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.

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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!

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  1. homeboken

    My reading of A-1678 in its current form is that it is $100million capped. First come, first served. $75million for new construction, $25million for existing homes. Anyone that purchased in 2010 is eligible.

    Now, I understand that the language is subject to change and subject to approval from the Govenor, which I hear is non-existent.

    BUT, the idea of giving a tax credit to people that already purchased homes is horrible. If the idea of the credit is to stimulate future demand, why give the credit to someone who already purchased. It’s June already, I bet 50-75% of the cap could be absorbed by people who already closed this year. At $15,000 per purchase, the cap covers only 6,666 home purchases.

  2. dogfood

    The bill says something like “following the date of enactment” so already purchased homes don’t quality I believe.

  3. homeboken

    Dogfood, I hope you are right. The language I read said transactionss occuring during the 2010 calendar year. Again, maybe it is just sloppy writing, b.c making it retro-active to Jan 1 defeats the purpose of what they are trying to accomplish (regardless if you agree with the plan or not)

  4. whynot

    Shortsequalmarket and Homeboken – What are your thoughts on 605k for 223 Park? tiny (tiny) living space, awkward backyard, no parking and okay finishes – good location.

  5. shortsequalmarket

    I’ll take a look later. However, thanks for pointing out it has a private backyard.

    Interesting how your one off cases carry more weight than the dozen I cite.

  6. shortsequalmarket

    BTW can you tell me your predictions if an overwhelming 5 units continue to get DABO’d per week.

    Here are mine: Shorts Sales, Foreclosures, and lower prices if only 5 are sold per week. Amazing that occurred with record low rates, did you tell me that was not possible?

  7. homeboken

    whynot – 500psf for a totally updated condo, with private yard on 2nd and park seems about right. Not sure why you think 1205 square feet is tiny, that seems like above average for a 2 bedroom in this town.

    Did you happen to notice that this place sold for $100,000 less than it was purchased for 2 years ago?

    http://tax1.co.monmouth.nj.us/cgi-bin/m4.cgi?&district=0905&block=178&lot=7&qual=C0001

  8. whynot

    shortsequalmarket – i was just asking for your opinion on the unit itself, not making it a one off case. calm down. :( i thought it went got too much – espicially because it was on the market for a LONG time.

    that said, because you bring it up, i’m not sure it is a one off case. as the per the realtors, 223 Park has been pretty typical! in regard to the only 5 sales this week, one week does make trend. there were numours sales last week without the tax credit available.

    can you ever some the sky is not falling when there market has been steady?

  9. whynot

    homeboken –

    Yes – we all know the market is down 10-20% from the height. i was told the seller was under contarct with the building well before the crash. not much of a news flash there. sorry smarty pants! 😉

    in regard to tiny, i saw it – there’s no living space – TINY!!! any questions?

  10. homeboken

    So what’s your point? I agree it is a decent price.

    Maybe you can give us your sage wisdom on the WSJ article from this morning.

    http://online.wsj.com/article/SB10001424052748703691804575254573766609924.html?mod=googlenews_wsj

    10.73% of all NJ mortgages are seriousyly delinquent. That means they haven’t made a mortgage payment in 90+ days. Do you know what the cure rate is for 90+ delinquencies? That is tiny.

    Spare me the part about how this doesn’t apply to Hoboken. 10.73% equates to thousands of homes that will likely end up being bank owned in the state. No city is immune.

  11. whynot

    its not happening in Hoboken – if so, show me! where all of the foreclosures? anything distreesed (i.e. distressed price) gets pick up very quickly! so yes, right Hoboken is immune!

  12. Lori

    You might notice I’ve been posting the number of short sales in recent weeks. The most we’ve had is 2.

  13. shortsequalmarket

    So that is 40% of this weeks Dabos 😉

  14. shortsequalmarket

    Is there anyway to get sizing on Lis Pendings, Tax Delinquencies, and/or delinquent mortgages for Hoboken?

    FYI these are the steps on the way to foreclosure.

  15. Lori

    223 Park was a very unusual property – the unit was on the parlor floor and 2nd floor but the backyard was down below. To get to it you had to go outside and down a flight of metal stairs. The other owner’s unit was on the ground level on the back. It was a very nicely done renovation though and the outdoor space was quite large. I would not call the living space tiny by any means. It is a 3 window wide brownstone building and the kitchen/dining/living configuration was typical for that style building. There was room for a full dining set.

  16. shortsequalmarket

    Last week there were 13 Dabos, this week there were 5. If the 13 Dabos is taken as the trend this equates to an approximate one year supply of homes on the market. I have not seen one unbiased (ie not NAR or Whynot) that indicates that level of inventory is indicative if higher prices in the future. In fact, I believe about 80% of information on that level of inventory indicates declining prices.

  17. shortsequalmarket

    What was the sq footage all in (but not including yard) on 223 Park?

  18. homeboken

    shorts – 1205 per the tax records

  19. Lori

    That’s correct.

