2010 Jun 2nd

The Weekly Wednesday Wrap Up – Hoboken Condo Sales & Inventory for the Week of June 1st

Hoboken Condos Sales & Activity – Week of June 1st

The New Jersey Assembly approves Tax Credit to Home Buyersmoney

The state Assembly approved Bill A-1678 that seeks to rejuvenate the state’s housing market by giving out $100 million in tax credits to homebuyers.

The bill establishes the New Jersey Homebuyer Tax Credit Program. It will give new homeowners credits worth up to $15,000 or five percent of the home purchase price, whichever is less. The credits will be distributed over a three year period on a first-come, first-serve basis for home purchases during 2010. There is NO income limit for eligibility.


Here are this week’s numbers vs. last week:

Studio & 1 Bedroom Hoboken Condos:

6 new listings

208 total active

4 Dabos

6 Sold

11 price reductions

Two Bedroom Hoboken Condos:

25 new listings

276 total listings.

2 Dabos

8 sold

12 price reductions

Three Bedroom and Larger Hoboken Condos:

1 new listing

60 active listings.

no Dabos

1 sold

6 price reductions

Hoboken Condo Open Houses

If you are in the market for a Hoboken condo, our Hoboken Open House Google Map is your best source for locating every open house in Hoboken. It is the single, most complete listing available and we were the first ones to do it. We compile the information by hand from all possible sources to provide you with all the information you need in one spot. It’s posted on Friday every week.

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.

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

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

  1. whynot

    shortsequalmarket – get out of your text book and computer and into real life.

    ask the brokers/sales people on this blog:

    how many people purchasing a 2/2 over 500K in hoboken in 2009 received the 8K tax credit????

    hopefully, this (i.e. real life answers) will end the debate. give me a break. this has been discussed at length over the past 3 months. it’s been asked and answer by the people actually in the field doing the deals! πŸ˜‰ your wrong – so just admit it!

    Now, is there any response to:

    so, the Hoboken’s price-to-rent ratio is about 15!

  2. Craig

    “how many people purchasing a 2/2 over 500K in hoboken in 2009 received the 8K tax credit????”

    I know of at least two: myself and my girlfriend. We went to contract in 2009 and closed in January 2010. The money wasn’t used towards closing costs or the downpayment, both of which came from our savings. It was used to replenish savings and buy a new washer and dryer for the condo.

  3. whynot

    Craig – just for the record, you and your girl friend really count as one purchase. beware, when you guys break up, owning real estate together will make things a little sticky πŸ˜‰

    The real question is – did you know when you went under contact in 2009 that:

    the limits were being increased?
    the credit was being extended?

    in other words, did you just get lucky?

  4. shortsequalmarket

    I am absolutely not wrong. The one recent buyer who posted on this blog used it. I also think there was another buyer who used to post and told us how he used it and borrowed FHA on top of it. (He believed FHA was not a subsidy if you recall).

    So there you have it the two recent buyers on this blog both used it. You said none.

    Will you admit you were wrong now?

  5. shortsequalmarket

    Also you do not need to tell your realtor you are using it so unless the realtor filed there taxes they would not know.

  6. whynot

    I said “okay, okay, maybe one. so it had no or little effect on the numbers.” – come on! πŸ˜‰

    Little or no affect!!! And, the realtors would know!

  7. Lori

    Wasn’t Craig the same buyer who used FHA and posted that it is not a subsidy?

  8. homeboken

    The “orginal” income cap before phase out was 150,000 for a couple. If we assume that people purchased using traditional 3.5x income multiple (when we all know many were paying more than that) then we get $525,000 purchase price.

    How many condo’s closed for %525,000 or less since February 2009? That is your universe of buyers that would likely have been eligible for a tax credit. Sorry whynot, but that pool of buyers is going to be much higher than 1 or 2, regardless of how hard you try to argue to the contrary.

