2013 Jan 8th

The December Hoboken Condo Sales Results

Looking Back at the Year in Hoboken Real Estate

The end of the year.  What better time to look back and try to make sense of what happened.  Perhaps use this as an opportunity to take some educated guesses about what’s ahead.

I look at the numbers below and see some very good things.  Stability in our Hoboken housing market, for one.  Prices are inching upwards.  Not skyrocketing, but inching.  The 3 and 6 month rolling averages show that.  The quarterly figures show that.  The average and median numbers show that.  It’s a good thing.

I also see that inventory is still at an all-time low.  People are staying put.  My insight, having spent 10 years in the trenches, is that there is no quick profit to be made, no ability to leverage of the sale of a smaller property to buy a bigger one, and no more easy money.  If you want to buy, you need to have saved.  If you want to trade up to something with ‘room to grow’, you need to have saved.  People who grew up living on credit are learning that they have to change the way they think and spend.  In my opinion, that’s also a good thing.

Sellers are either learning to price their properties correctly or, the dearth of inventory is allowing them to get what they ask.  Properties sell very, very close to list price nowadays.  There are really no more ‘low-ball’ opportunities.  If you are not willing to pay what they are asking, someone else is.

I’ll be posting more charts and graphs over the next week or two.  But here’s the bottom line – Hoboken is a great place to live, as long as the PATH is running.  (I was truly ready to move back to Manhattan when we were left with just the bus.)  There will always be a demand for housing in a vibrant, young community in proximity to New York.  Maybe the fact that people will be forced to stay here longer will prompt them to become more involved in their community.  That’s yet another good thing.

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  1. question?

    If you bought after the crash, you could have made some quick profit selling over the summer. That said, that was before the flood, which has deflated prices.

    People want out, but cannot. I am hearing this all over town.

    If you are going to buy, now is the time to low ball and just wait out the sinking prices.

  2. Dane

    I actually haven’t seen any evidence of much impact due to the flood…where are you getting this information? At the end of the day, everyone already knew Hoboken floods and the fundamentals that make this town great (access to transportation, walkability, restaurants/night life, etc.)haven’t changed at all. So, what evidence is there to anything you just posted?

  3. question?

    I am very well connected to the pulse of the people in town, including all of the main brokers in town. Almost nothing is selling in the areas that flooded. In the other areas, prices that were quickly going up, leveled off or started going down.

    Sorry, I do not have data, but everything has a lag – you will start to see it in the lack of sales or the decreased sale prices.

    Also, the major real estate tax increase coming because of the storm is on every buyer’s mind. It will be a huge increase, which does not help prices.

    Prices were soring, but that was pre-storm. Hoboken is now dead. Now is the time to low ball or sit on the sidelines. I use to say buy buy buy. Trust me!

    Buyer beware.

  4. TS

    Maybe you’re right and there is a lag, but you saw you don’t have data while saying that such data exists – i.e., decreasing prices. So show us your phantom data or just admit you’re going based purely on “market pulse,” which isn’t to discredit it as a preliminary source of opinion.

    Also, even if demand has come off, low balling in a market that has supply at the lowest I can remember in a decade (feel free to correct me as I’m going based on memory) isn’t exactly sound advice.

  5. Kevin

    I bought a condo 750sq ft in Sept 2009 for 272k. My house was appraised this month for 305k. I would like to sell later this year for 330k. I need a new kitchen and appliances.

    I would also be interested in buying distressed homes on the first floor close to the path.

  6. JC

    We just had a 100 year disaster in this town. Real estate sales SHOULD slow down (especially in flood areas), and prices probably will negatively be affected. It only makes sense. Those that were flooded and damaged will repair, from there they may sell. That takes time, and many are still repairing both their propeties and their lives. Real estate lags, we need time to pass. Question is probably correct…then in 6 months or longer things will get back to what they were again. Not to mention the banks are probably nervous and re-appraising anything that hasnt closed yet.

  7. Gilby

    What worries me is that there IS so little inventory available and yet the prices aren’t going up. They seem to be holding relatively stable, but with so little inventory, you’d think buyers would be bidding up and fighting over them and we’d see much more of an uptick in prices. Perhaps I’ll have a clearer picture in March/April as there is more distance from both Sandy & the holiday season.

  8. Mike

    Also very interested in when enough data should accumulate to measure the impact of Sandy.

    I’m quite confident Hoboken is not dead, as one “well connected” person with no specific info to share says.

    In fact, the apartment immediately next to mine closed last month for 15% more than my purchase price 1 year ago – similar size, amenities, etc.

    Sure, the costs of cleanup, assessments, taxes etc won’t help property values but historical examples suggest we can expect one step back followed by a market recovery. Look at confo prices in lower manhattan now vs. post 9/11. Or what about the ups and downs of coastal cities like Miami that have been hit hard like this before?

  9. Lori Turoff

    Unit went on the market yesterday in a MetroHomes building in the part of town that floods. I was surprised how much they were asking for a 2br. Offer and acceptance in one day.

