2010 Mar 2nd

The Weekly Wednesday Wrap Up – Hoboken Condo Sales & Activity for the Week of March 2nd.

Hoboken Condos Sales & Activity – Week of March 2nd.large_balc

The story this week is twofold. First, a few questions to ponder about this Saturday. If you own property, or if you are thinking about buying property, consider the affect the upcoming St. Patty’s Day parade may have on you. For example, if there are house parties in your condo and someone gets hurt, could the condo association be held liable? If the condo association insurance covers the claim will the rates be increased? If damage is done to the common areas, who is responsible for paying for the repairs? If your tenants have a party, can you be summoned for allowing disorderly conduct? If you host a party and serve alcohol to a guest who later goes out and causes injury can you be held liable under host liability laws? If the fire escape or deck on your building collapses due to overcrowding, what might the consequences be? Many condos are now amending their rules to prohibit house parties on this day. Similarly, many landlords are including a clause in their leases that prohibits house parties. Just food for thought.

The other story is yours. Over a hundred comments on last Wednesdays post and a really interesting discussion about several topics. Is getting an FHA loan a subsidy? The consensus is yes. Will the Fed continue to buy mortgages? On this one, the consensus is no. Does the first time home buyer credit matter in Hoboken? Not much. Are prices headed up, down or flat? Debatable. Sincere thanks for all of your contributions and the respect shown even when you disagreed. Let’s keep the discourse going! I’m going to ask my techies to make pages for the comments so you won’t have to scroll.

Finally, I’m happy to say inventory moved down this week. Here are this weeks numbers vs. a week’s ago numbers:

Studio & 1 Bedroom Hoboken Condos:

7 new listings.

220 total active – $380,370 average asking price. Average 75 DOM.

1 dabo. Average 60 DOM

None sold.

16 price reductions.

Two Bedroom Hoboken Condos:

15 new listings

249 total listings. Average list price $577,443. Average 98 DOM.

6 dabo’d. Average 54 DOM.

8 sold. Average price $626,362. Average 76 DOM.

18 price reductions.

Three Bedroom and Larger Hoboken Condos:

4 new listings

49 active listings. Average price $975,504. Average 121 DOM.

2 dabo’d. Average 105 DOM.

2 sold. Average price $667,500. Average 50 DOM.

4 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, due to MLS regulations, to receive the map with the actual links, you will have to request it using the request form on the post. It only takes a second.

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.

A word about that – if you have an ongoing relationship with another agent we are not going to email you listings. You can ask your own agent to do that. So what is an ongoing relationship? Is that not up to you? Have you been working with another agent on a regular basis? More importantly, are you happy with that agent’s service? If so,we respect that relationship. If not, find an agent you like!

If youattend an open house or see several properties with several different agents, that’s not an ongoing relationship. That’s the nature of our job. Despite what some agents in town would like to have you believe, simply showing a buyer a single property, or even a few, does not a relationship make. You are the consumer – you get to decide with whom you wish to work. Unless you’ve signed a “buyers agency agreement”, which is highly unusual in Hoboken, an agent doesn’t have any “hold” over you. So find an agent you like, trust and whose advice you respect. It’s your money, no?

For more information you can always contact us at 201 993 9500.

Thanks for reading and, as always, we welcome your comments!

  1. whynot

    Thanks Tania – Your insight is very helpful to me. I am not a number crunching person like a lot of people that post on this site. I try to look at the nuts and bolts of things. We are going to stay in Hoboken for a while, so things may look very different if we ever sell in the future. I think that is maybe where my analysis differs than some.

    On a different subject, I was reading about inflation. It was a little confusing. I am not a financial person. Does anybody know, in laymen’s terms, how inflation will affect prices and holding a mortgage? Lori, it seems like a very interesting topic for a blog in these times.

  2. Lori

    Thanks again Tania – RE: Broker-Associate, my sincere apologies. I looked at your website to check and it just says realtor associate under your name. My bad. You and any other agent in town are always welcome to comment and contribute. I’ve said all along – more transparency and information can only help both the market and the consumer. That is what it’s all about.

  3. whynot

    Here is a decent article on inflation and real estate:

    http://www.ehow.com/how-does_4564234_inflation-affect-house-prices.html

    Can someone interpret? I assume that inflation is coming, but it is not here yet?

    I am now obsessed with the issue. We are likely looking to buy anyway, but we still want to be smart.