  20. Craig

    Without parking or an elevator 223 Park is a $525k condo more or less. It’s price gets pushed into the $600s because of the deeded yard (+$30-$40k) and the extremely desirable location value (+$50k). While renovated, it’s still an old building. It’s not luxury, but the fixtures are clearly above average. Perhaps the layout is poor (as is usually the case in old rowhouses), but 1205 sq. ft. is not small. In fact that much space is large by Hoboken standards, where the average 2 br/2 ba units are 1000-1100 sq. ft.

    Whynot, if you think 1205 sq. ft. is small, you are going to be very frustrated searching for a home that is large by your standards that is affordable. My advice: avoid older rowhouses in your search and stick to looking for newer construction to get better floorplans.

    223 Park is an example of where Hoboken’s market stands. It sold for $100k (15%) less than it commanded at the peak. However, there is no evidence that there will be further reductions beyond that. Most properties have lost 15-20% of value since 2006-2008 prices. That is not in dispute. What is being debated here is whether there are further reductions in store beyond that. Since prices have held pretty steady for desirable units the last few months, I think not. Does anyone actually believe 223 Park will be selling for $505K by next year? I don’t see it.

  21. whynot

    sorry – i don’t have much time to respond, but 223 park has very little living space – its two levels, which i think eats into the space. if you saw it, you would think the living space was tiny! trust me! :) :)

  22. shortsequalmarket

    Prices have held steady during the Spring buying season and in the presence of $8,000 tax credits.

    Of course the above statement is only true if you do not consider 2/2 with elevator, stainless steel, granite, parking, built in the last 10 years. Those prices are down 10% in the last few months.

  23. whynot

    “down 10% in the last FEW months.”??? what is??? 2/2 with elevator, stainless steel, granite, parking, built in the last 10 years??? there is no way this statement is true.

  24. shortsequalmarket

    Yes I am just making up all those $475K units that were $50K more several months ago. See previous weekly review for all the listed units.

  25. shortsequalmarket

    I even left out 711 Clinton and Cypress Point units that sold between $375 and $425 during the last few months.

    I guess it is easier just to say real life examples are not true.

  26. Craig

    @shortsequalmarket – 711 Clinton was a short sale without bank approval with structural/mold problems in the building. It wasn’t even a true 2 bedroom – it’s a 1 br + den. You’re holding that out as an example of typical price reductions? Nearly every unit with the price reductions you can cite has an issue making it less desirable than prime properties. The desirable stuff is holding steady.

    My building on 3rd and Adams is 2/2 with elevator, stainless steel, granite, parking for most units, and was built in the last 10 years (built in 2002). A unit 2 floors above mine closed last month for $95k more than I paid in January. Where are you seeing 10% reductions in similar buildings over the last few months? Cite me specific examples.

  27. homeboken

    Craig – You purchased $10k below the 2004 sale price, you got a great deal. People in your building probably were not pleased to see pricing head that far down though I bet.

  28. shortsequalmarket

    920 Jefferson

    536 Grand

    Seems to be a race to $450 in those two buildings. I think each building has 4 units for sale. Although 536 Grand may not be granite.

    Cypress Point and Capella may also be good examples.

    BTW thank you for proving my point. I keep harping on how many darn exceptions there are. Short Sales, Floor plan, view, tenants, etc. If that is most of what is listed and sells then it seems to me that is the market in Hoboken.

  29. whynot

    Craig (and basically Lori and the other sales person/broker on here sometimes) could not have said it any better:

    “The desirable stuff is holding steady.”

  30. whynot

    By the way, our real estate rule of thumb (we’ve owned before), always purchase something “desirable”! :) :) :)

  31. Craig

    @homeboken – I took advantage of a situation where I had a desperate seller who had already moved to Denver two months prior, yet was still paying a mortgage and had to get rid of it. As a result, I likely paid below market value ($385/ sq. ft.), so I’m an atypical comp.

    @shortsequalmarket – 920 Jefferson is a nice building, but it’s on 9th & Jefferson. Try walking to the PATH or ferry from there and you’ll get an idea why it’s so cheap. Put that building on 1st & Jefferson and it’s $50k more (similar units at 75 Jefferson sold for $517k). Same goes for Capella, which is on 13th and Adams. Show me reductions to those prices in newer buildings elsewhere than the northwest.

    536 Grand I am very familiar with as I looked at several units there. The quality varies. Unit 407 can be had under $500k, but it’s really a 1br + den and you get white appliances (which you’ll find in many units there). Other units for sale there have good potential, but need new bathrooms and kitchens. It’s at least a 20 minute walk to the PATH. Swap that building with the one at 101 Park’s location and those same units would command $200k more.

    Can you find sub $500k 2br/ 2 br condos in Hoboken? Sure. But there’s a reason why. The question is are you willing to make the quality/location compromises it takes to live in them?

  32. whynot

    i hope shortsequalmarket does!!

    Clark: Roll ’em up!

