I don’t think Shorts ever argued the sky is currently falling. He/she has always simply held the position that real estate is well down from its peak and there are more steep losses in value to come in the future. Shorts could just as easily be right as he/she could be wrong about that – no one can predict the future. But in the present, the market has certainly flattened out for the time being. As a recent buyer, I am betting that it won’t get any worse. Shorts is betting that it will get worse. I risk losing my shirt if I can’t stay long-term and Shorts risks being priced out and being unable to buy anything if the market rebounds before he/she can get into a property. Only time will tell who gambled correctly.
Forget about Shorts, the bigger question is why haven’t you pulled the trigger if you’re so confident about the market whynot? 500+ properties on the market for the past 18 months and you still can’t find anything? I started seriously looking in October and was under contract for a condo by December. What’s taking you so long? Hoboken is only 1 sq. mile – you must have been shown every unit in town by now.
Hold up! Hold up! Read my posts, we’re gung ho that we hit the bottom and are now steady! We don’t believe the market is going to shoot up dramatically in the next 6 months or so. Therefore, we’re still looking for the place that we want to stay in for years and years AND at the right price.
We lost out on two Two TWO places that we really wanted because we didn’t want to get into bidding wars!!! Total Crazy and Sucky!!
All of that said, we do think prices for a desirable place will be slightly higher in a year and we’re not sure where rates will be.
We’re looking at new listings each week! Wish us luck! See you at the open houses!
@whynot – even in this market bidding wars can indeed happen on a desirable property that is well-priced. Plus, you’re shopping in the most competitive season when everyone is out looking. This is why I shopped for a home during the winter/holiday season. Little competition with other buyers during that season because few are out looking in that weather, and the best deals because anyone who has their home on the market during the holidays likely needs to get out fast.
@confused – you have two people relating their experiences of the competition they faced out there. So obviously there is some. Most of what’s for sale out there is crap, while other sellers are still stuck on 2006-2008 pricing. But the properly-priced, quality properties go fast and within 5% of asking price. The sweet spot are the 1000 sq. ft. or larger nicely finished and updated sub-$600k 2br 2br units. That’s where the competition among buyers lies.
As of 2000 there was 19915 units of housing in Hoboken (obviously more has been added since then – probably somewhere in the low 20k range now). The best quarter in the past decade showed a little less than 350 sales, or 1.75% of all units changing hands. Third quarter 2010 had about 275 sales, or about 1.4% of all units. That’s not that far off the best performance ever and quite a bounce back from the 100 units sold in 2nd quarter 2009. So exactly how many sales per quarter do you judge to be a decent market?
I agree w/ Craig. Bidding wars are most definately a possibility if the place is nice and well priced. Several friends of mine in Manhattan have told me even the rental market is turning. No more free months and realtor fees are back w/ a vengence on top of rent increases and now temporary walls are coming down in several apartments in Manhattan. Many people who could afford to split that JR 1 BD now are completely priced out of the market. I’d be curious how much overflow we get on our side of the river as people search for more affordable housing.
Anyone catch the headline in this morning’s WSJ? “Housing Market Stumbles”? Many people feel that prices have stabilized due to historically low mortgage rates. At some point those rates will start increasing and that will have a detrimental impact on housing prices. So, if you buy now to take advantage of low rates, you better be pretty sure that you are staying for a long time. You can’t take that low priced mortgage with you if you have to sell for whatever reason. Given the relatively short amount of time that most people in Hoboken stay in their units, this is an especially worrisome item for this market. For many reasons, I want to buy. But I’m holding off, saving more money, and will wait to see what happens as rates rise. Time will tell.
@confused – the experience of those 2 people are exactly 2 more pieces of empirical evidence of competition than you have supplied so far in support of your contrary opinion. What actual real-world experiences can you cite?
Specifics are the heart of my comment. Hoboken’s boom was based on anyone snapping up anything they could get their hands on at any price – even the crap. There is an 8 month supply of mostly crappy or still overpriced properites that are sitting because buyers are more discriminating now. No one is entering into bidding wars over crappy units. However, he quality, well-priced properties are still snapped up in short order. In some cases there are bidding wars for these properties and some sell above asking.