  9. whynot

    homeboken – “If we assume that people purchased using traditional 3.5x income multiple” what?!? What!?! WHAT!?!

    stop assuming and staring at a computer screen and ask what really happened!! why does that scare you guys or girls so much? every broker/sales person has stated for months that the tax credit in 209 did not help many people purchase 2/2 over 500K – that’s just reality. r-e-a-l-i-t-y! have you ever heard of it? seems like “no”!

    do the new limits help in 2010 enough to affect the numbers? maybe? but i’ll need the people in the field to tell me, not hoboken making up formulas and ratios!

  10. whynot

    “If we assume that people purchased using traditional 3.5x income multiple”

    i’m going to barf – watch out!! πŸ˜‰

  11. shortsequalmarket

    Very rough numbers

    Hoboken Median Income = $100,000
    Without Public Housing = $150,000
    Median Home Price = $500,000

    It defies common sense not to believe many people were taking advantage of the tax credit. Not only that, in our small sample of 1 it has 100% participation.

  12. shortsequalmarket

    what income multiplier do you think they use. Were they all using 2 or lower in order to not qualify? Were they using 25 like the real housewife of NJ?

    So the only information you are willing to go buy is a realtor who may or may not have been told that they were going to get the tax credit?

  13. whynot

    you love straws!

    you just said it – a single person making 100K (Hoboken Median Income) did not qulify in 2009! the limit was 75K with a very quick phase out! therefore, little of no affect on any 2009 numbers!

    agree???????

  14. shortsequalmarket

    About 1.4 million tax returns have been filed to take advantage of the credit at a cost to the government of about $10 billion. Many powerful lawmakers want to extend it, including some that back broadening it to all home buyers and doubling its benefit.

    An IRS spokesman also said potential for fraud exists whenever a refundable credit is put in place. The agency has opened 107,000 civil cases related to the credit and identified 167 criminal schemes. Also, they have selected thousands of returns for those claiming the credit for deeper audits.

    The report finds that 582 taxpayers under the age of 18 claimed about $4 million using the credit, with the youngest being 4.
    ______________________________
    Through last October 1.4million people took advantage including 582 children. However there was only one in Hoboken.

    I guess it is because Hoboken families did not qualify. After all their median income of $150K in conjunction with a $500K purchase clearly would either exclude them or they felt the need not to receive the benefit from the government.

  15. shortsequalmarket

    so only singles buy in Hoboken? What about all the families with kids you tell me are moving closer to their offices. You cannot have it both ways. Make up your mind.

  16. whynot

    double it for a family – usually both spouses/partners work – so same ==============> disqulification because of income!

    keep reaching and citing nonsense! once the again, the people in the field already confirmed this issue a million times.

    you can keep saying it, but it will not change the fact (not opinion) that in hoboken in 2009 the text credit help very very few purchase a 2/2 over 500K. i usually hate facts versus opinion, but this one is fact. sorry πŸ™‚ πŸ™‚ πŸ™‚

    so, what about the Hobokenprice-to-rent ratio being around 15! did you or your pal post the related article?

  17. homeboken

    Where is the data supporting the price to rent ratio being at 15 in Hoboken. Please repost, I’d like to see that

  18. whynot

    just an estimate (“being around”):

    a nice 600K place rents for around $3100

    what is your estimate? πŸ˜‰

  19. homeboken

    Ahh, OK so you playing in fantasy land and making up numbers. First, let me help you with some basic math.

    3100 rent = 37,200 per year * 15 = 558,000
    btw your number above was that this nice 2bd/2ba could rent for 3,000 which gets you 540,000 value at 15 times.

    Neither of these is 600,000.

  20. whynot

    wow – i was so far off! 16! not 15! scary!

  21. homeboken

    And this is why you can’t be take seriously on this topic. Being 1 point off is no big deal to you. Tell that to a buyer that follows your logic and overpays by 32,000 to 60,000.

  22. shortsequalmarket

    Wow so the dictionary must have a picture of you next to the word stubborn. If I am to believe you only Families earning over $150K buy in Hoboken. Too bad the median income statistics come nowhere close to making that believable. Who are your experts? Based on the people who post here and purchased last year 100% took advantage of the tax credit. That person bought a $500K home.