  33. whynot

    that’s a joke shortsequalmarket. just a joke. 😉

  34. Lori Turoff

    One day I’m going to have a big party and invite you all.

  35. shortsequalmarket

    My point is that all of those places were more expensive recently. There is something called cross price elasticity. Sooner or later it always pans out. Continuously declining prices in the NW with flat prices close to the PATH cannot go on forever. It might be worth $50K to be closer to the PATH, but at $100K the bus to midtown and $5 taxi rides gets appealing.

    Craig you if noted if those units were closer to the PATH they would be X amount more. Are you insisting that X amount will increase as prices at those units decline?

  36. Morally_Right

    This story on Bloomberg about empty condos in Manhattan…What are the implications for Hoboken?

    http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aQ26jbABFaxA

  37. shortsequalmarket

    Lori

    Calculated Risk did a story on people who put deposits on multiple homes in order to make sure one closed prior to June 30 to get the government cheese ($8,000). Is there any evidence this may have happen in Hoboken

    Just a thought, it was posted in April that since there were only about 20something units per week being Dabod in April the government cheese was having little effect in Hoboken. Since the last two weeks have averaged nine Dabos despite historically low interest rates is it safe to say the tax credit was having a sizable effect?

    All

    Could any of the following be considered “Evidence” of potentially lower prices
    *A significant drop in Dabos
    *Historically high listings
    *Stubbornly high unemployment
    *Drops in government subsidies going forward

    Once again I am not saying Proof I am just asking if this is “Evidence”

  38. shortsequalmarket

    By the way the argument that units are not falling in price just taking longer to sell was used in Phoenix, Vegas, Sacramento, Naples, etc in 2006. How did that work out in the long run.

    I know Hoboken is different (I agree, specifically our #1 industry is not construction) however that is “Evidence” that lower prices could occur sometime in the future.

  39. whynot

    to quote a great shortsequalmarket, in particualr, his or her last post:

    “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could” “could”

    :) :) :)

    Lori, by the way, can Tiger bring his boy friend to the party? Grwwwwwwww! 😉

  40. shortsequalmarket

    Unlike Others I state “facts” and while I believe my opinions are likely there is a small chance they could not happen.

    I bet you were glad to see/hear that 2.5 years after the recessions started private employers still have not starting hiring. Clearly a bullish sign for housing. How many $600K condos can temporary census workers purchase?

  41. TS

    Shortsequal,

    Where are you getting a significant drop in DABOs? Do you mean the drop in only the most recent week? Or do you have monthly stats?

  42. TS

    Also, how are you figuring “historically high listings”? I recall there being just under 600 units on the market some time last year.

  43. Lori Turoff

    I’ve heard of buyers making offers on more than one property on rare occasion because regardless of the tax credit, sometimes a buyer’s offer is not accepted or an agreement is not reached or the deal does not make it through attorney review. There is nothing wrong with that and sometimes it’s a good idea.

    I have not heard anything at all to support the idea that buyers were going out making offers on multiple properties specifically to beat the tax credit deadline, no.

    Will you be allowed to bring guests to the party – hmmm – I’ll have to think about that one. : )

  44. shortsequalmarket

    The last two weeks have averaged 9 Dabos. It was in the 20s in April. It was only 5 last week.

    I said historically high, not a record. Prices are down since last year even with significant government subsidies. Hoboken listings in the 500 to 600s is historically high and has preceded falling prices (Even with substantial government subsidies)

  45. shortsequalmarket

    Why all the nitpicking around my facts?

  46. laki

    for whatever it’s worth, realtytrac says that there are 75 bank owned properties in 07030. I remember people asking about this , so I figure I shre the info and the source

  47. Lori

    Realty Trac is an interesting site. My repeated experience has been as follows: you get an email saying there are 75 bank owned properties in 07030 but when you go to the site and click through they are “near 07030″ and mostly in the Heights. Here is the link, I don’t know if it will work but go ahead and try it for yourself.

    http://www.realtytrac.com/mapsearch/mapsearch/mapsearch.aspx?a=b&ziponly=true&txtcity=07030&zipcode=07030&selstatus=D&selcounties=NJHU&accnt=181480#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

  48. TS

    Shortsequal,

    There is “nitpicking” about your facts because you’re claiming you’re the only one giving facts, when the ones you give are questionable.

    Here is the history of DABOs dating back to April on a weekly basis:
    5, 13, 13, 20, 29, 21, 25, 11, 11, 17, 10.

    To me, aside from the last week, this indicates nothing as it could be due to seasonality. In April it looks like we had 3 pretty slow weeks relative to what happened afterward.

    As far as “historically high listings”, has it occurred to you that we have historically high listings because total existing condo stock in Hoboken is much higher than it has been historically?

  49. TS

    Also, what measure are you using to determine prices are down since last year? I see $/sqft up 5% in April 2010 compared to 2009, DOM down, and # sales up almost double.

  50. shortsequalmarket

    I compared unit to unit which is more appropriate. Specifically I looked at 2/2 with parking and elevator in midtown and NW. Those prices are 10% less than they were 6 months ago. Check last weeks discussion for the specific examples.

