2014 Jul 23rd

The Weekly Wednesday Wrap-Up – Hoboken Residential Sales and Activity for the Week of July 23rd, 2014

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As of July 23rd, 2014:

  • 204 active Hoboken listings
  • 192 Condo & Co-op listings, compared to 190 last week
  • 3 Single-family listings, compared to 3 last week
  • 9 Multi-family listings, compared to 10 last week

This Week’s Residential Property Sales & Activity:

  • 9 DABOs (Deposit Accepted By Owner and Under Contract) vs. 24 last week
  • 23 Sold vs 31 last week
  • 23 New listings vs. 26 ast week
  • 11 Price changes vs. 14 last week
  • 0 expired listings vs. 0 last week

 

Studio & 1-Bedroom Properties

98 Active listings

7 New listings

4 Price changes

3 DABOs

  • 1106 Washington St., 2S listed July 9 for $349K;
  • 322 Garden St., 1 listed June 24 for $365K;
  • 68 Park Ave., 7 listed July 3 for $399K;

8 Sold

  • 211 Adams St., 5 listed Mar 27 for $290K; sold for $280K;
  • 309 Monroe St., 7 listed Feb 28 for $310K; reduced Mar 11 to $300K; reduced May 2 to $291K; sold for $289K;
  • 1016 Willow Ave., 1B listed April 25 for $299K; sold for $291K;
  • 63 Jefferson St., 6 listed Mar 13 for $350K; reduced April 24 to $335K; sold for $310K;
  • 420 Jefferson St., 3D listed May 22 for $379K; sold for $380K;
  • 812 Grand St., 209 listed May 2 for $435K; sold for $435K;
  • 1500 Washington St., 3H listed April 2 for $510K; sold for $500K;
  • 930 Jefferson St,. 5B listed Nov 20 for $545K; sold for $545K;

 

2-Bedroom Properties

72 Active listings

12 New listings

6 Price changes

4 DABOs

  • 627 Madison St., B listed June 25 for $489K;
  • 223 Clinton St., 3 listed July 9 for  $645K;
  • 1300 Grand St., 606 listed July 2 for $675K;
  • 2 Constitution Ct., 606 listed June 11 for $869K;
12 Sold
  • 224-226 Willow Ave., 9 listed April 21 for $560K; sold for $530K;
  • 213 14th St., 1F listed April 1 for $649K; reduced April 15 to $629K; reduced April 28 to $599K; sold for $570K;
  • 621 Monroe St., 4B listed April 15 for $559K; sold for $575K;
  • 300 Newark St., 7F listed May 9 for $579K; sold for $605K;
  • 700 1st St., 9E listed May 8 for $625K; sold for $641K;
  • 930 Jefferson St., 5C listed Nov 20 for $775K; sold for $788K;
  • 2 Constitution Ct., 309 listed Mar 14 for $809K; sold for $809K;
  • 600 Hudson St, 5A listed May 15 for $799K; sold for $815K;
  • 218 8th St., listed April 11 for $875K; sold for $825K;
  • 1100 Maxwell Ln., 213 listed Nov 1 for $895K; sold for $879K;
  • 1500 Hudson St., 8U listed May 7 for $935K; sold for $930K;
  • 1125 Maxwell Ln., 900 listed Mar 3 for $2.60M; sold for $2.545M;

 

3-Bedroom & Larger Properties

22 Active listings

4 New listings

1 Price change

19 Multi-Family Active listings

3 Single-Family Active listings

2 DABOs

  • 212 Jackson St., 1 listed July 3 for $600K;
  • 1125 Maxwell Ln., 612 listed June 26 for $1.699M;

3 sold

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  1. Dane

    Looks like a lot more properties being sold below asking and a very healthy amount of price reductions. Could the market be slowing down a bit? I’m seeing a lot less properties sell for over asking…but this could be a factor of demand starting to low OR just sellers starting off with a “why not just shoot for the stars” attitude. I definitely don’t know what’s going to happen, but for the first time in a while there’s at least some data to support the market has lost some steam (again not saying this is the case, but it can at least be argued for the first time in a while!)

  2. Lori

    Have you looked at the June numbers? The discount off list is .3%. I don’t know what you consider “a lot less” or what data you are referring to.

