2010 Apr 6th

A Longer View for More Clarity of Hoboken Condo Sales – The Hoboken Market by Quarter

Related to yesterday’s post, here is a look at the quarterly figures from 2000 to present.Β  If you want to see the underlying numbers, just fill out this form and they will be emailed to you:

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First, median sales price of Hoboken condos :

Next, average sales price of Hoboken condos:

Finally, average price per square foot for Hoboken condos:

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  1. shortsequalmarket

    Good to see the price per sq foot at 1Q05 prices. This is great news for Hoboken families who may have been forced to rent due to a speculative bubble. Hopefully the remainder of the bubble will deflate soon with buyers’ credits evaporating. Also the US benchmark treasury is above 4%, should push mortgage rates up and home prices down.

  2. carl

    3% annual appreciation gets you to 336$/sqft from 2000-2010 5% gets you to 407$/sqft. Can someone tell me why we don’t revert back to a normal trend which would at least be 400$/sqft? I do agree that if you are worried about interest rates skyrocketing now is as good a time as any to buy. But to think the bottom is in is a bit premature.

  3. whynot

    Gentleman – You can look at all of the numbers you want, but prices are purely based on supply and demand. For a desirable unit in Hoboken, there is a lot of demand. Trust me, we are out there looking. You are looking at a computer screen. For example, we just learned that all of the units in the new building on downtown Clinton went under contract in less than a few weeks for around $675,000 each. The demand for Hoboken as a place to live as increased over the years. Therefore, comparing 2002 to 2010 is not apples to apples as far as the demand side goes.

  4. whynot

    Gentleman – By the way, my comments above do not mean that some of the appreciation was not due to the bubble. It just means that the demand side also has a lot to do with the appreciation, so we are never going to meet or go down to the less demand side years. As a buyer, you have to understand that Hoboken is a different place than 8 years ago, and therefore, has different prices.

  5. Tiger

    whynot, just wanted to give you an e-shout out and say I agree. What’s good always sells, at surprisingly good prices compared to the masses. Also, as a guy who lived in 07030 for close to 12 years, Hoboken is **significantly** nicer than it used to. Back in Stevens days we wouldn’t even dare go beyond Clinton per school guidance for safety reasons, A&P was the only ‘real’ grocery option, as CVS and QuickCheck (remember that?) did not have fruits and veggies and frozen meals. A&P prices were brutal, thank God for ShopRite.

    Again, not statistics, just an observation.

  6. carl

    how big are the units for the downtown clinton property

  7. carl

    what is the address also if u have it

  8. whynot

    Thanks Tiger – Some people are obviously oblivious to the effect on prices that gentrification has on a community. My husband thinks that some posters on this site are just so upset about the prices or the fact they did not purchase eight years ago that they need to scream and kick like children with little support for anything they opine on. Unfortunately, this is not Las Vegas or Miami. We may or may not see great appreciation, but we are certainly near or at the bottom. We keep hearing about the second big crash. To us, it seems like prices are holding very nicely for over a year now. Also, the ecomony is improving.

  9. whynot

    Carl – I just googled it and found it:

    http://www.homefinder.com/NJ/Hoboken/60490925d_213_Clinton_St

  10. Lori

    Gentlemen? Really? How do you know, I ask again. Might that not be just a little insulting to the women on this site?

    A&P only opened about 7 or 8 years ago. When I moved here in ’99 there was NO grocery store besides the C-Town by the projects. Yes, Hoboken is a very different place now and I agree that the demand has changed in that the people who are moving here now are not the same demographic group as they were 10+ years ago. It will be very interesting to see the census results. Does anyone know how long that will take? I have the 2000 census figures for Hoboken. Can’t wait to compare them.

    Someone (on Wednesday’s post) asked why increased inventory is “bad”. Well, I suppose if you want prices to tank it’s not bad. It seems to be agreed upon by most economists, however, that a healthy housing market is a requirement to a healthy economy overall. If prices are in a downward spiral that does not bode well for many related industries and has a significant negative affect on the economy as a whole. So you may cheer for a price crash to make yourself feel better that you didn’t buy, or to make it more affordable to buy, and that may be in your own personal interest. On the macro level it is not a good thing. When the economy is growing, we all benefit.

