2013 Jul 12th

The June Hoboken Condo Sales Results – Hoboken Condo Sales Reach All Time High

June  brings something I’ve never seen before.  In the 10 years I’ve been keeping track, I’ve never seen the discount of the actual sales price compared to the listing price be a negative number – until today.

Buyers who think they are going to bid low and get a ‘deal’ are sadly mistaken.  Look at average prices – we are almost at the $600,000 mark!  Well, the average price of a two bedroom is already well over that.

Even with interest rates creeping up (though still historically very low) and inventory picking up, prices are keeping apace.  Perhaps it is the good news in the stock market that is keeping people in the buying mood.  Every measure of the market tells the same story – Hoboken condos are selling and for higher prices than ever before.  What makes it so interesting to me is that lending is as tight as it ever was.  Folks, this is not a bubble.  This is pent up demand coming to the fore.

Average Hoboken Condo Sales Price

sq ft

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  1. Leslie

    L & H,

    Do have thoughts on what the Hoboken re-val will do to condo demand and prices? I imagine your thoughts will differ for (relatively) new construction vs. older/unrennovated?

    – Les

  2. Gilby

    If lending is tight, who is actually buying? Most people need to secure some kind of mortgage to purchase real estate. These couldn’t all be cash purchases, could they? I’m confused.

  3. Lori Turoff

    Who says lending is tight? Compared to what? Lending is not tight if you’ve got your 20% saved and, since 2008, lots of buyers have been stashing away the cash.

    What will the reval do? Who knows. It’s Hoboken.

  4. Gilby

    I thought you said lending is tight. At least that’s what the article says: “…What makes it so interesting to me is that lending is as tight as it ever was…”

  5. hoboken

    so is lending tight or not tight?

  6. Craig

    What she meant by “lending is tight” is that lending requirements are tight – meaning your credit history better be in good shape and you better have 20% to put down. If your financials are spotless, then mortgages are actually pretty easy to come by. It’s only hard if you don’t look good financially, in contrast to the old days when they were handing out mortgages without even any proof of income!

    A unit in my building just sold for $15k over asking – and it wasn’t a multiple offer situation. The offer came in strong the day after it was listed with the buyer having lost many bidding wars on other condos. They offered above asking to avoid haggling and get under contract before anyone else came in. I got my identical unit in 2010 for $125k less. Needless to say, I’m a happy camper that I correctly guessed the bottom and got in then.

    I don’t think the reval will negatively affect the newest buildings built in 2000 and later, as we’ve already been shouldering a disproportinate amount of the tax burden for years. I think those buildings will actually enjoy some tax relief as a result. It’s the older, unassessed for decades units that are gonna take the hit. Either way, it’s not like anyone’s taxes are gonna double or something. So I don’t expect it to make an impact on the market. Remember, the city’s total tax levy isn’t changing, meaning there will be no city-wide tax increase just because property values increased. All that’s being re-evaluated is what everyone’s share of the current levy should be. It’s simply a redistribution of liability.

    I agree with Lori that this is not a bubble. Hoboken will always be a booming market. It’s just 1 mile from Manhattan and because it’s only 1 sq. mile in area, there’s a limited and finite amount of places people can live here. Scarcity, proximity, and exclusivity creates high demand – and real estate in high demand will always be expensive.

  7. hoboken

    Is there something else that can be meant by “lending is tight” besides the “requirements are tight”?

    I’m a current hoboken owner, but I have to say you are really naive in saying Hoboken will always be a booming market. Did you forget about 2006/2007 already? I know quite a few people that took big losses back then.

  8. t

    a

  9. Gilby

    agree – everything ebbs and flows, Hoboken seems to be about as a market as it could possibly be right now but nothing will ALWAYS be a hot market. Always is a very long time. And 2007/2008 seemed to happen overnight. Reval? Only time will tell how it will impact the city. My guess everything that was here in 1988 (last reval) will take a pretty big hit slightly mitigated by any renovation work done over the years. Each subsequent year that a property came on line will take a slightly less hit, but a hit none the less up to about 2000 which will probably be flat. Conversely, from 2001 up to 2013 there will properties that may see a reduction with the biggest reduction being the newest properties. Of course, that reduction will immediately be eradicated by the huge increase in county taxes that everyone will get as Hoboken’s property values become a bigger share of the countywide property values. But with all that, I think I’m gonna agree with Lori, I really don’t have a clue what impact the reval will have and am taking a wait and see attitude about the whole thing.

  10. JC

    The sub 4% mortgage rates could be gone forever folks. While todays rates of mid 4% are still historically low the buyers were on the side lines thinking uncle ben would make sure their precious 3.5% mortgage rates would stay that way till end of 2014…..but the market has spoken and now typical fear vs greed sets in and folks want to but homes before rates creep to the 5’s. Pent up demand coming to the fore indeed. Its al over the country not just here.

  11. Craig

    The other thing that can be meant by the term “lending is tight” is that banks aren’t lending at all regardless of qualifications, thus requiring all cash deals. That was the situation in many markets right after the sub-prime mortgage crisis and is what Gilby was thinking when he asked what Lori meant.

    What I meant and what I should have said was that Hoboken would always return to being a hot market after any downturn. I can’t think of any tie in the past 20 years that Hoboken’s market was down and stayed down for long. It’ll always bounce back with brisk price increases, bidding wars, and the like happening sooner or later – much like Manhattan. You cannot say that about many markets – Las Vegas immediately comes to mind.

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