No one said the whole market was competitive, just the niche that is inclusive of the well-priced quality properties that whynot and Vivian were after. I was in the market for the same units as them – sub-$600k 2 br 2 br units, and I too lost out on several of them because they sold quick. If you don’t think there’s competition out there, start putting in some offers on top notch 2 br 2 br units with all the trimmings in Hoboken and get back to us with your experiences.
I have to back Craig’s claim as I too was in a few bidding wars for quality well-situated units before finally landing one. Oh and with parking.
Pat does have a point with having to stay a while. Like most, I don’t know what my future holds but I did quite a bit of research on renting out a unit in NJ, what it entails, and the current rental market in my area and of course my building. With such low rates I believe I can earn a profit right now and hopefully a bigger one in a year or two. Just something to think about when looking at places.
@morally right – I moved to Hoboken in ’99 and wasn’t keeping track back that far. I think a 10 year span gives us a pretty good picture.
@carl – anything sold on the MLS is in these numbers. Maxwell or other new construction units sold by the sales office and never on the MLS are not.
@whynot – maybe you lost out on 2 places because you have the wrong realtor.
@patk14 – I’ve been hearing about these rising rates for over a year now. Haven’t you read about the fear of deflation?
My experience has been that buyers are making offers that are unrealistically low because they all want a “deal” and sellers are still being unrealistic in judging what their property is worth. There is a gap and the deals are not happening because the two sides are still too far apart.
If the 2 sides are 2 far apart, in a buyer’s market (which they say we’re in) it’s up to the seller to blink (or the realtor to stop assuring the seller that s/he can get them more) I’m currently bidding – I’m the ONLY bidder on a higher end property – I’m coming in 5% below asking, which is 35K (started out about 7.5% below asking) and being turned down. Already prequalified w/50% down. It’s really unbelievable.
Gilbe – unfortunately, that’s the seller’s prerogative. they own the property. maybe they’re not desperate to sell. with a “desirable” property, the Seller is always in the driver’s seat unless the seller REALLY wants or needs to sell.
Confused – nobody really cares about your opinion. its just conversation and you seemed to be acting like a little b*tch. i wanted to know why?!?
Lastly, BELIEVE IT OR NOT, I don’t believe there are a ton of desirable properties in Hoboken unless you figure in the high end, very expensive maxwells.
@Gilbe – the reason why your seller won’t budge on your offer is because while the place your negotiating on is listed at $700k, the seller likely still owes either that amount or way more than that on it if they bought it during the boom. Hence, they don’t want to lose their shirt. This is a common situation with sellers who are underwater. Of course that’s not your problem. Review comps of similar units and look up the tax records on the property and see what the seller bought it for. You’ll be able to get an idea whether the lack of movement on price is based on greed or financial distress.
The price should be what it’s worth in this market regardless of the seller’s financial circumstances. Your realtor should have comps that can be sent to the seller’s agent that justify your offer. If what you’re offering is current fair market value and they won’t budge because they owe more than its current FMV, then move on. There’s plenty of inventory but not many buyers in your price range. You can easily get what you want without overpaying.
Guys – cut it out. If your comment is nothing but name-calling and hostility I’m going to delete it. I am happy to provide you with each other’s email address and you can take your fight elsewhere. Sorry.
@Lori – Whether or not there are agents who would submit offers without due dilligence on the pricing is not the issue. A well-educated consumer is a wise consumer – so one should do their own research regardless of who represents them. That said, one should check out the credentials and experience of anyone selected to represent them, as qualifications should never be assumed. For example, by virtue of my bar admission in NY state I am legally licensed to handle real estate sales in that state despite having no formal training in the profession. Just because I legally can represent someone in a real estate transaction, doesn’t mean I should.
Lori, no one knows when rates will rise, but I think it is safe to say that it is much more likely rates will be higher 5 years from now (or else we will have deflation and housing prices will plummet). I’ve heard proponents of buying say that each 1% reduction in mortgage rate is equivalent to a 10% reduction in your mortgage payment and a 10% reduction in what you are paying for the unit. The opposite is also true. As rates rise from say, 4.5%, to something like 6.5%, montly payments will have increased 20% without a downward price adjustment by the seller. I’d venture to suggest that this will put downward pressure on prices for just about anyone trying to sell. No one buying today expects to turn around and flip the unit within the next 5 years so it is likely that mortgage rates will play a major role when they attempt to sell.