  4. homeboken

    whynot – In basic terms, if you are entering an environment of increasing inflation you want to be a net borrower. Inflation will benefit a borrower and equally negatively impact a lender.

    That is why people will say that having a mortgage is a good hedge against inflation.

    I would discourage someone from buying only due to inflation fears, but if you are going to buy anyway, inflation will be a benefit to you, with respect to your debt.

    Now there are dozens of other ways that inflation will impact you (wages, prices, etc) but you only asked about how it relates to a mortgage.

  5. Lori

    It’s not that complicated. Inflation causes the price of assets to rise. Property is an asset. If you buy when there is very low or no inflation (now) and we get hit with inflation, the price of your property will rise. So if you sell, say after a few years of inflated prices, you’ll get a higher dollar amount for the sale. BUT those dollars won’t have the same purchasing power since in an inflationary economy all prices typically rise – so you’re not really gaining anything.

  6. whynot

    Homeboken – If you have free time, please elaborate. Don’t limit your discussion to mortgages. It’s interesting to know, especially if it happens. Thanks!

    Lori, so inflation had nothing to do with the recent bubble. Also, if prices rise because of inflation in the future, they will rise evrywhere, so it does not matter not much.

  7. shortsequalmarket

    For the record if I bought, unlike some who posted on this board, I would put 20% down. In fact I have agents aking me to buy. Why would I. Thoughts says prices are likely to remain flat for a while. What is the benefit of using up my liquidity to buy a non-appreciating asset?

    To sum up the comments. The high end is suffering, the low end is suffering, but the mid priced near the PATH is clearly at the bottom and will be safe for a long time. What happens if the “high end” prices move close to mid end prices? any chance people might want to pay less for those units?

  8. homeboken

    A simple exercise (though nearly implausible) is what they teach in Econ 101, called the Pink Dollar scenario.

    Imagine that the President goes on TV and says that starting March 6 at 9:00 am the current USD (green dollars) all must be traded in for new pink dollars. Every greenback you turn in will get you 2 pink dollars. Greenbacks can no longer be used for any trade.

    What has just happened is that the price of everything just instantly doubled. A cup of coffee that used to cost 1 greenback, now costs 2 pink dollars. Your wages would double as well, if you used to make 1,000 greenbacks a week, now you make 2,000 pink dollars. So it would seem that you are no better or worse off, since effectively everything just doubled in cost.

    But your debts did not. Your debts represent greenbacks already spent. If you owe 5,000 greenbacks on your credit card, you now owe $5,000 pink dollars, but you have twice as many pink dollars as you used to have in green. That debt can’t increase because of inflation though, since it is an agreement to repay green dollars that were spent already.

    So in this case, all of your debts just got cut in half. This sounds like a great deal right, but everything comes with an impact. The banks (and any net lender ie owners of UST hint: China) would be decimated and I think we all know to well what happens when banks start to have financial troubles. Moreover, how would we expect other nations to react when we cut the value of the US Treasury holdings in half (WW III anyone?).

    The long answer is out there, but inflation is a very complex issue, to complex to write up in a comment.

  9. whynot

    Thanks homeboken, but what really scares me is what would happen if wages DON’T double as well.

    Do you think inflation is coming?

  10. whynot

    shortsequalmarket – i think you may have hit the nail on the head when you say “using up my liquidity to buy a non-appreciating asset”. this issue has a lot of different answers for a lot of different people. whatever works for you, may not work for someone else. it also assumes there is no appreciation during someone’s holding period and that purchasing a home is only for investment.

  11. Craig

    Thanks Tania, that does give a little insight and makes perfect sense. Another contributing factor to the huge loss on unit 206 was that the buyer overpaid in 2007 when he swooped in to snatch it from those people who were in attorney review for it. As you put it, he had to come in aggressively. In my view, that’s usually a nice way of saying someone overpaid to outbid someone. Nearly $1.5 million for a 2 bedroom that’s not on the water was a recipie for disaster.

    I’ve been in 109 Grand to see 2 different units. The layouts are nice, as are the finishes. But this is not Maxwell Place. The units I saw are the 1360 sq. ft. 02 units on 2 different floors. The owners of these paid in the 700s, but I think the magic number for those units now starts with a 6 in that building. I’m guessing the one with a den that just went on sale is an 01 unit – haven’t seen those. We’ll see how it does.

