2014 Jun 7th

The May Hoboken Condo Sales Results

Sales exploded in May.  There is just no other word for it.  Here are a few of the highlights:

Here are the May numbers:

There is not a single sign that this rise in activity and prices is going to end any time soon.  I hear buyers tell me “I’m not in a rush so I’m just going to wait for the market to come back down”.  I laugh to myself that I will likely be retired by the time that happens.

Every buyer says to me “I don’t want to be involved in a bidding war”.  I say, then you’re not going to buy a premier property in Hoboken.  You need an exceptionally qualified agent to navigate these waters; to show you value; explain the strategies; provide guidance on how to make the strongest offer; win the bid and not overpay.  You need an agent who will work with you as a true buyer’s agent – not a transaction broker (fancy name for salesperson).  Try to find an agent with more than a decade of experience in Hoboken condo sales alone and negotiating skills second to none.  Wait, that would be me.  If you’d like a private consultation, please email me at [email protected]

Enjoy the weekend!

Lori

 

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  1. Dane

    Lori, I have a question per your comment on sales, on average, being above listing price…do you know how price discounts are taken into account? Is it the original listing price or the reduce/revised listing price? I’ve seen quite a few examples where it looks like sellers put out a high price, have to reduce, then sell at the reduced price…it seems like in today’s market that is going to greatly impact the average stats so I’m curious how that’s taken into account?

    Also, and I do mean this with the greatest of respect – you really shouldn’t make fun or laugh at buyers that are waiting for/think the prices will come down soon. To be honest, in today’s crazy economy, they have just as much as a legitimate rationale for prices coming down as you do for prices continuing to go up. If there is anything these last 5-6 years have taught us is that there really isn’t anyone that knows for sure what is going to happen with the economy. Even the “wisest” of investors have been wrong about the stock market, real estate, etc. so you should really be more open minded an accepting that there is a strong chance your original belief about the Hoboken real estate market is wrong. If anything, its usually a good bet to expect prices to start going down soon after people say “there is no way you can lose money”…that’s usually a good sign of a bubble. However, then again, I may be completely wrong on that as well. At the end of the day, we all make guesses on what’s going to happen – and EVERYONE is right some times and wrong sometimes. Sorry, but comments like that are just a pet peeve of mine, whether they come from a real estate expert, a financial advisor, etc. Why does the S&P 500 outperform most managed funds? Why are huge banks with much more resources in trouble with mortgages?

  2. Lori Turoff

    List price does include price reductions but, in this market, there are hardly any price reductions. If you were to follow the Weekly Wednesday Wrap Up, we track every price change, every week.

    We all have opinions about the market. Some of us have more experience and better insight than others. If you don’t agree with me, that’s fine. But I stand by mine.

  3. Craig

    As usual, the averaged numbers are skewed by such atypically priced outliers like Maxwell Place and the W. As much as I’d love to believe I could sell my 1300 sq. ft. 2 bed 2 bath for over $700k, that just isn’t so. I live in a newer elevator building with all the desirable fixins’. And in real-world transaction prices, no one in my building is going to get $700k for their place. The last sale less than a year ago was a little over $600k – and the market didn’t jump 15% since then.

  4. Lori Turoff

    Craig, the last sales in your building were last year for $632.5k in 18 days and over asking for $625k in 11 days. Prices for 2 bedrooms are up 10% since last May (see chart above). Your building is not steel and concrete and it is not an “open floor plan” in that the kitchen is tucked off to the side and doesn’t face the living room, and the units on the front face an ugly parking lot, all of which may affect price.

  5. Eric

    Look at the median instead of the average, the median should not be pulled up by a few outliers. This month the median sale of a 2 bed is 694k, which is just crazy. It usually lags much more than that from the average.

    Lori’s monthly stats are great and draw nice trends. But I prefer to look at the Wednesday Wrap Up closely to see comparable units in my neighborhood. In the past few weeks I’ve seen 1050 sq ft 2 bd 2 ba basic split layouts sell for around 650k or more. I’ve seen 2 postings of open houses just this weekend for the same “basic” units asking 689k and 699k. It’s hard for me to believe as well, but I’m not planning to sell so I’m just enjoying the feeling.

  6. Dane

    Lori, I do follow the wrap ups just about every week (which are definitely helpful and I do appreciate, so please don’t take anythink I say as disrespectful), but I think you are underestimating the number of reductions. For this week alone, there were 6 reductions (on 5 units) out of a combined 30 sales and DABOs. While that is not “huge” its also definitely not inconsequential as well (20%!). I took a quick look at last week’s recap and there were 5 across sales and DABO’s. I’m definitely not the expert, but it does seem like you’ll get a fair amount of price reductions because some sellers will “shoot for the stars” since in this market there’s really not a “penality” for having to reduce it as there would be in more of a buyers market. So, I would just take that into account when looking at the numbers. Again, I’m not saying its going to make a big difference in your (or someone else’s) analysis of the market…its just important to not take a biased viewpoint of the data and look at it from all angles.

    Also, please take a look at my original response…I never said I don’t agree with your opinion, I just disagreed with the “snarky” way you’re essentially making fun of people that disagree with you. Personally, I happen to believe the market will be strong for the foreseeable future. However, I could be dead wrong about that and can definitely see how others can legitimately take a contrarian view. Again, how did having “more experience” benefit all the big banks and the mortgage issues over the last several years? How does more experience benefit the majority of fund managers that get consistently beat by the S&P 500? Confidence is one thing, but…well you know the rest.