    I know, it’s only one example. But anyone who tells you things aren’t selling does not know Hoboken real estate.

    Anyone who states their credentials for their data and analysis as “I am very well connected to the pulse of the people in town, including all of the main brokers in town” I suspect has some sort of agenda or is just upset that they didn’t get in two years ago when the getting was good.

    You want facts and data? Stay tuned. Hoboken is back better than ever.

  10. Josh

    Place downstairs from me just sold before it hit MLS. We flooded (although only about a foot into the lobby). It was with one of the main brokers in town.

    “In God we trust, all others bring data”

  11. JC

    These intrest rates are gifts! Anybody who has been following rates more than the last few years know it. When rates go up, we could see home downward price pressure, but not many see rates extremely higher…maybe only a few points in next few years, so pressure should be minimized. This rental market is also extremely strong.

  12. question?

    Guys. Stop. With the lag data, you will see that prices are not going up. They were going crazy over the Summer. Crazy. The storm stop that momentum in its tracks. Any broker in town can certify to that without any data.

    Oh yeah, the big tax increase that is coming and the aging population (with kids) looking for good schools are not going to help things. We have the worst schools around. What a joke.

    I have no horse in this race. I have made a lot of money in Hoboken real estate. I am just spreading what is really happening.

  13. bz

    I see the concerns in these posts:

    • Taxes rising…haven’t they been rising over the past decade or longer, for all kinds of reasons (property value increase, city-wide improvement, inflation, etc)? That only detains certain buyers, not all, from purchasing a home in Hoboken. I don’t think the taxes problem will be bad to a point that it makes Hoboken’s real estate a disaster. NJ has been consistently one of the highest taxed states in the nation, yet, we have been consistently one of the most populated states in the nation. Did taxes scary people away?
    • Special assessment…yes, the rebuilt must be done and it’s a short-term event. A smart buyer should know that It will only make Hoboken better as everything replaced will be brand-new. My own example: my 15-year old boiler and hot water heater were replaced by a tankless 98% efficient water heater serving both hot water heater and baseboard heating. True, that I spent thousands ( some will be paid by the flood insurance), but it has increased my property value and will save tons of money on my utility bill in a long run.
    • Extremely low inventory with only modest price appreciation…it’s a good thing folks. To me the market is more cautious than over heated, from both buyer and seller sides. We are still in a very slow recover after all. Real estate is a long-term thing, so you have to look at it in a grander scheme, no matter if you are an investor and a home owner with no investment idea in mind. Slow and steady win.
    • Families are leaving for space and school concerns…yes, some family do, but it has been like this for longer than your stay in Hoboken. People have their personal preference when it comes to choosing a place to settle, and it won’t change no matter what. So relax. Look at the positive side, If Hoboken is less populated, there will be a lot of problem being solved automatically, such as parking, traffic, school size, limited public space and services, etc. I don’t see any shortage of existing residents and new comers that are willing to stay though.

    The recent downturn and Sandy are historical. I imagined much worse. But I think Hoboken has been doing well given the greater economic environment.

  14. Mike

    There is a lot of wiggle room between “prices not going up” and things being “dead”.

    What “aging population”? The # of young people in their 20s far exceeds the # in their 30s and early 40s (ie the ones with kids who are moving out of town). Just look at US birthrates by year. If anything, that is a favorable trend.

    Tax increase will be a kick in the nuts. Or maybe not if costs can be amortized over the useful life of the things being repaired or replaced. Of course, if we get a Sandy every year that will be worse, but I don’t think that assumption is priced into our real estate market just because it happened once

  15. Gilby

    Some very good and helpful comments. I think there is a “Sandy factor” concern, but I don’t know how big a concern. (For me it’s huge, I would absolutely avoid a basement or first floor unit west of Bloomfield, I did some walking around in Sandy’s aftermath – I don’t need any of that in my life) and the “Sandy Factor” has happened more than once – Twice in as many years….anyone remember Irene? Same flooding pattern.

    I also think that interest rates play a huge part in this, but for years now there has been speculation that they are going up and they haven’t. Even small increases will effect prices and things. 5% & 6% interests which, at one time were considered rates that were worth jumping on might now put downward pressure on prices.

    Investors do keep the prices stable, but I hope we start to see more non-investors with an actual commitment to living in Hoboken enter the market. I’m always suspicious of units that ‘sell in one day and above asking.” Is that just creating a artificial demand? Housing in Hoboken is still high priced, and non-investors often cannot/do not want to act with such immediacy. Even with the low inventory – the more often I see ‘sold in 1 day at or above asking’ the less community stability is being infused into the market which I don’t see as a good thing for the housing market in the long run.

    The reval will probably create a huge influx of properties onto the market. I’m told that the last time, oh so long ago, there was a tidal wave of product offerings on the market followed by a short term crash in pricing (followed by a lot of investment purchases.) But, that is probably, at least, a year away, and we all tend to look at market trends in much shorter terms these days.

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