    Seasonality, really? Yes those darn slow Late Spring Early Summer doldrums. Isn’t it much more likely you had some late reporters in Early May and that the market was being propped up by the $8,000 government subsidy in April. The data seems to align with that theory.

    Once again amazing how upset people get with this information. I may laugh to myself when people claim higher corporate profits (primarily due to layoffs) will yield higher prices but I never attack the way housing boosters attack me. Why such anger at an anonymous poster?

  51. shortsequalmarket

    BTW if I adjust for sales last months Dabos give 11 months of inventory. A very high number.

    On the bright side isn’t it great that 100 luxury rentals in the Berkshire is about to hit the market. I am happy to know there will be more luxury choices that will not require families to risk their financial well being buy buying in Hoboken. I

  52. TS

    Shortsequal,

    Seriously, your factual data is handpicked data points restricted to a certain subclass of the market? Are you joking?

    Secondly, I’m not angry at all, sorry if it came off that way. I’m very open to prices still drifting down, but you have not provided anything to convince me of it – nor to justify your conclusion. First you said prices are down since last year, now you qualify to 2/2 with parking and elevators in midtown and NW. What next? Try to remain consistent in your claims so we can actually have a real discussion.

    Also, as far as the one week of bad sales – take a guess. Probably, due to Memorial Day weekend, don’t you think?

  53. FN

    Laki

    I know the realty trac email say 75 bank owned property in 07030 but when you go to thier site and drill down they show 47 and that too only 8 in hoboken (1 is repeated) and 38 are in jersey city

    Although they show approx 75 property in pre forecloure and 6 in auction.

  54. shortsequalmarket

    Of course that one subset is a substantial portion of the market. IMHO it is unreasonable to think cross price elasticity between that segment and many more in Hoboken is zero. There have also been listings at the Shipyard below $600K recently, which was not the case one year ago. 415 Newark has been racing lower. Although I do admit I do not follow the older parking free units near the PATH.

    Maybe the 5 is due to the holiday, but the 13 in the two previous weeks is less than 50% of what was occurring at the end of April. Looks like a long hot summer for sellers unless they lower their prices, which is what I preduct will happen.

  55. shortsequalmarket

    And once again what I am saying is there is plenty of evidence that prices are going down, which is different than those who say there is No Evidence.

    I think whynot gets more angry and calls name, I have no idea why. Is that person threatened by discussions on lower prices in Hoboken?

  56. Lori Turoff

    Maybe I made this comment on the wrong post but there is the link to the Realty Trac info – and, indeed, there are not really 75 bank owned properties in Hoboken. When you click through you find that they are “around” Hoboken – like UC & the Heights. Very different.

    http://www.realtytrac.com/mapsearch/mapsearch/mapsearch.aspx?a=b&ziponly=true&txtcity=07030&zipcode=07030&selstatus=D&selcounties=NJHU&accnt=181480#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

  57. laki

    Thanks for clarifying Lori.

  58. TS

    Shortsequal,

    If you knew anything about statistical inference you would know that inferring a rule from a non-random subset of a population is a huge error. And cross-price elasticity is a very weak attempt to excuse this. In many different cities – Hoboken included – certain neighborhoods are faring far worse than others. Certain neighborhoods are relatively flat while others have declined. (And it is entirely different thing to state that one will continue to remain flat and the other continue to decline forever, as you accused someone else of.)

  59. shortsequalmarket

    is that anything like using the Hoboken median despite month to month composition changes? My method comes a lot closer to matching the Case-shiller index in terms of comparing like units.

    Given I follow 2/2 with laundry, parking, etc. Most of those units are midtown or NW. However over the last several months I have seen asking prices of units from The Shipyard (below $600), to Upper Grand (below $500), to midtown, to Sky Club (just closed at $440), to 415 Newark (no laundry I know) continue to fall. Admittedly I do not follow the older places without parking near the PATH.

    Real Estate is not like a stock market to clears very fast. It is not a stretch to believe in the long run ratios between neighborhoods will return to historic norms. Based on falling prices in many building in neighborhoods, if something is holding out it is the exception and it is not a stretch to believe it will fall too.

    Why do you believe prices will remain flat or rise?

  60. shortsequalmarket

    Temporary tax credits change behavior temporarily. It’s simply shifted
    demand forward. … It actually created some price appreciation that’s not
    supportable long term.”
    Douglas Duncan, Fannie Mae Chief Economist, June 4, 2010 via Bloomberg

    What does he know??????? He needs to speak with whynot first before he makes a fool of himself.

  61. TS

    No, your method does not. It is flawed. You cannot choose two neighborhoods, and then within those only 2bd units in elevator buildings, and extrapolate to the entire market. What if those areas have undergone supply shocks??

    Come one people, admit when you’ve made a ridiculous claim rather than double down on it.

    If you knew ANYTHING about statistics you’d know your method is more problematic than taking the simple mean/median.

