2014 Mar 5th

The February Hoboken Condo Sales Results – Off to the Races!

In the decade I’ve been selling Hoboken condos and another 25 years of investing in real estate in the NYC area I’ve never seen a market like the one we are in now.  What is so fascinating to me is that I don’t believe this is a bubble.  This incredible upward spiral in pricing is purely a result of basic economics.  No supply and ever increasing demand for bigger units.  Even with new Hoboken condos coming onto the market every day, they sell even faster than they are listed so the inventory never builds up.

Hoboken is a great place to live.  The City continues to become more desirable and more people wish to stay here for longer and longer.  Improvements have been made under Mayor Zimmer and by the current administration which, now that the deadlock on the City Council is gone, has even more ability to work for our future than in the past. Life in Hoboken is likely to continue to improve as we intelligently deal with our flooding problems, come up with viable transportation solutions, just say no to overdevelopment and continue to improve the schools.

I see these “learn about the ‘burbs” seminars and shudder at the memory of days when I commuted for an hour each way from the ‘burbs to my job as an attorney in the city.  Let’s face it – it’s never really only half an hour and unless your driver is chauffeuring you in your limo, commuting sucks.

I’m seeing multiple offers on every single decent property.  I’m seeing accepted bids of 5% and more over asking price, often all cash.  I’m working with some understandably, very frustrated buyers.

This surge is not limited to Hoboken.  We were in New Orleans a few weeks ago and the same thing is happening in the desirable neighborhoods there.  We stopped to visit with a friend in Roanoke, Virginia and picked up a local paper with articles about a crazy market in Northern Virginia.  Of course, we all know it’s nuts in Manhattan and Brooklyn.  I think some of the demand is coming from young buyers who would have bought in Brooklyn but were priced out of the better areas.

Interest rates remain extremely low, the economy and stock market are doing well and there is no reason to think things are going to change much any time soon.  If you are selling, you are lucky.  If you are buying, you need a knowledgable and experienced agent to guide you through these turbulent waters.  Give me a call if you’d like my help.

Here is the February chart:

So what do all these numbers mean?  Here is my take away:

The market is moving as we speak and appraisals are an issue as appraisers use historical comps and prices are set going forward.  That means cash is king.  If a buyer is not able to come up with the funds to bridge the gap between a possible low appraisal (which means almost every nice property) and the agreed upon sales price, that buyer is not going to get the deal.

Have you been experiencing this competitiveness in the market?  Would love to hear your stories.


  1. Mike D

    Your last chart has the labels reversed

  2. Lori Turoff

    Fixed. Thanks, Mike D.

  3. Mike D

    Lori – any reason why Toll lists some of the 1100 Maxwell apartments with no direct NYC views, at $900-1000/sq. ft. range, other than “they can” given it is a brand new building?

    Similar units in 1025 and 1125 Maxwell are typically selling in the $650-800/sq. ft. range.

  4. Joe F

    How is this not a bubble market? Will 700 sf bedrooms be priced 20% higher next year? Will Hoboken be more expensive then Manhattan soon? Did they think it was a bubble market in 2006-2007?

  5. Gilby

    Exciting, but the pessimist in me also whispers in my ear. If “cash is king” is the name of the game, are we seeing investment buyers and not real occupants? Are these properties being purchased as rentals (always scary,) flippers? These are just questions, as I don’t know the answers and I don’t know much about the rental markets so I don’t know if the low inventory is, in part, due to owners choosing to rent out their properties instead of selling them (although with these price surges why would anyone?) Something about it seems like a bubble, the economy still seems fragile and unrealistic surges always feel like a bubble…although far be it from me to know what could burst such a bubble, maybe when the assessments kick in in 2015, although that may just cause all the older properties that will see tax increases added to the inventory and, once that happens we’ll see lots of internal construction as older properties are torn down. Interesting times in the Hoboken RE market if nothing else…

  6. Craig

    During the tax revaluation my place appraised for about $25k less than what an identical unit in my building sold for. So appraisals are definitely behind market prices right now. That’s a lot of cash to come up with in addition to the already 20% required. It’s going to be a problem for a lot of buyers – especially first time buyers. We’re definitely back to a sellers’ market.