Craig, you make an excellent point about people not wanting to sell for less than their mortgage. It is like the whole world revolves around them and that they insist on not taking a loss even though the market tells them that they must. I remember buying my 1st car and the seller telling me that he owed xxx dollars on the car loan and wouldn’t sell it for less. Why should I have cared what he owed? If he wants to sell it, and no will pay him what he owes, it will sit unsold. Same with condos in Hoboken.
I do think that prices will still fall. By how much I’m not sure. The only thing I would be worried about is if the sellers who are underwater say I’m not selling for a significant loss and I will just rent out my unit. In that case Rents will go down even further
Some people who are underwater will think to rent for a year or two, lose a little each month rather than taking a big hit, and hope the market recovers. It is a risky strategy in that prices could drop further and they would be better off taking their medicine now. But, then again, maybe the market will recover faster than anyone thinks it will and we’ll look back at 2010 as a wasted buying opportunity.
Thanks all for you’re input; I’m right in line w/comps on the place (realtor did provide,) am told that they reallllllly want to sell, but apparently they reallllly want to get their asking price. Keeping my fingers crossed that no other buyer crops up!
There are usually two agents in a transaction – one represents the seller (the listing agent) and the other works with the buyer (and is called a transaction broker). Sometimes a buyer buys directly from the listing agent and there is only 1 agent involved. When that happens, it brings up all sorts of issues which you can read about in earlier posts and comments.
Thought you all might find this article interesting. We’ve been looking at properties for over a year but have yet to purchase anything as most of the properties we are/have been interested in have been overvalued…a possible solution?
Wantingtobuy – you sound frustrated with your inability to buy. Question, any of the places that you liked, have they sold? If yes, then have you ever considered that maybe the properties that you like are not overvalued but you price is wrong? The mkt it the mkt. You might not like the mkt but why should i cut the price just cause you dont like the mkt.
It could just a coincidence but is this not the 3th/4th person on this blog that has complained about the inability to buy a place as the seller is not reducing the price. It could just be a blip but stark contrast to a few month ago.
“The vast majority of homeowners remain reluctant to sell their primary residence at a loss, perhaps irrationally so. In a study of seller behavior in condominium transactions in downtown Boston from 1990 to 1997, economists David Genesove of Hebrew University in Jerusalem and Prof. Mayer of Columbia showed that sellers were so “averse to nominal losses” that it affected their behavior. Those who were selling their homes in down markets and faced the possibility of nominal losses kept their homes on the market for much longer than other sellers, in some cases to their detriment.
“Loss aversion is a very, very strong force,” Prof. Mayer says. “People don’t like to sell their homes for less than they paid for it.”
But, he adds: “Why should it matter? If you sell a home for less than you pay for it, you would buy for less, too.”
L&S, thanks for your comment. 3 of the 4 that we were closest on are still on the market (2 of them for more than a year). The 4th one sold 7 months after our original offer for ~10k more than our offer price (on a 700k+ property). With taxes, maintenance, and mortgage interest on the unit being high, the seller actually lost more than 10k on the opportunity cost of not selling to me 7 months earlier. I do applaud their ability to get more than I offered, but at what cost?
I don’t wan to get into human psychology, but I will provide one hypothetical example of why it CLEARLY matters in practical terms:
You buy a house for $1M, and put 20% down ($200K). 2 years later your home is worth only $600K (40% down). Say you wanted to sell your house at the market price and buy a different one with the same market value of $600K. Well you sell your first house, and you owe bank another $200K (in addition to having lost the initial $200K you put down). Then you go to buy another house and the banks says – fine you have to put another 20% down (20% on 600K is 120K).
So just moving to a different house becomes a negative 320K cashflow proposition in addition to having realized an additional $200K of equity wipe-out. I’m pretty confident that a very small percentage of people who own 600K homes who put down $200K down just a few years later actually have an additional $320K in cash. Even if they did, they wouldn’t be willing to part with it through a process i just described.