    And although it takes same sales, the Case-Shiller is VERY different than what you’re doing – they don’t extrapolate from sub-markets – and if they did, they would be out of business.

    And I never said I believe prices will remain flat or rise. I just haven’t seen the proof – yet – that they have fallen considerably since last year.

  62. TS

    Shorts,

    Simply citing market “experts” does not prove anything. I can cite Paulson saying prices are going up – but that doesn’t prove anything, despite his making the right bear call before.

  63. shortsequalmarket

    So for the record similar units falling in price throughout Hoboken is not proof. If that is not what is?

    My link is that it is likely based on falling prices in many places throughout Hoboken lower prices for the rest of 2010 is likely. You can disagree with that. However, a lot of prices have fallen.

    Lastly, I was not using statistical theory. I was using actual data of a certain size to drive logical conclusions. If any time you would like me to walk you through deriving the sigma of the standard deviation or how to resolve heteroskedastcity in OLS I will be glad to do it.

  64. Craig

    @shortsequalmarket – I believe prices will remain flat in the near future because after some huge reductions throughout 2009, prices have been consistently flat since December when I started looking to buy. Most units are selling for between 3-5% under asking. That is a typical reduction from asking to final sale price in this market historically. The only units with larger price reductions than that were either overpriced to begin with or are a few pegs down on the desirability scale for one reason or another.

    Vesta is new construction with huge price reductions because it was overpriced for what you get, plus the location sucks, and they couldn’t sell those units as a result. The Upper Grand is an example of a development that was attracted those priced out of a similar, but better located building like the Oz. But now those same buyers can afford the Oz, thus putting pricing pressure on the Upper Grand with its less-desirable NW location. Tarragon knows this, hence why many of the more recent units they have built are now rentals instead of condos until the market improves. Do you think the Upper Grand would be selling any sub-$500k units if it were located on First and Grand? Location + quality = minimal price reductions since 2009.

    Which brings me to the answer to your question of why I believe the market will improve. The answer is it will improve because real estate historically always appreciates sooner or later. It’s not a matter of if it will happen, but when. I’m in my place for 5-10 years minimum. I’ve got plenty of time to wait out the inevitable. Hopefully you will have gotten in the game before prices start heading up.

  65. shortsequalmarket

    In a NYT op-ed, Yale housing guru Robert Shiller says the decline could play out for a long time, noting that Japan saw 15-straight years of year-over-year home price declines.

    I would look at the microeconomics not the a simple time series regression. The foundation that exists now is quite different than it was from 1945 to 2005

    Read more: http://www.businessinsider.com/shiller-japans-housing-market-fell-for-15-years-2009-6#ixzz0pwFsDhQ4

  66. TS

    Shorts,

    1. What similar units are you talking about? You restricted yourself to 2/2s in elevator buildings in two neighborhoods and *inferred* from this conditions for the general Hoboken market – for all neighborhoods, condo types, etc.

    2. “Lastly, I was not using statistical theory. I was using actual data of a certain size to drive logical conclusions.”

    What exactly do you think statistical inference is if not the above? There are no strictly logical (i.e., deductive) conclusions to be drawn from a market sample to the whole market. That’s precisely what statistical inference is.

    It’s clear to me you don’t understand exactly what statistical inference is, despite your attempt – by dropping terminology – to show otherwise.

  67. TS

    And Paulson sees the following:
    http://www.reuters.com/article/idUSTRE6495JR20100510

    “Housing prices, he said, will likely grow 3 percent to 5 percent this year and increase by 8 percent to 12 percent next year”

    As I said before, it’s unproductive to cite “experts” to prove anything – there’s always one on either side.

  68. homeboken

    Transaction volume plummets across the state after TC expiration. Again, I know that most here think that the TC has zero effect on the Hoboken market, but I don’t see how transaction volume dropping across the state won’t have an impact on Hoboken.

    http://www.nj.com/business/index.ssf/2010/06/after_tax-credit_expiration_nj.html

  69. shortsequalmarket

    I put a lot of thought into the following. I hope everyone appreciates it

    I hear the argument real estate will now rise because in the long term it has always risen. Now I know prices just don’t rise, just because, there are fundamental reason why that is the case.

    During the US bubble it is easy to see one of the largest contributors to home price appreciation was loose lending standards. The loose lending standards meant more money chased a scarce good pushing up prices.

    There were also additional fundamental reasons why home prices rose. The economic foundation of the country must be set up to support higher home prices. I think it is best to look at two time periods in the post war. The 1945 to 1981 and 1982 to 2006.

    During the first time period the US was a net exporter of goods and services gaining wealth from the rest of the world. The population was young and received few government services. While there was a high marginal federal tax rate there were many deductions leaving the US with a fairly low tax burden. State tax rates were much lower and states like NJ and CT did not even have income taxes.