  11. whynot

    Lori – I was responding to shortsequalmarket and carl, not to the group of posters as a whole, as both are gentleman. I think the posters understood that. If not, sorry. :(

  12. Lori Turoff

    OK – Understood. Apology accepted & appreciated : )

  13. carl

    According to the link the unit is offered at 649 k and is 1400 sqft thats 463$/sqft. So for a downtown 2 bed two bath which is completely renovated is offered below 500 $/sqft. Not sure if that provides comfort to either sellers or buyers.

  14. Lori Turoff

    With high-end finishes and outdoor space.

  15. John Day

    $500/sq ft will seem like a bad dream in a few years. Places should trend to something sustainable around $250/sq ft over the next couple of years. If you take sustainable rental rates, subtract taxes and maintenance fees, and allow a return of 6%, then that will get you to around the $250/sq ft number. And what I mean by “sustainable” rents is what one can be certain of collecting over a long period of time, which is not necessarily the same thing as the sky high, and in my view, unsustainable rental rates of many Hoboken apts today. And prices would have to drop around 45% from today’s levels to reach those prices.

    Long-term interest rates are most likely going higher. Anyone who thinks that they ought to buy before rates going up needs to rethink that notion. Higher long term interest rates make the value of all income producing assets go lower. Bill Gross, who co-runs a $1 trillion bond fund has recently said the glory days of bonds are over. I think it’s wise to heed his warning given his very long track record.

    I believe people have been buying in Hoboken recently because money has been very available. This has been the case for a long time, at least for people in this area. It’s dangerous to assume those conditions out to infinity. So when taking into account the high starting price levels, higher future interest rates, higher future taxes (who can doubt this?), and as a bonus higher crime rates (as is what is happening in Manhattan), then one can see all those forces acting together to deal a very hard blow to real estate. The glory days of real estate are over. We’re not in the ninth inning as some people believe (or want to believe). We’re still in the relative beginning, maybe the 2nd inning in terms of the tri-state NYC area real estate downturn.

  16. Tiger

    I can’t wait for the Census either! Should be interesting. Speaking of which I wonder how in 1910 or so there were like 70K people I think (?), how did they fit in? Or was it because part of Union City was called West hoboken? I am confused about that part.

    You are right Lori, back in 1998 I was a freshman on a meal plan living on campus, it was in 2002 (grad school) when I lived in a run-of-the-mill brownstone and started looking at groceries. Imagine living in Hoboken on a graduate assistant salary ($1725 per month, before taxes). Rough days, but they were fun! :-)

  17. Tiger

    John Day, show me the receipts! $250 per square foot? 45% drop? Why stop there? Why not say $100 per square foot? 80% drop? Obviously there’s a reason you picked those numbers and I really want to hear your insight, how did you calculate sustainable rent rate? Is it a percentage of the average income? Appreciation from a certain point in time? or what exactly?

  18. whynot

    Carl – On 213 Clinton, floors two through four went for around $675,000 and are likely around 1,200 sq. ft at most, so that is $560 a sq. ft.!

  19. Andy

    John,

    Unless there is a nuclear disaster prices for a property right near the hudson river will not drop 50%. There would need to be extreme high crime and no public services to see prices below units in Jersey City/West NY/Union city etc… Just simple supply and demand comes to mind though, Hoboken which is close to manhattan and has always been relatively cheaper to live than the city would be flooded with people from Manhattan wanting to live in Hoboken for $250/sq ft prices. This would automatically inflate prices due to endless bidding wars. The only way a $250/sqft scenario could occur is if nyc looses all of its top employers and incomes fall over 50%.

    Hoboken rents are high, but when i moved here 8 yrs ago I paid $1400/month for a 2bd railroad apt. if I wanted a renovated (not luxury) apt i would have paid almost $1800 and that was 8 yrs ago. If anything rents have stagnated and come down slightly but that does not dictate a 50% decline in property values.