I can give you a thousand hypothetical examples, but hypothetical examples are not facts. I have only 1 simple question. If all comparables and economic indicators show that a condo is worth a certain price, than what purpose is served by listing your condo at a significantly higher price and letting it sit on the market for such a long period of time? Unless you are really motivated to sell, why list the property at all?
WantingToBuy – Some people are not in a rush to sell. If they get “their” price, great. If not, they live there and enjoy Hoboken. They own the asset that you want, so they’re are in the driver’s seat. Why do people find that so objectionable or simply don’t understand the concept?
On a side note, I personally think that Hoboken in generally undervalued right now. Open your eyes and look around at what’s happening in this city. Stores opening and thriving, new restaurants and bars, the W, people staying, new government, etc. Amazing!!! Even snobby NYC people I know are now thinking about Hoboken!!!
If you’re going to buy and stay, now is THE time. Especially with 4.25% rates! It’s like free money!
If you sit it out and stay, like shortsequal market, you’ll get punished in the next year or two with higher prices AND rates.
What is the point of your comments ultimately? You are advising people to cut prices. Honestly, by posting such stuff on a blog that few sellers actually read it does come off as frustrated.
Maybe I’m missing your overall point. I don’t think many people will disagree with you that many places are overpriced, which is why they aren’t selling. But there are multiple reasons why someone might list their property but not be “really motivated” to sell it. And some people – many people – feel this is the bottom, and so won’t take a level they feel to be there. Maybe they’re wrong, but this isn’t being irrational necessarily. They just might have a different market view than you.
Laki – your examples do not deal with the Hoboken mkt. Show me a place that is down 40% in Hoboken. It could be true for FL, Vegas, California but not Hoboken.
TS – I disagree with your notion that places are not selling because they are overpriced. Places are not selling because buyers are still scared and hesitant about the economy/housing.
Maybe I completely off base but in a hypothetical world if all buyers believe that the economy is going to be robust and S&P is going to 1,400 and housing has a max 5%downside..then buyers step in big at these le
TS – if you want to bet there are places in Sky Club down 40% I’ll take that bet. Sky Club isn’t down 40% – not even close. That would mean a place that sold for $600k at the height of the market now goes for $360k.
Sky Club is one of the worst performing newer buildings in Hoboken and it has seen about a 25% drop in value at worst. Even the crappiest gut jobs in town haven’t lost 40% in value. Proximity to NYC has helped prop up Hoboken’s value relative to other parts of the country. This is not Las Vegas.
Some people aren’t buying because they can’t get a mortgage due to their own financial situation.
Other people want to buy but can’t – they make an offer, it’s accepted, and then the bank starts looking into the CONDO ASSOCIATION financials and won’t lend. People this is happening more and more. If you don’t have your house in order you will never sell. Not just your own property but your association. You need adequate flood insurance, you need adequately funded reserves. You need books and records. There are issues when there are too many tenants as opposed to owner occupied units. There are issues when one owner owns too many units. There are issues when there is commercial space in the building.
Essentially, Fannie & Freddie (by way of the Fed. gov’t.) is doing all the lending today as they are the only ones still securitizing mortgages. If your building doesn’t meet the Fannie & Freddie guidelines, you’re buyer’s not going to get a mortgage.
Furthermore, buyers and sellers are still unrealistic. Sellers often fail to see the faults with there property. They avoid selling at a loss. They think time is on their side and they tell me “we’re not in a rush”, which is a huge mistake, btw. The buyers all think they are going to get a bargain and are low balling properties that are priced properly based on recent similar sales. Until these problems start to fade, the inventory won’t go away.
Lori..I know this is off topic but can you plz tell me what the definition of “adequate reserves” is? I live in a brownstone that went condo (4 units in building) in the last 2 years. Since we are a new condo association we may not have the “adequate reserves” you mention just because we are young. thanks
I wasn’t claiming that on average any building is down 40%, but that you could probably find units here and there down that %. My best first guess was SkyClub – maybe there is, maybe there isn’t one in that building. I looked for a little and only found down 25%.