    During the 1982 to 2006 the US became a net importer of goods. Factories across the Midwest closed down as the nation chose to import the goods. Where did the income come from to push up home prices? This is an easy question to answer: the US borrowed the money. Prior to 1982 most people in the country did not have credit card, car loans were not 72 months, and 20% down payments were needed to purchase a home. This all changed during this time period. In the finals stages as the country and individuals ran out of money the government guaranteed the loans as long as there was a home attached to it.

    The states that benefitted the most from the change in the US economy were Cal, FL AZ, NV, NY, and NJ. In the NJ and NY region the financial services industry grew in order to help foreign creditors invest in the US. Paul Volker noted financial services contribution to GDP increased from 2% to 6%. The Sand States benefitted as former factory workers flooded to warm weather states and much of the borrowing from the rest of the world was transferred through NY and NJ then invested in homes and hotels in the Sand States.

    How does the current state of the economy compare to the previous two periods that allowed for home price appreciation. It appears quite different:
    • Consumer credit is declining
    • Tax rates are rising
    • The population is aging and the young are being asked to support their seniors
    • Foreign creditors appear unwilling to lend unless there is a government guarantee
    • Regulations being placed on the financial services industry may reduce employment opportunities in the NY and NJ region

    The current foundation seems quite different than the economy of the previous 60 years. Prices could rise but it seems unlikely unless there are larger government subsidies or a hyperinflation. Sadly the hyperinflation does not seem out of the realm of possibilities when the policies of Obama, Geithner, and Bernanke are considered.

  70. shortsequalmarket

    BTW Homeboken. Transaction activity dived in Hoboken too. Amazingly since you would not expect a family earning $150K per year to desire an 8,000 tax credit to buy a $500K condo. I really do not understand the logic of the previous sentence, but I am sure whynot can explain it.

    Also if that family happens to have a state government job that they may soon lose it will have no impact either. Teachers, firefighters, policemen, support staff, etc do not fit into this income range as part of a two income family and are not interested in buying places in Hoboken. Once again why not is better at explaining that sentence.

  71. carl

    YOY prices
    JAN -12%
    FEB -18%
    MAR -14%
    APR -10%
    Theses are real numbers. No way market was up 5% in april

  72. shortsequalmarket

    Well Carl that is clearly not the case between 1st and 3rd on Garden. LOL

  73. TS

    Carl,

    From where did you get your #s? I took mine from what Lori posted a month or so back, and $/sqft was up 5% YoY in April and Median prices were up as well. The months leading up to April, however, saw the opposite.

  74. TS

    Actually it’s mean prices, so the discrepancy might be due to that.

  75. Tiger

    Whoa! I go to Vegas for a few days and I come back to find this. whynot, ummm…. whatchu talking about? Is it because of the offwhite rug? It is a very guy’s guy rug!

  76. laki

    Shortsequalmarket, I agree with your macro views and in general I’m in agreement that home prices will keep going down in most regions in US. Those areas of the country where rent/buy and income/buy ratios are out of whack will be hit the hardest in my opinion. Out of all the cities in US New York City has the worst price-to-rent ratio in the nation.

    Check out this link:

    http://info.trulia.com/file.php/1908/Prices+to+Rent+Ratio+For+Website.pdf

    New York, as a financial center, has benefited greatly from the finance boom of the last 3 decades. Sadly, the boom was mostly due to a credit bubble. Now that the bubble is deflating (this could be reality for the next 2 or so decades) all the trends of the past 25 or so years are likely to reverse themselves. Once Manhattan prices start going down for real – all the surrounding areas will go down as well…

    Buy to Rent ratio of 33 is not sustainable. That’s like owning a stock with a PE of 33! The only way you own a stock with a PE of 33 is if you believe that its earnings can go up double digits for at least several years in the future (i.e 5 years for 20% growth, or 3 years of 30% growth, etc.)…. Translating this into Real Estate, the landlord who wants to buy a place and rent it out at a Buy-to-rent ratio of 33 would only do so if he thinks he’s able to pass on double digit rent increases of a similar magnitude to those I presented above for a stock… But now on the flip side – if the rents keep going up double digit for several years – how in the world will anyone with a median income in NYC be able to pay his/her rent?

    So short of a multi year double digit percentage income and rental growth in Manhattan, the prices are likely to correct down meaningfully.

    Also notice that this ratio has to be below 15 in order for it to make more financial sense to buy instead of renting (page 2 of the doc – interpretation key).

  77. shortsequalmarket

    Let me cue the others on how you did not consider being able to paint the walls black or installing a jacuzzi tub.

    Of course that was true 30 years ago when ratios were lower and taxes were lower.

  78. whynot

    so, the Hoboken’s price-to-rent ratio is about 13-15????? for example, a 600K place rents for 3K. pretty good indicator to purchase! also, the purchase verse rent caluclators (with my numbers) are accurate – nice! 😉

    yes, yes, shortsequalmakret the end of the world is coming, so all of this won’t matter. new york will crumble, which will distroy the rest of the country. please just let us know when already, so we move overseas. as we’ve been over many times, prices have been steady since the initial decline.

    shortsequalmarket, for someone who thinks he’s a professor (i.e. someone who can’t make it on the outside, so they need to teach), i’m not sure what you don’t understand about the following comment: “most people purchasing a nice 2/2 in hoboken were NOT help by the 8K tax credit because they earned too much at that time.” We’ve been through this already – ask Lori! :)

  79. shortsequalmarket

    Oh yes the best way to admit you lose the argument, tell the person they are predicting the end of the world.