  3. Dane

    I’m not referring to the June numbers, but this specific weekly wrap-up. Again, not trying to look too much into it or say one week makes a “trend”, but it just the first time in a while I’ve seen weekly numbers like this.

    Also, the discount off list is very misleading because of the price discounts. Take, for example, the property at 213 14th street. It originally was listed for $649K, then reduced a couple of times down to $599K, and then sold for $570. So, based off the original list price it would have been more than a 12% discount…however based off the price reductions, it ended up looking like less than a 5% discount.

    I don’t have the data to specifically support whether or not there are more price discounts now vs. 1 or 2 years ago, however it just “seems/feels” like more…and if there are more, the problem with the discounts I illustrated above would become even more of an issue. Anicdotally, I know several people who just wanted to “swing for the fences” with regards to price and just see what they can get because price reductions don’t seem to penalize sellers as much as they did earlier (again, don’t have specific data to support this, but just seems that way as sellers are pretty easily just dropping prices until its closer to market value…therefore making the discount off numbers not completely accurate/comparable to historical numbers.) Something like a price change to sales ratio would probably be helpful (but I realize its probably a pain to put together because it doesn’t seem like the data is easily aggregated to do that!) On the flip side, it seems like some other properties are specifically underpricing their units to create more of a bidding war…which is probably a good tactic, but also messes up the discount amount because it artifically inflates it. In the market, you have those two polar opposite dynamics that are just making the numbers very difficult to read and compare to historical figures. In the past, the market “penalized” sellers more for doing that, so that’s my hypothosis as to why its happening more…but I’ll be the first to say that’s a complete guess.

    Lori, I think you’re doing a great job and really appreciate the website. I’m just trying to point out that statistics can be misleading (lies, damn lies, and statistics), so its good to look at any issue from all angles. Hey, no matter how you look at it, the numbers may say the market is just doing great…its just good to do the due dilegence and keep an open mind.

  4. Gilby

    My guess, we’ll see a slight softening in prices for the next 1-2 months – at minimum at least on 1 bdrms – due to the effect of the reval. (how’s that workin’ out for all of us, eh?) Basically, when you toss in the county, taxes are up up up on all properties for all of us, even those of us that expected to see a tax decrease as the reval presumably was going to level everything out. Once everyone adjusts to the new taxes, the prices will climb again.

  5. Craig

    Any property with a lot of price reductions simply wasn’t priced properly – or has some issues. Properly priced desirable properties with all the amenities have been going fast with bidding wars at close to or above asking price. Demand is through the roof. I asked a broker today why there’s so little inventory lately when everyone has positive equity again and can sell. His answer was because people don’t want to sell. People are now staying and raising families here.

  6. Craig

    @Gilby – I don’t think property taxes will affect pricing much. The people dropping $400k to over a million on a condo aren’t likely to be deterred by a grand or so in tax increases. What’s the alternative…moving to the burbs where taxes on a house are double? Hoboken is still a relative bargain in that department.

    I hear you on the reval and recent county tax increase. Talk about a double whammy. So much for the reval helping out owners of newer construction. It was a big WTF moment for me to open the latest tax bill and see my taxes went up a whopping $1400(!) per year. We just refinanced this month for a savings of over $500/mo., so we still come out ahead though.

  7. Gilby

    I disagree with your price break point, Craig – I think for people purchasing properties on the market for under 1/2 mil, the taxes will have an impact to some degree in the short run. My sense is that a lot of these buyers aren’t families deciding whether to raise their families in Hoboken or in the burbs, but rather individuals whom will either buy or rent or, rent out the unit. I’d guess mostly in the 1-bedroom category. An extra 2K-5K/yr in taxes or $150-$450/mo could be a tipping point and could send them to nearby towns (Jersey City, perhaps)or into rentals. I can’t even guess on the 500K-1mm price point. On those, I just wait to see the numbers, as I think the taxes may or may not temporarily soften continued price climbing. I think inventory will play a part in the big picture for these. If inventory stays tight, maybe no impact but, if families abandon Hoboken before the next school year starts (and I know many who are, surprisingly, throwing in the towel despite initially intending to ‘raise their family’ here)there may be more inventory and a bit of a softening for a month or two. On the over 1mm I’d agree with you that it won’t have any impact, but that’s the smallest category.