  7. Gilby

    To me it’s both a strong market and a risky market. Strong because there are no signs of a decline (but then again there wasn’t in 2008 and bam/pop in what seemed like practically overnight.) Risky because such steep price increases just feels irrational (but then again there’s no denying it seems like prices will only increase.) We’ve certainly seen RE prices take off like a rocket in the last year and, for the life of me, I don’t exactly know why. The good stuff about Hoboken, (location, transportation options, etc.) are not anything new. Lori, maybe you have some insight. Are people that know much more than me still expecting the rates to jump drastically? I’m sitting on the sidelines for the time being. Selling makes sense, but not buying right now. But, that’s just me.

  8. Lori Turoff

    My recent experience has been lots of buyer who thought they could afford Brooklyn find that 700K buys them a 1-bedroom condo unless they go way, way out in which case the commute becomes an issue. So they try Astoria or Long Island City and – shock – those prices are almost just as high. Finally, they have a friend who lives in Hoboken and convinces them to cross the Hudson. They realize that their money goes much further here and the PATH is a huge convenience and they end up buying here. Almost all of my buyers this year fit this pattern. And they’ve already been through the bidding wars in Brooklyn so they are not afraid to go in strong.

    Interestingly, the vast majority of my clients have at least one member of the family who work in finance. I always ask, as we’re walking around, so where do you think rates are headed and the answer has been quite similar for some time – nowhere.

    Dane – I’m not making fun of people who disagree with me. Sorry if it came off that way. But I do find it amusing when buyers think a few months is going to suddenly change things. The last bubble was a bubble cause by too easy credit. I’m not going to go into all the various problems that fed the beast. Now, if anything, credit is still tight. I don’t see this as a bubble at all nor do any of the more renown economists who write about it regularly.

  9. Lori Turoff

    My recent experience has been lots of buyer who thought they could afford Brooklyn find that 700K buys them a 1-bedroom condo unless they go way, way out in which case the commute becomes an issue. I’ve seen condos for $1.6mil in “trendy Gowanus”. As a native Brooklynite that just sounds so wrong! So they try Astoria or Long Island City and – shock – those prices are almost just as high. Finally, they have a friend who lives in Hoboken and convinces them to cross the Hudson. They realize that their money goes much further here and the PATH is a huge convenience and they end up buying here. Almost all of my buyers this year fit this pattern. And they’ve already been through the bidding wars in Brooklyn so they are not afraid to go in strong.

    Interestingly, the vast majority of my clients have at least one member of the family who work in finance. I always ask, as we’re walking around, so where do you think rates are headed and the answer has been quite similar for some time – nowhere.

    Dane – I’m not making fun of people who disagree with me. Sorry if it came off that way. But I do find it amusing when buyers think a few months is going to suddenly change things. The last bubble was a bubble cause by too easy credit. I’m not going to go into all the various problems that fed the beast. Now, if anything, credit is still tight. I don’t see this as a bubble at all nor do any of the more renown economists who write about it regularly.

  10. Nick

    Lori I think this is really interesting. I am curious what the deviation is for apartments on the North/west part of Hoboken. For example, I am living in 1200 Grand and I am curious if those 2 bed/2bath buildings are now going for near $700K. I have been seeing apartments listed for $650 but not aware of any selling for that or above that.

    I would expect apartments closer to the water and/or path train would be the ones getting closer to $700k.

  11. Gilby

    Thanks Lori, seems like it’s important to keep in mind that expensive does not equal a bubble. Credit still tight, mortgage rates flat and demand increasing. All healthy signs. The one interesting thing is that it sounds like, based on what you are seeing, Hoboken’s real estate market is largely dependent on the health of the Financial Markets. That’s good information, seems like I should not only monitor RE sales trends but Wall Street staffing trends – staffing trending up = buy; laying off = take a break/sell before the music stops. Much appreciated; thanks

  12. Lori Turoff

    Yes – our economy is certainly tied to the fortunes (or misfortunes) of Wall Street.
    L.

  13. Randy

    While I do agree prices are still going up, I think there is a possibility of a bubble too.

    The last bubble occurred for a number of reasons. However, most notably, people were buying as investments and not as a home. And although these investments are much more prevalent in Manhattan, it trickles to the outer boroughs and Hoboken as people that want Manhattan now are forced to buy outside it (and you also have your Hoboken investors).

    Without a doubt, this is happening again. I know numerous people buying apartments in Manhattan hoping to flip it in two years and make a big gain. Both because of cheap money and strong gains over the past two years.

    I don’t think these investors are stopping anytime soon, but its possible. And the question is, what happens when investors/flippers stop?

    What happens if the stock market, which I’m reading more and more everyday, is due for a 10-20% correction occurs. Will it affect the condo buyers of NYC? I would think, but maybe prices will stay strong.

    The arguments against a repeat of 2008 is that money is so cheap right now. Regardless if there is a drop in the stock market, people may keep buying condos with cheap money.

    Also, it seems like more global investors are investing in Manhattan this time around. They see cities like London, Paris, Monaco, and feel Manhattan is cheap in comparison. So this may keep any price drops from happening even if the stock market were to fall.

  14. Gilby

    I know lots of people that have investment condos, they live in one (or a house) and rent out another. I also know a lot of people that moved out of the town but kept their condo and rent it out. But I don’t know how many people who are buying these days are buying for investment purposes. I hope the market isn’t a bunch of flippers as that usually does turn into a musical chairs, not good for the town.

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