    Married couples who earned up to $200K ($250K?) and were first time buyers qualified for the $8,000 repeat buyers received $6,500. If this is not a Hoboken buyer who is?

    The data confirms this. This credit pulled forward sales into April which is why sales have been low the last three weeks.

    BTW a purchaser unless they were using the $8,000 as a down payment on an FHA loan whould be better off not sharing the potential tax benefits with their agent. Who wants to hear you might as well pay more now since you qualify?

  80. shortsequalmarket

    And the data proves prices have not been stable. Comparing like units indicates despite significant government assistance prices have fallen all over Hoboken.

    Sky Club 2/2 is down $440
    Upper Grand like units throughout the NW approaching $450 (920 Jefferson listed at $469)
    Shipyard 2/2 units less than $600K
    415 Newark prices racing downward

  81. whynot

    Incorrect – The tax credit that you referred to is the newer tax credit that did not even exist in 2009. The best way to lose an arguement is to make up the facts! nice try – very sick! 😉

    Like the sales people, brokers and data have indicated time and time again, a desirable unit has more than held steady since the initial decline. Even multiple offers!!! 213 Clinton sold out in weeks at 650k each! you love staws! :) :) :)

  82. shortsequalmarket

    The tax credit was in place from November to April and was exactly my point. Even though that tax credit propped up sales for the last six months prices still sold.

    Good luck on continuing to find those individual examples versus my dozens.

    The last example you gave before was a large renovated 2/2 with a private back yard that sold for less than it would have six months earlier.

  83. Craig

    @shortsequalmarket – Here are the big questions: Assuming you’re right and prices will continue to plummet, at what price point will you finally put your money where your mouth is and buy in Hoboken? Also when that day comes, will you be buying in the area of town you have consistently cited for the lowest price points, the northwest?

  84. shortsequalmarket

    It would be a combination of lower price and employment stability. I think 10% unemployment, potential financial reform, and the yet unknown expense impacts of Obamacare makes job security in NY and NJ sketchy at best. I think it is best to have the most mobility and lowest possible expenses.

  85. shortsequalmarket

    And I would absolutely buy in the NW but I am not restricted to that area. New Construction Fields projects are very nice as is Upper Grand.

    I would not buy Monroe or East.

  86. shortsequalmarket

    I also would not buy central (5th to 9th) Jefferson or East

  87. shortsequalmarket

    920 Jeff is closer to 10th before you ask.

  88. whynot

    shortsequalmark, states, “[t]he last example you gave before was a large renovated 2/2 with a private back yard that sold for less than it would have six months earlier.”

    Again incorrect! Four (4) renovated units around 1200 sf. ft. (at most) with no parking all went within weeks for over 650K!

    shortsequalmark, states, “[t]he tax credit was in place from November to April and was exactly my point.”

    Again incorrect incorrect!! The credit was not enacted unitl 2010 and was retroactive! Therefore, did people retroactivley purchase because of it?!? 😉

    Made up facts by shortsequalmark equals “garbage in garbage out”!

    Again, like the sales people, brokers and data have indicated time and time again, a desirable unit has more than held steady since the initial decline – maybe even increased! You just hate that FACT! WOW!

  89. homeboken

    whynot- you are wrong, the tax credit was originally implemented in 2009, it was extended into 2010.

    http://www.irs.gov/newsroom/article/0,,id=215791,00.html

  90. shortsequalmarket

    Please check Homeboken’s link. Also please note that even the previous tax credit allowed couples earning up to $150K to participate in the $8,000 tax credit.

    You specifically asked what I thought about an unit with a private backyard that sold for $605, make up your mind.

    Like you said garbage in garbage out. Perhaps if you spent more time critically thinking and less time criticizing opposing points of view you would not make those mistakes.

  91. shortsequalmarket

    Oh yeah. I still do not understand all the strong words when someone has an opposing point of view. Even if my facts were wrong (They are not) I do not understand your harshness. Why are you so threatened by the potential for lower prices???

  92. whynot

    shortsequalmarket – nobody is threatened or threatend by you – espcially not homoken – your much lesser half – sorry, i couldn’t help myself! :) – that’s just in your mind. i actually really do not care that much either way. we’re taking our time to purchase, so it may not be even be for years! anyway, i just think that you and hoboken make things up, but say that it’s fact.

    for example, like the credit, you (and buddy boy) were wrong and can’t admit it. the increase to the credit was in 2010? no? well, there’s no way that the old limits helped much at all in hoboken for a 2/2 over 500K before it came into effect in 2010. therefore, don’t be so threatened to admit your mistake – it’s okay! 😉

    In regard to “You specifically asked what I thought about an unit with a private backyard that sold for $605, make up your mind.” Yes, I did – I asked for your personal opinion on the particular unit and cost in today’s market. I still haven’t gotten that answer! so, what’s your answer?

