Hoboken. They want 3 bedroom apartments (and not 900 square foot ones). This was a particularly nice unit, over 1700 sq ft., in a decent location, elevator building with deeded parking. The renovations were a bit personal but nicely done. It also had outdoor space. It was priced at about $445 a square foot. That is few and far between, or let’s say limited supply. There is a lot of demand for big, decent units. So you get multiple bids.

  33. shortsequalmarket

    Maybe some are staying away from the ‘burbs but that study sounds cherry picked. If you look at the 2/2 units with parking in Hoboken you will find many of them have a nursery. That’s right they are looking to leave before the kid goes to school. There are a lot of places like this in Hoboken.

    There is still people lining up to get into Milburn High, not so much Hoboken.

  34. Tiger

    I can’t believe I am saying this :-), but I actually agree with thoughts on the metro area vs burbs theory. Yes, we are saying slow but certain changes in governing body in Hoboken.

    If I ever have kids, I would seriously consider moving down to Houston (the inner city, not the burbs); would be great to live within a commutable distance from my brother. In fact, he lived in the burbs when he was a resident, sold that home and moved right into the inner loop when they had their second child. For them, having a 10 minute commute vs a one hour commute made it all worth it, it meant that both of them get to spend more time with their kids and actually raise them vs delegating that job entirely to the nanny.

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