    According to you that person is a pauper by Hoboken standards and all of his neighbors make much more than he does.

    The only way to prove it to you is to get the tax returns, which I have no intention of doing. I am sorry common sense an logic are lost on you. There are also a lot of homes less than $400K in Hoboken which would appeal to singles making up to $75K. Thereby pushing up demand for the lower end.

  23. shortsequalmarket

    BTW what realtor said that people were not qualifying or taking advantage of the $8,000 tax credit in 2009.

    Even more importantly I take it you do not disagree that a lot of people were taking advantage of the credit from Nov to April thereby stopping the market from falling faster than it otherwise would have.

    Lastly, argue all you want with me, if you say there is no evidence that prices may be falling going forward that is only cause you choose to ignore it.

  24. TS

    Shortsequal: “shortsequalmarket said at June 8th, 2010 at 8:47 am
    Very rough numbers

    Hoboken Median Income = $100,000
    Without Public Housing = $150,000
    Median Home Price = $500,000”

    Shorts, I’d be willing to bet that the median income of homeowners in Hoboken is much higher than of homeowners+renters. And that, I believe, who make these numbers pretty useless.

  25. whynot

    no homeboken – tell your article!

  26. laki

    On homebuyer credit – While I actually don’t know for Hoboken specifically (i.e. one cannot check on such granular level looking at data that is publicly released nor is there any credible research available for Hoboken specifically), I’ve seen a statistical breakdown for the nation and the correlation between home price and whether the person is getting the tax credit is pretty damn high. I forget the exact number but nation-wide a home that sold in America below 400-500k in the time period when the credit was available – the overwhelming majority of purchasers did qualify for the credit. This i know for a fact as I’ve read credible research on the topic. Is Hoboken a statistical anomaly? While anything could be true – I doubt it.

    On a price-to-rent ratio … I actually don’t know what the ratio is in Hoboken, but my thesis is that in Manhattan prices should go down 30-50% to get these ratios in line with how they looked historically … Should prices in Manhattan correct this much what do you think would happen to Hoboken? Hoboken market is so small compared to Manhattan that i believe whatever happens in Manhattan will define the trend in all the surrounding areas.

    Btw, is it true that a 600K place in Hoboken rents for 3,000 per month? This is pretty damn high. I live in a 800 sf place in Manhattan (midtown east) and my rent is 2,675 per month… Its a 30-40 year old doorman building with 20 floors in a decent location. I know people who live in much nicer places in Manhattan (1,300 sf 2br/2ba newer construction, also midtown) and they were able to rent those out for 4K or so recently. (Those types of places used to go for 5K+, but rents on those have gone down by over 20% in the last 2 years)…

  27. L&S

    Laki – 2beds/2bath with parking rent in elevator blds rent for about 2,800-3,200. The same place sell for $600K. Not a realtor but I just rented my place out. BTW – the rent was increased back to 3% below 2007 level and about 5% YoY increase. Not sure why you think rents will fall?. Another buddy for mine rented his place in 1 day for asking. His tenant was trying to get a discount and was shocked when his hard ball tactics did not work. Two examples dont make a trend or mkt but still imp.

    – Why are you all so focussed on tax credit? If your decision to buy a house is based on an additional $8K, then dont buy it.

    – I think the biggest issue with Hoboken is supply of homes (the choice is the same)and schooling system. Improve the schooling system and increase the availability of unique homes – price start to move upwards.

  28. Craig

    “The real question is – did you know when you went under contact in 2009 that:

    the limits were being increased?
    the credit was being extended?

    in other words, did you just get lucky?” – whynot

    I was aware of both. Neither I nor my girlfriend qualified under the individual $75k income limit of the orignal tax credit. It was only when they extended it and raised the individual limit to $150K that we qualified. That and the fact that FHA spot approvals were ending Feburary 1st was what got us into the market sooner when we were originally planning on waiting. This was because FHA spot approval was the only option for us if I wanted to buy a home in Hoboken. As first-time buyers who were not coming out of a prior home and were not getting help from mommy and daddy, there was no way we were going to raise over $100k in cash to put down 20% on a 2 br condo at Hoboken prices unless we raided our 401(k)s, which I wasn’t about to do.