  8. Lori

    Have you looked at rental prices lately? Like on the new construction, “luxury” units going up all over the place? Through the roof.

    I had an interesting tour of Montclair yesterday. Wow, you can buy a true mansion there for what a 3BR cost in Hoboken. And you will pay $40k to 50K in property tax. Welcome to New Jersey.

  9. Gilby

    Yes Lori – I actually have looked at and kept an eye on rental prices and they are extraordinarily high. Personally, I’m concerned that they’re going to turn into nothing other than ex-pat corporate rentals and increased transiency in Hoboken, which doesn’t bode well for future elections. But, that aside,you can still find a 1 bedroom rental for 1700-1900 which could actually amount to 1/2 the cost of the mortgage/taxes/condo fee on a 430-450K condo purchase. Not everyone wants or requires a “luxury” rental and, I believe, there are those who will choose not to be quite so “house poor” in order to buy. Regardless, only time will tell. I’m looking forward to watching the market continue to evolve.

  10. Craig

    @Gilby – property taxes don’t impact real property pricing – the law of supply and demand does. And as long as supply is low and demand high in Hoboken, prices will only head upwards. For every buyer who doesn’t want to pay the property taxes on a condo, another 5 will gladly pay them to own it. I’m not sure in which desirable locale in NJ you think you’re going to find drastically lower property taxes. But by all means let us know if you find such a place.

    As for comparing the monthly costs of renting vs. buying, you have to factor in the income tax deductions that come with owning. That brings down the monthly cost considerably. With my deductions factored in, the monthly cost of my condo is below what I could rent it for – and it’s about the same without them factored in. Owners are also getting a 5-10% annual return on their investment in the current market – you don’t get that growing equity in a rental. Lastly, your $1700 rental/$450k condo comparison is apples to oranges. That $1700 1BR rental is not going to have comparable finishes to a $450k 1BR condo – at that price the rental is going to be small, outdated, with old/cheap appliances, and/or a 4th floor walk-up.

    If you’re in the market to buy and you’re waiting for prices to fall in the next 1-2 months before you pull the trigger, good luck with that.

  11. Gilby

    Wow Craig; it seems like my suggesting the possibility that we might see a short 2-month sticker shock softening in the Hoboken’s booming RE market touched a nerve. I’m not saying housing market crash, I’m saying it’s possible that there might be a 1-2 month “softening” of prices for 1-bdrm condos and maybe for some 2-bdrms.

    There is absolutely more to the market than supply & demand. While that’s a huge part of the equation, other things that effect Supply/demand can have an impact, sometimes in the short run. Taxes, the school system, regional job market, crime statistics, climate are more predictable parts of the ‘big picture.’ Supply/demand could change at any moment in time if the price ratio between Hoboken and the surrounding area (including NY which has lower taxes) skews to a tipping point or an unforeseen event (think 911) makes one area seem less attractive in the short run.

    While I’m optimistic that Hoboken’s RE market will remain strong for the foreseeable future, I’ll never be in the “housing markets only ever go up,’ “there’ll always be 5 other buyers,” “everybody prefers equity to flexibility” way of thinking. There are places in New Jersey that are desirable that also have lower taxes than Hoboken. That’s a fact. It all depends on what people are looking for. I’m not interested in heading out to the burbs, but other people might go that route.

    As to the difference between buying and renting – again, it has more to do with the potential buyer’s circumstances than you give credit. Owners may be getting a 5%-10% “return,” but they are living in their “return” – it’s not like they have more money in their immediate pocket or bank account. That kind of thinking may have actually contributed to the 2008 crash as people felt richer, but there was no cold hard cash IN HAND. As to the lower-end rentals not having granite counter tops (which I think are a bit passe) and stainless steal appliances, I’ve come across a lot of people who don’t care as much about that as the salesperson that’s pitching that “selling point” to them. You’re only focusing on one type of buyer. There are hipsters, wall Streeters/techies, retirees, youngsters w/family help on the down payment, young couples, young families, all looking for something slightly different. I sure hope our RE sector isn’t dependent on one type of buyer, that’s too similar to any particular local economy depending on only one type of industry for employment – it’s only good in the short run, but if that industry sector tanks, for whatever reason, there’s nothing else to pick up the slack. I call that a house of cards…not good. Oh, and a lot of our 300K-400K condos are also small and outdated and on the west side of town. According to the prices I’ve seen, anything under 450K is also under 600sf.