    I can tell it must be a boom market because I’m getting annoying phone calls and letters from agents all the time asking me if I want to sell. The answer is no, I don’t want to sell. The Mrs. and I (both native NYers) love it here. We’re staying put until we outgrow our place. I wish they’d stop calling because when the time comes, Lori will likely be my listing agent (if she hasn’t moved to New Orleans by then).

  7. Lori

    Oh, believe me, these properties are being bought by owner occupiers. Mostly families with small kids our young couples planning a family. They are dual income earners and often work in finance or law where bonuses are the norm again.

  8. Lori

    Thanks, Craig. We will never leave the NYC area entirely – it’s too darn hot in NOLA during the summer so even if we move, I’ll still be delighted to work for you!

  9. Lori Turoff

    For those who speak of bubbles – this is an excellent article on the same: http://www.investopedia.com/articles/07/housing_bubble.asp I would love to spend some time and work up a mean reversion analysis for Hoboken condos. Maybe next week.

  10. Gilby

    That would be interesting to see. Hope you have time for it next week, Lori.

  11. Lindsay

    That is bananas! You sold our across the hall neighbors’ 2 bedroom just last summer for $599K, and those cost per sq ft numbers in your post imply something closer to $700K now. Bonkers! I wish we weren’t totally priced out of 3 bedrooms here in town 🙁

  12. Lori

    I listed a very ordinary 2br in a nice building, good location, for 535k and it expired unsold two years ago. Same unit now on the market for over 700k. That’s what is going on.

  13. Peter Kim

    You have to think of Hoboken as an extension of the NYC real estate market and not as a part of New Jersey. Hoboken seems overpriced compared to the rest of NJ but compared to Manhattan, Brooklyn and even Queens, it is a bargain. And since Hoboken is the only town in New Jersey with the same urban characteristics of Manhattan (walkable, bikeable, densely populated, lots of bars/restaurants/services/etc), there will be a premium for Hoboken compared to the rest of NJ.

    I’m also fed up with all the “learn about the burbs” seminars. They’re ridiculous. If you want to move to the suburbs, go ahead and enjoy your large house with the long commutes, much higher property taxes, utility bills, etc. 🙂 There are plenty of people moving in from NYC and from other countries who will gladly take your place.

    My wife, 2 kids and I moved from Queens after living there for 5 years because we were priced out! Yes, Hoboken is cheaper than Astoria and Long Island City now. But we’re very happy here and glad to encounter a lot of other former New Yorkers who’ve relocated here.

  14. Marc

    The same thing happening in Hoboken is taking place in decent suburbs ALL around in NJ. People should not be fooled to think that the increases are just because it is “Hoboken”. The increases are taking place in all nice places, including Hoboken, Tenafly, Short Hills, Westfield, NYC, Brooklyn, etc.

    For example, a 800K home in Westfield from 2012 is now going for over 1MM.

    At the end of the day, we will have to sell our condo in Hoboken (likely for a 200K profit) and parley the profits into a house. We now have two kids. We need space and a good school system!

  15. Marc

    By the way, I have been in hoboken for almost 20 years! I know a million people here and nobody loves Hoboken more than me.

    I am just saying that this is a happening everywhere.

  16. Gilby

    Got a call from a real estate agent asking me if I was in the market to sell. I responded that I know it is a good time to sell because the market is really on fire and the agent’s response was, ‘well, not really’ – I’m guessing the low inventory is making it not such a great market for some agents. I think it would be a good thing if some agents left the industry, so many part-timer/spare timers crowding the real estate sector in Hoboken giving the industry a bad rep.

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