    Some here may argue my inability to put down 20% is a sign I can’t afford my home. But the fact is my mortgage barely puts a dent in my prior monthly expenses as a renter. With the tax deduction, we each spend exactly $200/mo. more than we did on our rental, which was an upscale 875 sq. ft. 1 bedroom plus den.

  29. whynot

    “I was aware of both. Neither I nor my girlfriend qualified under the individual $75k income limit of the orignal tax credit. It was only when they extended it and raised the individual limit to $150K that we qualified.”

    You went under contract in 2009 – so you got lucky in 2010 when they raised the limited? i don’t understand.

  30. homeboken

    L&S – The rental market operates somewhat in a vacuum, espicially with unit that are for rent by owner. My counter example to your’s is that I just renewed my lease FRBO, at the same rent level as last year, but with 1/2 month concession for August.

    Knowledge is the key for rentals, some landlords know more than their tenants, some do not.

  31. Craig

    “If I am to believe you only Families earning over $150K buy in Hoboken. Too bad the median income statistics come nowhere close to making that believable. Who are your experts? Based on the people who post here and purchased last year 100% took advantage of the tax credit. That person bought a $500K home.

    According to you that person is a pauper by Hoboken standards and all of his neighbors make much more than he does.” – shortsequalmarket

    I’ve actually lost track of who is arguing what here. But I assume I am the representative sample you guys refer to. If it helps clear this latest debate up, for the record my lady and I got the tax credit in 2010 – and combined we earn substantially more than $150k as a household. I’m not sure whose theory that proves wrong, but those are the facts.

  32. Craig

    “You went under contract in 2009 – so you got lucky in 2010 when they raised the limited? i don’t understand.” – whynot

    Allow me to clarify. They announced they were raising the income limits of the tax credit effective November 6, 2009. The new limit put us in the ballgame. As soon as we saw that we started looking seriously with intent to buy. We were under contract by December 2009 and closed January 15, 2010. Even though we bought in 2010, the law allowed you to claim the credit on your 2009 returns instead of waiting for your 2010 return next year, which we did. Had I waited until tax year 2010 to claim the credit, I would not have qualified because I got a raise at the end of January 2010 that put me out of range of the credit again. So because Uncle Sam gave me the choice of which tax year to take the credit, I took it in the fiscal year in which I qualified for it – 2009 and got the money in 2010, the same year I bought the place.

    Make sense? Dude if you’re gonna be a homeowner and start taking itemized deductions, I strongly advise you familiarize yourself the tax code – or get a good accountant.

  33. laki

    L&S,

    “Why are you all so focused on tax credit?”

    Because the existence of the tax credit is distorting the supply demand dynamics of the market. I think people are trying to figure the level of demand for housing, and they’re trying to back out the temporary effects of the tax credit in order to derive what the demand would have been had there not been for the credit. If you’re trying to quantitatively analyze the housing market – this is very important.

    “I think the biggest issue with Hoboken is supply of homes”

    This is not the case. If there is one thing I’m confident about this would be it. Hoboken does not exist in a vacuum. There are millions of units in the NYC metro area. If you think that Hoboken price dynamics are independent of the New York metro dynamics – please do a statistical study. What you will find is that while there might be some idiosyncratic factors that are Hoboken specific, the most significant principal component in the price dynamics (which is common for the entire region) overwhelms all the Hoboken specific factors. (in leyman’s terms prices, volumes, trends, supply, demand, discounts, etc are highly correlated across the entire NYC metro region. They all move together). This is a fact. It is highly highly unlikely that any of the Hoboken specific metrics will all of a sudden materially deviate from that of the entire NYC region. Over time anything is possible, correlations change, preferences change, one area might be more preferable than the other, etc etc. But over short term (several year time frame) all those factors explain less than 10% of price moves. So if Manhattan prices go up 50% in the next 5 years, Hoboken prices will more or less go up 50%. If Manhattan prices go down 35%, Hoboken prices will more or less go down 35% as well.