    I’m not in the market to invest TODAY, but I will keep a sharp eye on what comes onto the market in the next 4-8 weeks, now that people are opening their tax bills….thank you very much.

  12. AAM

    A small town like Hoboken is always going to be a very dynamic market – especially given the demographics of the population that is deciding to move and/or purchase in town. If someone is considering a move to a Northern NJ suburb, the Hoboken tax bill looks like a bargain, unless you have kid(s) who may require tuition payments for middle or high school. On the other hand, if your choice is between staying here or perhaps moving elsewhere in the US Hoboken property taxes look like highway robbery, especially given the poor state of our infrastructure and the challenges that our local school system faces.

    However, what I have found most interesting outside of current market statistics is the conversations I hear on the playground. If I survey 10 parents of toddlers 2-3 years old, 9 are saying that they plan to move around the time their oldest child is in kindergarten. Free universal pre-k in a true classroom setting is keeping parents here longer, especially households where both parents are working. Once someone tells me they plan to “raise their family here” I now ask “for how long?” The answer is generally a way shorter timeline than one would equate with that statement.

  13. Peter Kim

    AAM: I don’t have the same assessment of parents’ plans for staying/leaving Hoboken that you do. I am a parent to a 2 and 4 year old. We recently bought a condo in Hoboken and obviously plan on staying here post-Kindergarten. We know 3 separate neighbor-families, in the buildings adjacent to ours who also have kids ~2-3 years old and just bought in the last year, who obviously plan on staying post-Kindergarten. Just a coincidence? Maybe, but I don’t think so.

    Many of the families moving and staying here now are folks priced out of Manhattan/Brooklyn/Queens who have a much higher level of comfort in sending their kids to an urban public school than people who either moved here from or grew up in the ‘burbs.

    Of course, I have a vested interest in seeing more families stay in Hoboken through elementary school and even junior/senior high school. My kids will have a more rigorous and competitive school experience if other families of similar academic backgrounds keep their kids in public school, my property value will skyrocket if families stay, etc… Public schools all across NYC are becoming more viable options for upper-middle class families because a few brave families took the initiative and risk to invest in their local schools — public schools in western Queens and Brooklyn weren’t always as in-demand as they are now. I believe the same can and will happen here in Hoboken.

    One thing I don’t get is that I’m hearing more and more of these parents who supposedly want “good schools” but they didn’t come from a highly competitive high school or college themselves. I think they sincerely want their children to attend “better” schools than they did, so I’m not criticizing them. However, it’s easy to believe that “good schools” are a primary determiner of whether our children are “successful” but there’s countless research that shows that’s just not true.

  14. Craig

    I’m with Peter Kim. I’d say AAM’s sample is not representative of everyone. My wife and I will welcome our first child in December – and we aren’t going anywhere. No less than 4 other children will be or have been delivered in my building this year – and no one else is going anywhere anytime soon either. My wife is a public school teacher in NYC. And her opinion is there’s no such thing as failing schools – the problem is usually an abundance of failing parents in such schools. Any child can get a good education in any school if they are willing to take the opportunity and do the work with proper parental oversight. If she’s fine with Hoboken schools after vetting them, then they’re good enough for me.

    In my opinion, the people who flee to the suburbs are looking for a less, shall we say, diverse environment for their kids. And I think they are doing them a disservice, because that’s not reflective of the real world. I grew up in the upper middle class ‘burbs of Westchester County, NY and I have no desire to go back – nothing there prepared me for the real world. My kid is going to be a city kid with a diverse group of friends. And he’ll get to see more of his parents, because they won’t be commuting 2 hours a day roundtrip.

  15. Hoboken Real Estate News – The July Hoboken Condo Sales Results

    […] has been an interesting discussion in the comments of an earlier post about whether or not Hoboken families will stay in Hoboken or, due to our less-than-stellar […]

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