  93. homeboken

    whynot- when the credit was first put out, singles earning less than 75k (couples 150k) could earn the full credit.

    Higher earners could earn a partial credit.

    In any event, the credit no longer exists and demand will continue to decrease without it. That is a good thing, the credit was a very expensive (to all taxpayers) subsidy that likely did little except give $ away to people that would have purchased anyway.

    It is also very revelaing about your personality that you can’t post a comment without peppering it with some lame attempt at smack talk. Grow up.

  94. whynot

    homeboken comes back again with its own incorrect facts and smack talk. maybe it needs a little snack and nap time. someone can’t admit their wrong????

    for the last time, anyway you want to spin it, the tax credit (prior to its extension and inceased limits in 2010) did not help anyone in Hobokehn purchase a 2/2 over 500K. okay, okay, maybe one. so it had no or little effect on the numbers.

    lastly, my attempts are not lame! 😉 xoxoxo

  95. shortsequalmarket

    This blurb is from the Realtor website to level set the previous credit and income limits.

    Who Qualifies?

    First-time home buyers who purchase homes between January 1, 2009 and December 1, 2009.

    To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.

    Which Properties Are Eligible?

    The 2009 First-Time Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.

    How Much Will the Credit Be?

    The maximum allowable credit for home buyers is $8,000. Each home buyer’s tax credit is determined by two factors:

    The price of the home—the credit is equal to 10% of the purchase price of the home, up to $8,000.

    The buyer’s income—single buyers with incomes up to $75,000 and married couples with incomes up to $150,000—may receive the maximum tax credit.

    Now if you are trying to convince me that a couple earning $150K per year would not be interested in buying a $500K home and receiving an $8,000 tax credit you will fail.

    Why do you believe families earning $150K per year would not buy a $500K to $600K condo when mortgages are less than 5%? If families in this income range are not buying $500 to $600K homes who is?

  96. Lori Turoff

    The State of NJ has recently enacted a very similar credit.

  97. shortsequalmarket

    I see it passed the assembly but could not find it passed Senate or was signed by Christie. Can you post that link?

  98. UPennAlaskan

    One thing this great recession has hammered home to me is that everything/everyone is connected to each other. Contagion is the key word. Macro (US/World) and Regional (Jersey City/NYC) factors will be as meaningful as any local characteristic.

    The question I ask myself is…will the region have the necessary future employment opportunities and compensation for individuals to continue to support the current Real Estate levels?

    IMHO, the core Hoboken target market is geared towards 20s-40s somethings teachers/nurses/operations backoffice analysts making $30k-$100k/yr on the low end to IT managers/AVP Accounting/VP Risk $150k-$300k at the upper range. Law Firm Partners/Traders/Execs/SVP/MD making $500k/$1MM+ not so much.

    Thoughts?

  99. Craig

    Lori, the state of NJ has not yet enacted a tax credit. It passed in the Assembly with a 67-8-2 vote and was sent to the Senate, but the Senate has not yet voted on it. If it passes in the Senate it would then go to the Governor for his signature before it becomes law – and he is likely to veto it.

  100. shortsequalmarket

    So the real housewife of NJ, Teressa, bought a multi million dollar home while earning $79,000/year. Is it a stretch to think someone earning more, but less than $150K, would buy a condo up to $600K?

    whynot, I think you meant to say that there were few people using the $8,000 tax credit in conjunction with an FHA loan to move into a place with no money down. Do you want to reconsider?

  101. 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! 😉 your wrong – so just admit it!

    Now, is there any response to:

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

  102. 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.

  103. 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 😉

    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?

  104. 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?

  105. 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.

  106. whynot

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

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

  107. Lori

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

  108. 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.

  109. 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!

  110. whynot

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

    i’m going to barf – watch out!! 😉

  111. 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.

  112. 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?

  113. 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???????

  114. 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.

  115. 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.

  116. 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 :) :) :)

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

  117. homeboken

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

  118. whynot

    just an estimate (“being around”):

    a nice 600K place rents for around $3100

    what is your estimate? 😉

  119. 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.

  120. whynot

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

  121. 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.

  122. 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.

  123. 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.

  124. 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.

  125. whynot

    no homeboken – tell your article!

  126. 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)…

  127. 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.

  128. 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.

  129. 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.

  130. 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.

  131. 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.

  132. 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.

  133. 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.

  134. 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.

  135. 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.

  136. shortsequalmarket

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

  137. 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.

  138. 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.

  139. 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.

  140. 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.

  141. 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.

  142. 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!

  143. whynot

    sorry, it’s early, i meant:

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

    😉

  144. 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….

  145. 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

  146. 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.

  147. 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.

  148. 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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