  34. laki

    L&S, I also have no idea what rents will do in future. I simply said they went down 20% in Manhattan over the past 2 years. I also have no idea what the rental market in Hoboken looks like. Somebody said 3,000 for a 600,000 unit and I just made a comment that 3,000 rental in Hoboken is very expensive comparatively. I know that you can rent a decent 1,000+ sf unit in Manhattan for below 3,500. The Manhattan market is funky these days. You find a listings asking 4,100 but you offer them 3,500 and one out of 3 landlords will take the offer. And these are nice newish places, cool buildings, nice space, etc. I’m not describing some old dirty brownstone that no one wants to live in.

  35. shortsequalmarket

    Craig

    You are the representative sample. I am blown away that whynot refuses to believe there was an impact in Hoboken due to the tax credit. I do not have October-November Dabos but I am sure the Nov drop is similar to the drop we have seen in May.

    Whynot also feels much better calling people names. It is amazing whynot does not even know when the laws got enacted. I mean if I was going to tell people they were wrong or lying I would want to know the facts before I did so.

    L&S I agree it is not a good idea to buy to capture the tax credit, however the data indicates a lot of people did. Unless you stick your head in the sand (like whynot) and say the drop-off in May was just random.

    TS how much higher are the median incomes for buyers in Hoboken. I imagine they are much higher in Maxwell Place (large units), the W, Garden St Lofts, etc. However, once your factor out those places is it really much of a stretch to say the families buying $500K units are earning a median of $150K annually?

    Are these medians unrealistic

    Project people = 0
    Renters = $75K
    Mid tier condo $150
    True Luxury condos $250

    Remembering that Real Housewives (Teresa Guidice, etc) across the country are living in million dollar homes while earning less than $80K saying current Hoboken medians is much higher is a stretch to me.

  36. shortsequalmarket

    The above medians are for families in those type of home, not the price of those homes.

  37. TS

    Shortsequal,

    I don’t quite understand the point you’re making. I am going off the #s you provided. If the median income of owners+renters (taking out people in public housing) is 150k, then I’m certain the median income of owners alone is much higher. I’m not going based on a hunch, or what is credible (according to you), or imaginary #s but a general trend. Owners tend to have higher incomes than renters – for many reasons. The one probably most relevant to Hoboken being that there is a huge % of renters just out of college who don’t make anywhere near the median income of 150k. And this will drag down the overall median income.

    Additionally, by the imaginary numbers you provided you assumed that the number of true luxury condo owners equals the number of renters, so that they balance out to 150k. I seriously doubt this is the case. I would think the renters greatly outweigh the residents of Maxwell, Hudson Tea, Harborside, W, Garden St Lofts, etc.

    Also consider that even if, say, 150k were the median income of just homeowners you’d have a problem of figuring out what % of those people have been owners since the 80s and 90s; the point being they will probably make less than people buying now and couldn’t afford to purchase at today’s prices. What is really needed is the median income of people buying now or in the last few years to get an accurate picture of things.

    All that said, by the numbers you provided – assuming they’re accurate — you pretty much proved the opposite side’s point. If the median income of renters+owners is 150k, I’d be surprised if the median income of owners alone is lower than 200k. Based on some stats I’ve seen in other towns in the past, double the income for owners isn’t atypical.

  38. carl

    I wish this idiotic tax credit debate would end. People get a life and tell my where housing prices are going and where to invest the downpayment if they continue to go down.

  39. shortsequalmarket

    Well the Hoboken median income is just over $100K. I brought the number up to $150K for these purposes. Given the your nature of Hoboken home buyers (younger than suburban) the median for homebuyers may be over the $150, but likely not buy much. This is not to say there are not two attorneys, bankers, etc. However there are also a lot of merchandisers, back office making a lot less. I think $150K sounds fair for homebuyers (much higher than the median).

    Sorry Carl that I would not drop this. The only point is that there is plenty of evidence that the Hoboken housing market has been supported by the government over the last year. Without that support it is not s stretch tha lower prices are quite possible.