    But if that reality ever comes true and i’m still making the income I am today I’ll buy a couple more units and retire a very rich man.

    This is not the 1970-1980’s in the NYC area. Salaries and bonuses are still rolling in for those employed and crime is at historic lows and for once schools are actually getting a little better in this area. I can’t find anything in your last paragraph that parallels the real world here.

  20. stan

    “We may or may not see great appreciation, but we are certainly near or at the bottom”

    Hot tub time machine? Did your husband invent Lougle? Will the Mets win the WS this year?

    I haven’t seen anything from Lori’s stats, which are by far the most comprehensive,that suggest a bottom has hit 07030.

  21. Craig

    The units at 213 Clinton have nice features and were staged well. I went to an open house there. Yes there are some nice fixtures and there is outdoor space. But I wouldn’t pay nearly $700k for them though. For that kind of money, there are certain features I expect that are lacking in that building. There’s little high-end about a four story walk-up building with no parking and no whirlpool tub in the master baths. For me, the lack of an elevator alone is a deal breaker for anything over $575k. But obviously if they sold out, not everyone shares my opinion. Different strokes for different folks.

  22. Tiger

    Stan, no need to quote medicore comedy movies, whynot is simply sharing her and husband’s take on the market, different folks have different opinions.

  23. Patk14

    Andy, I don’t think prices are going to fall 50% from here but I’m sure John Day’s point is that the whole area (not simply Hoboken) is overvalued. The government is doing everything in its power to keep interest rates low and to support mortgage lending to people who haven’t saved (FHA guaranteed loans). The taxpayers will have to eventually pay for the significant number of defaulted FHA loans and will push back. These actions simply extend the length of time before true market forces determine home values. I would also say that a strong housing market is the result of a strong economy and not vice versa. Historically there has been a very close correlation between salaries and home values. The bubble caused many people to leverage themselves to buy. Easy credit caused demand to exceed supply. Take that away and demand will drop quickly.

  24. stan

    I respect opinions.

    My opinion is that nothing has been presented to show a bottom is in. The above poster exclaimed with certainty that we are at the bottom.

  25. whynot

    stan – what about the fact that after the initial decline, prices have beem steady for almost a year? sorry, i forgot, they’re going to crash down in the magical future πŸ˜‰ stats are history. more, the market (jobs and stock) have been getting better. does that count?

  26. homeboken

    whynot – the counter point to your argument is that prices have held steady (not sure this is true) because the government has literally propped up the market with trillions of dollars.

    The FTHB credit, Fed CMBS purchase programs, FHA programs and zero-interest rate policy have all been in full effect for the last 12 months. I think everyone agrees that these programs will have to be pared back and shut down pretty soon. The question that is being asked is, will the real estate market (local and national) be able to stand on it’s own two feet when the government support is gone.

    Some folks here see a double dip, others don’t. My opinion is that all the govt stimulus did work, and there will likely be a correction to the downside when it is gone, how much is anyone’s guess.

  27. whynot

    homeboken – we understand, we’ve been reading the posts for a couple of weeks now. we beleive that some of the programs didn’t help Hoboken, some of the programs are not going away, and some of the programs will be offset by the stonger ecomony that is emgerging. is that fair? πŸ˜‰

  28. homeboken

    You are free to beleive whatever you like, it’s an opinion. Your’s is more bullish, but that doesn’t make it more correct.

    The economy may well be stronger, but with 9.7% unemployment and decreasing average national wages I am not bullish yet on housing. Obviously, individual cases vary, but I am talking about macro trends.

    I just do not see how the government can continue to subsidize the housing market, nor can I be bullish on housing if the subsidy is removed.

    Look at cash for clunkers, that was a mini-model for housing. The few months after the program were great, auto-sales zoomed. The subsidy went away and we are back to anemic auto sale numbers.