  12. shortsequalmarket

    Whynot

    You are correct within Hoboken that is my primary disagreement with Thoughts. While some might be prepared to live in Hoboken and send their kids to private school that is not my goal of licing in Hoboken.

    Based on the number of listings I see where the picture of the 2nd bedroom is a nursery it appears to me many people consider Hoboken a stop in life. Since I cannot say with assurance Hoboken will be my home 5, 10, 20, etc years in the future it is not the right time to buy a non-appreciating asset. Even worse an equal chance it might depreciate.

    What will happen to prices in Hoboken when the variety of items I listed occur. It is likely to really hurt and create a new group of indentured servants. They will be indentured to their house. I do not want this.

    I post bacause most of the media speak that the simple act of home buying is a mythical power to super wealth and stability. Currently, to me it appears it is anything but.

  13. whynot

    shortsequalmarket – i totally understand your position. if you’re not staying for at least 5 years or so, then do not buy. that said, you cannot say simply that hoboken is not changing. you also cannot talk like certain things are fact when they are just your opinion – the future is simply unwriten history. re-read your post. that is what i take issue with.

    “What will happen to prices in Hoboken when the variety of items I listed occur.”

    should be changed to:

    “What will happen to prices in Hoboken IF the variety of items I listed DID occur?”

    Hopefully, we can agree to disagree and have a good weekend.

  14. EmmaC

    Hi, This has been mentioned a few times so as someone who has listed a unit that has a nursery I wanted to say that we’ll be staying in hoboken, we’re just trying to get some more space. I think Hoboken is great for little kids and families and it does seem to get better each year (hoping the trend continues!). I know of at least 5 others w/babies who have sold/listed their places in the past 6 mos to buy places w/ more space in town.

  15. JC

    Off Topic…but its Friday. This NYC broker babble is too funny to pass up. “ballroom sized living space! Its 20 x 20! 6 star condo! Is that like 6 star pizza on 4th/garden?!:

    This is the most gracious, generous and glamorous full floor doorman 2BR/2.5 condo loft in the West Village. Showcasing the most grand and fluid floorplan at Morton Square, this sprawling space is sunblasted by floor to ceiling windows and hosts 2 exposures! 10 foot ceilings add a sense of drama, depth and volume. This is the ONLY line at Morton Square that has a Ballroom sized entertaining space. Morton Square is the West Village’s ONLY 6 star full service condo with an unrivaled host of amenities including 24 doorman and concierge….

    http://www.prudentialelliman.com/listings.ASpx?listingid=1000153&utm_source=Streeteasy&utm_campaign=corporate&utm_medium=listings

  16. homeboken

    HA – That broker must have been a creative writing major.

    The sail fish adds a sense of ocean tranquility to the second bedroom…

  17. patk14

    Liquidity means different things to different people. If your parents will step in if you have liquidity problems, then you can utilize every dollar that you have available. If your parents cannot afford to do that and you work in a volatile industry (can we all spell finance), having liquidity means much more and you are less likely to risk it in today’s real estate market. I really feel for that guy who took a 35% hit on an expensive condo. How many of us could afford to take such a hit?

  18. shortsequalmarket

    The items I listed in a previous thread will occur or at least the government has said they will occur. These items include:

    *The Fed will stop buying MBS
    *The first time home buyers credit will expire
    *FHA criteria will become more strict

    These items will occur and it is hard to see them having anything other than a negative impact on home prices.

    The units with the nurseries I have seen have been the fairly standard 2/2 1,200 sq ft with parking. I am not saying there are not larger units in Hoboken. However they are few and far between. Which means many people with kids are trying to leave Hoboken (or they are going to be out of luck when it comes to finding a larger place). Will the next set of young families be willing to risk being indentured to their house to paint a room pink?

  19. shortsequalmarket

    Inflation typically favors debtors but we should note that inflation does not occur evenly across all products assets. With the exception being a true hyperinflation.

    During the ’90s and 00’s many products declined in price as their production was outsourced. Think consumer goods at Target and Wal-Mart. When was the last time you went to an actual butcher, etc? Based on these savings there were more dollars chasing all the other goods, housing being one of them.

    Now that so much production has been outsourced as a nation we are at the whim of our foreign suppliers. If China says we are increasing wages then get prepared to pay more for an iPad ;). This means there will be less dollars for chasing other goods, particularly domestic produced goods like housing.

    This is actually occurring. The CPI is negative or near zero because owners equivalent rent (housing cost) but the prices of many other goods have been increasing.

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