    Others on here have said there are no evidence and that Hoboken prices have stayed flat during the last year without government support. The data says something quite different. I hope you have picked up on that point.

  40. UPennAlaskan

    laki…..couldn’t agree with you more. Any correlation breakdowns between NYC and Hoboken will be temporary. The market will arb out any mispricing.

    carl….don’t invest the downpayment, just hold it. However, if you must…go long low beta names (P&G, Walmart, Coke, Con Ed, Exelon) and short high beta. ie. buy XLP and XLU and buy SDS (leveraged inverse etf so its really acts like a short). Make sure you dollar weight the trade. Another spread trade is long US equities and short European equities. Good luck.

  41. shortsequalmarket

    Isn’t it funny that Laki and UPennAlaskan who do not post much indicate they believe in correlation or cross price elasticity. Why did I get blasted for using the same to try and figure out the markets direction.

  42. whynot

    carly – the tax credit debate has to do with where prices are going! if you’re trying to follow a trend, you need to determine whether or not the credit had an effect of propping up prices?!? What’s abotu that, except for your idiotic response?

    also, if you’re holding money for a down payment, listen to UPennAlaskan – just hold it – what a idiotic question that was!

  43. whynot

    sorry, it’s early, i meant:

    “What’s idiotic about that, except for your idiotic response?”

    πŸ˜‰

  44. homeboken

    Mortgage Apps fall for 5th straight week, to a new 13 year low.

    http://www.cnbc.com/id/37588240

    “Purchase applications are now 35 percent below their level of four weeks ago, as homebuyers have not yet returned to the market following the expiration of the homebuyer tax credit at the end of April,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement

    Of course, Hoboken is a very special place that is immune to all of this of course….

  45. whynot

    homoken – yes, obviously the mortgage apps are tied to the tax credit. if the tax credit did not have a substantial affect on hoboken (for certains reasons discussed above), then this does not have the same effect on Hobobeken – therefore, immunity depends on your opinion on whether the tax credit had an effect?!?

    round and round and round and round

  46. L&S

    Laki – I dont disagree with the correllation of NYC and Hoboken real estate mkts. Not sure what the R squared is but it is probably close to 1. In fact I strongly believe the real estate mkt in this region is driven by the health of the financial services sector. My comment about supply of homes was based upon the fact that when I bought my place in 2001, i had a choice of like 5 apt that fit my requirements. Today you have a choice of over 200. The problem is that there not enough unique apts. In NYC you have decent supply of appts but most of them are unique and different..not so in Hoboken. Furthermore, till we improve the schooling system in Hoboken, this will always be a renters town. Even homeowners like myself have rented the place for like 5-7yrs from the bank, which means their is always supply of homes.

    This tax credit example is interesting because I heard the same reason from people on the fence when the FED was not going to buy agencies. Fed stop buying mtgs, rate going up, prices going to fall. Did not happen. This time around also time will prove that tax credit will not imapct home prices but the general state of wall street in 2010..if banking has a decent year then prices will stabilize and go up, and the end of the day it all comes down to the financial services sector, which is driven by GDP and mkts..so more MACRO trade.

  47. UPennAlaskan

    To shortsequalmarket/L&S…I have absolutely zero facts or data to support my belief. However, here it is:

    The tax credit helped put a big bid in the general US housing market to keep it from completely crashing. This supported the Wall Street banks who own the MBS/CDO. This helped with writedowns (with the help of accounting policy changes)and perhaps even potential markups if the original cuts were deep enough, net net massive profit improvement. These profits assisted in keeping Wall St infrastructure people (Risk, Accounting, IT, HR, etc) employeed. Which in turn moderated home sales from a cliff in Hoboken and other like areas.

    Therefore, my view is the tax credit was a powerful 2nd derivative buoy to the real estate in the region. So I kinda agree with you.

  48. carl

    Whynot- By a huge margin I discount your comments more than anyone else on this blog. And I think by the comments other people have left they feel the same way. How does that feel?

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