  29. whynot

    homeboken – we’re not bullish, we just don’t think the sky is falling anymore. there’s a big difference. no? :(

  30. Tiger

    homeboken, actaully USA today said most car manufacturers are reporting stronger numbers this year compared to last year.

    And I agree with whynot, the sky is not falling, and that’s good news for both sellers and buyers, and the market overall.

  31. stan

    whynot, Tiger-

    I havent seen evidence where prices have stayed level for a year. If i am missing it let me know, I am open to it.

    From Lori’s quarterly figures 2000-2010 document, it appears that prices have been headed pretty steadily in the same direction, down. I am basing this on $/sq ft.

    I do not predict prices falling off a cliff, but I haven’t seen anything to show prices are stabilizing either.

  32. whynot

    stan – i think you are missing it. i’m not sure what chart above you are looking at, but the last four quarters or one year of $/sq ft., which is after the initial decline, have been up/down or flat. no? :( please let us know, so i know that i am not missing something.

  33. Tiger

    Lori, saw your twitter, YAY for MOAZ!! Never tried it but heard raving reviews. We need a good middle eastern breakfast place in Hoboken (Ali baba does not count)

  34. Andy

    I’m definately not bullish on hoboken but i’m not looking for an annual decline in prices for the next 10 years either. I’d like to think that w/ layoffs slowing or stopping all together and many companies in the tri state area making $$ again I’d like to think that salaries and bonuses will make a strong comeback. What will end is people spending lavishly on luxury items and services. I can’t say whether it translates into a floor in housing prices but I’d like to think that over the long term we don’t see a major decline. The economics of our area don’t support that. Sure things were over valued for 4+ years but I’d argue that many people who couldn’t afford those places have already been taken out of the system in the past 2 years. Those of us who were responsible and can still pay our mortgage are staying put. So in short, my crystal ball is saying stagnant home prices for another year or two as demand picks back up but no further declines greater than 5% on a whole. Possible appreciations as bidding wars resume. (its already happening in Manhattan – NY Times real estate section a few weeks ago)

  35. Lori

    I have to agree with Andy – and that’s just my personal opinion.

    Tiger – Maoz is awesome. I’ve been to the one on 8th St. in the Village. It will make a killing here.

  36. stan

    whynot- I’m not referring to the graphs posted. Did you get the detailed figures emailed to you from Lori? its the googledocs 2000-2010

    looks to me like price/ sq foot is declining q over q and y over y. Its back at 4th q 2004, 1st quarter 2005. Square footage per sale increased implying to me that buyers were getting more bang for their buck.

  37. Tiger

    Real estate goes up or down, I’m just excited about the new falafel and hummus place!!! πŸ˜€

  38. whynot

    stan – you said “i havent seen evidence where prices have stayed level for a year”. i just think the chart above states otherwise.

  39. stan

    So you havent seen Lori’s data supporting the numbers, you should read it before you post again.

  40. whynot

    sorry stan – i just assumed that Lori’s data was used to make the chart above?!? no, why would it differ?!? again, the chart above and my experience of looking around indicate that the prices have held basically steady for a full one year period.

  41. stan

    I don’t know either, take a look at it if you get a chance.

    avg sq price/foot and median su/foot are lowest we have seen since 4q 04. Are people still spending 500k per place but getting a nicer/bigger place? so median stays the same but price/sq foot decreases.

  42. Confused

    I realize that I am very late with this comment, but I there was an A&P on 6th and Clinton when I moved to Hoboken in 1998. How anyone can say there was no supermarket except for the C-Town is beyond me.

    Tiger – some of my friends lived on 1st and Madison in 1999. I never had any issues, so to say going any further back than Clinton at that time is just wrong as well.

    I guess the truth has become nothing more than an inconvenience on this blog for those who own in Hoboken and worry about the value of their property.

  43. Tiger

    Confused, good for your friends. Back then I was a 17 year old Freshman, and yes, it was Stevens PD ‘safety tips’ that requested to stay around ‘well lit’ and ‘busy’ streets at night. As students, we also had nothing to do beyond Clinton, so you can see how our prespective would be that Hoboken ended there.

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