But looking just quickly at Hudson Tea, I found this:
1500 Hudson St, #6G $1185140 04/20/08
1500 Hudson St, #1G $689995 05/07/10
Yes, the floor difference is going to make an impact on pricing here, but still – 42% difference.
Here’s something a little more comparable in the same building – a desirable building, keep in mind:
#4F $1404888 03/01/06
#3F $999000 07/15/08
And I can pull up many more in the F line with unfavorable outcomes, to say the least.
Or try the same building again:
#10J $1558245 09/22/08
#8J $1107515 12/21/06
These last two examples were only about 30% down – but in a very desirable building, possibly among the 2 or 3 most desirable. So while I agree this isn’t Las Vegas, at the same time don’t think there haven’t been some isolated Las Vegas-like losses in Hoboken.
TS – You are comparing apples to oranges. You proceed on the incorrect assumption that every unit of similar size in a building is identical in features and finish. This is not always the case. In your example of 1500 Hudson, unit 6G had an assessed value of $11k more than 1G in 2007 – a substantial difference in real world dollar value if you understand the difference between city assessments and real world values. Currently 6G has an assessed value of $25k more than 1G. 6G would be priced substanially higher than 1G if it were on the market today. It was worth more than 1G in 2007, and it would be worth more today. So comparing 2 different units with different values does not establish a 30% market loss.
Whynot – my lender (Wells Fargo) requested my condo’s financials and refused to fund my loan until the condo’s reserve was sufficiently funded. Upon realizing that no one in the building could sell as things were, the HOA issued a special assessment to all units to immediately fund the reserves up to adequate levels. Based on my actual experience, I’d say your attorney friend doesn’t do many condo closings. Lori has it right.
This brings us to JC’s question. Each lender may vary, but in my case adequate reserves was defined as 10% of the condo’s annual operating budget.
Stan – A couple of fools did spend $900k for 1100 Sq. Ft. units at Constitution in ’05, but most topped out in the high $700 – $800k range at the height of the market. Right now there are 3 units that size for sale in the low 700s and one for $650k. These aren’t the same units you’ve seen for mid $500s. The question you have to ask yourself is how did the ones you saw for mid 500s compare to the ones currently listed for $100 – 200k more?
It seems more and more like people not getting credit is the ‘norm’ and what we experienced over the last 15 years or so was not the norm. If that’s the case then I would think we’re certainly going lower. Take away credit that most people could get and the pricing dynamics change drastically.
40% down number was a random number i used to construct an example with round numbers to rebuff an argument and to prove that in certain cases it does matter whether one is about to realize a loss when selling a property. I didn’t mean to imply this was the case for Hoboken. But even if prices are down 20-25% the argument still holds in Hoboken for everyone who put down 10% when buying a house. And plenty of people did that during the boom years…
morally_right, I do a lot of work on this and i certainly agree with you. I would advise everyone to try to get their hands on the following charts (nation wide) for the past 50-60 years (however long the data series goes). They’re out there look for them. Half can be found on the bloomberg terminal and the other can be found on various US government statistics websites or research articles published by sell/buy side analysts over the years.
1. Number of houses/apts/units in US
2. Number of people in US
3. Number of houses with a mortgage
4. Number of delinquent mortgages
5. Number of newly constructed houses/apts/units
6. Number of vacant houses/apts/units
7. Existing home sales rate
8. New home sales rate
9. Median price to median income ratio
10.Median price to inflation ratio
11.Median price to rent ratio
12.Median household debt to wealth ratio
13.Median household debt to disposable income ratio
Only when one looks at the longer data series and puts things in perspective and looks at the big picture as illustrated by these charts it becomes apparently clear that last 15 years have been anything but normal. All the indicators are COMPLETELY out of whack and show a multi decade bubble that has especially accelerated since the late 1990s. The imbalances are obvious. We’re looking at a record number of vacant homes (vacation homes, empty rentals, unsold homes on a market, etc.) a record number of mortgage delinquencies and a relatively low demand for new purchases. For many decades the rate of new construction has outpaced the rate of population growth amid the pricing bubble. So now we’re at the inflection point stuck with too many houses at a time when households are the most stretched they’ve ever been (debt/income and debt/wealth ratios) while the houses are still overvalued based on all fundamental indicators (price to income/inflation/rent ratios).
In all likelihood we’re entering a new paradigm where all the trends of the past several decades are likely to reverse themselves until we reach a new equilibrium. This can last for years if not decades.
So everyone who thinks in terms of things getting back to “normal”, and defines “normal” as late 1990s or early 2000s is failing to see the big picture.
laki – turn the computer off, put your pants on, put down the cheetos, and get into the real world. if your charts were so accurate, you would be very rich at this point. But, you’re not. you can’t predict the future, but you can actually try and purchase or sell a home and see what’s really happening out there.
disclaimer: “past results do not guarantee future performance”
TS – There’s no doubt that Constitution has been hit hard and it deserves to be because it was vastly overpriced to begin with. My position is simply that you can’t compare models with similar floorplans on paper. One would need to get inside to see what changes have been made that may have changed the value from one unit compared to another. For example, the upgrades I have made to my bathrooms make my unit more valuable than the other identical units in my building – but that won’t be reflected in the tax records. Thus if my neighbor sells for less than me a few months apart, it’s because his unit is worth less and is not necessarily an indicator of market direction.
It’s good to see 2 BR units in Constitution coming into the $500s. With those parquet floors, so-so kitchens, and wall a/c units, that’s what they’re worth – waterfront location or not. Applied’s condos are no different in quality from its rentals.
If you do renovations in Hoboken you need a building permit and if you pull permits your taxes will be reassessed so changes ARE reflected in the tax records (unless you do it illegally or if the changes are merely cosmetic – i.e., no new sink or fixtures, no plumbing, no electric).
The city isn’t really clear on what you need permits for. A look at the city website reveals no info whatsoever. I can see structural, electrical, or plumbing changes requiring permits. I may be wrong, but I can’t imagine replacing a vanity and faucet requires a building permit unless you’re changing its original location and re-plumbing. That’s cosmetic, not structural – it’s like replacing furniture. Installing a new hot water heater is more involved and you don’t need permits for those.
Quite frankly, that’s hardly a response – more like a way out.
The tax records indicate similar assessed values, so that is the best information we have to go on.
Additionally, one of the apartments I listed in the Constitution **is the exact same unit for resale.**
Also, I didn’t just show the Constitution but also the Hudson Tea had some big declines.
Maybe it’s just time to admit that you were wrong, rather than stretch this out.
Whynot sounds very much like those stock brokers from the late 90’s telling everyone to ignore historical P/E ratios, that a new paradigm for valuing equities makes historical comparisons irrelevant, so buy/buy/buy growth stocks. There were widespread expectations of achieving 20% returns indefinitely in the markets by the end of the 90’s. What happened, no gains for the next decade plus with some significant and painful volatility.
You need long-term income to pay your mortgage. The lower the amount that you can afford to put down, the higher your monthly nut. Ignore historical mortgage/income ratios at your own risk. By the way, incomes in Hoboken have risen substantially over the last decade supporting SOME of the rise in prices.
Realtor friends of mine in Manhattan are telling me things are not looking good there. I don’t think prices are collapsing but inventory apparently is going to become a big issue in the next couple of years. If, and it’s a BIG IF, Manhattan prices come down significantly, that is of course going to drive pricing in surrounding areas.
Craig – I just called City Hall – the construction office (201 420 2066) and asked:
1. Do you need a building permit to change a hot water heater? Answer: YES.
2. Do you need a permit to change a faucet in a sink vanity if you don’t need to move it? Answer: Ask Joe Bahun, the plumbing inspector, who is in the office from 9 to 11am.
Sure you may think you don’t need it because it’s not so complicated but, if you are wrong and if you advise people incorrectly beware. The city fined my neighbor $5,000 for doing work without a permit. All you need is an inspector to see the old faucet in the trash, or a nosy neighbor to snitch on you and you have all sorts of problems with City Hall. Hoboken is VERY strict about requiring building permits.
TS – I never argued that those buildings haven’t suffered steep declines in value. You are quite correct in that assessment. My position is that you can’t always compare units in terms of pricing sight-unseen. I’m not sure how that viewpoint is wrong.
Lori – It would be nice if the city made it clear exactly for what types of work permits are needed. If you need a permit to replace a hot water heater, I’d venture to guess most property owners that have changed one are in violation. I’ve personally had 2 replaced by landlords when I was a tenant in my 14 years as a Hoboken resident without a permit in sight. With the months I hear it can take to get a permit, can I get a show of hands of who will go without hot water that long while they wait? I’m curious as to what work your neighbor did without a permit that got them a $5000 fine. If it was for something like replacing a leaky faucet without a building permit, I’d challenge that in a state level court. Sounds arbitrary and capricious to me.
Now we all know Hoboken City Hall never acts in an arbitrary and capricious manner! It would be nice if it was clear but good luck trying to get a hold of anything in writing that clarifies the requirements. Before I would do any work at all – no matter how minor, I would go to the construction office, tell them exactly what I’m planning to do and get them to sign off on it at least verbally, and know with whom you spoke!
Some people have a lot of time on their hands to go to a construction office when changing a faucet and then paying Hoboken more money that the City Council will just waste. How are the taxes in Hoboken compared to surrounding areas?
Who would disagree that you can’t always compare units in terms of pricing sight-unseen?? This wasn’t even the issue. The original issue was whether some properties in Hoboken have seen some very, very steep declines – you claimed that one of the worst performing buildings, the SkyClub, has still only seen a 25% drop at worst. I picked out two more desirable buildings (at least Hudson Tea is) to show otherwise, by pulling up equally sharp drops – without much effort, I might add.
And yes, you can’t always compare units sight-unseen but sometimes you can – and sometimes, as a matter of practicality, you have to in order to arrive at a market view.
The best thing to go by is the tax records/assessed values, as you actually pointed out. If someone did enough work to their condo to make those numbers inaccurate, then you better believe that they had to get permits. Changing a few vanities isn’t going to account for a 250k or whatever price drop.
TS – I’m sure you can find some outlying examples of properties that have suffered more than 25% losses (if taken at face value the later examples you cite are down 29%). But they are the exceptions that prove the rule: on average Hoboken is down about 20-25%. Certainly nowhere near the 40% number that was bandied about.
Properties like 1500 Hudson and 2 Constitution will never rebound to their full former glory. When they first came online in 1999-2000 they were the cream of the crop. But their parquet flooring, cheap kitchens, and wall a/c units are now inadequate compared to newer high-end units that trump their amenities/finishes yet can be had at the same price. Speaking of 1500 Hudson, Peyton Manning gut renovated his 3000 sq. ft. unit (he bought two units and combined them), and brought his place up to snuff with central a/c and high end everything. His place is now what the whole building should have been. Click on the link below and click the slide show to see his place:
If you re-read my comments, I didn’t say it was the norm, just the opposite. I totally agree with you. I was merely reacting to your claim that no property is down 40%: “Even the crappiest gut jobs in town haven’t lost 40% in value.”
105-111 GRAND ST #206 $1475000 on 02/09/07
105-111 GRAND ST #206 $950000 on 02/24/10
TS – Fair enough. I think we’re pretty much on the same page and are just debating minutiae. However, I still stand behind my statement that nothing in Hoboken has endured a 40% loss. You could argue 36% percent is close enough in your latest example, but the $65k difference in that 4% gap is not insignificant.
Some units had a greater rise than others (like #206), and are now suffering a greater fall. The whole market is at about 2004 prices (some inventory had to be reduced more than others to get there), which would put unit 206’s 2010 sale price of $950k in line with 2004 pricing given that it sold for $850k in 2002.
I’m not sure what the ultimate point was of your last comment, but I don’t agree with your claim. In 2004 unit #205 in the same building sold for over 1MM, and its assessed value is considerably less than #206’s. Furthermore, Unit #206 sold for 1.225MM in January of 2005, so I don’t think its value 1-12 months prior was 275k less.
It would seem to me that on this particular unit, the price reverted to pre-2004. I don’t think it’s correct to assume that because in general the market is at 2004 prices that every property will be there. Going back to my original point, there are cases in Hoboken where you see Las Vegas-like losses and price reversions.