2016 Mar 24th

Here’s the ONE TOOL You’ll Need to Make a Killing in the Hoboken Real Estate Market!

Get one of these and you are guaranteed to make money!

We often receive requests from buyers that go something like this:

“We want a 2 bedroom /2 bath condo, of at least 1,100 square feet, in an elevator building with indoor parking, central air, in-home laundry and hopefully outdoor space, and we want to try to keep it under $600,000.”  No problem!  Here’s all that is necessary to find exactly what this buyer wants:

Delorean

 

That’s right folks – all you need is a time machine.  Jump in your DeLorean and set the destination for 2011.  Back then, we were selling a condo at 1313 Park Avenue with most of those features (no outdoor space) for just over $500,000.  We couldn’t give it way.   In fact, it went unsold for 6 months and the sellers pulled it off the market because they wouldn’t accept the only offer they received in the mid-400’s.   We should have bought it ourselves!  The last unit that sold in that building closed last May for over $700k.  Today it would probably fetch closer to $750k.

What’s that you say?  You want to be close to the PATH too?  That’s going to be a bit of a challenge, even with our time machine.  Most of the properties near the PATH were built around the turn of the century, so while they may have some or all of the amenities you seek, few or none will have an elevator, or central air, or parking.  We can try going Back to the Future (see what I did there)?   New construction (like that at 84 Willow Ave.) starts at over $900k and goes well over a million.

84 willow

The planned construction for Observer Blvd over the railroad tracks may have all the amenities you desire, they certainly will not be in your price range.  But fear not – there are no problems our DeLorean can’t solve.  Simply go back to the 1960s when buying a blighted bulding in Hoboken was still affordable and develop your own luxury building.  Here is 600Newark St. for sale for just over a million in 2000 and today, with individual condos starting at $1,800,000.

600 newark

2000 – for sale for $1,035,000.

hanoben

Today – one apartment sells for $1,800,000.

 

 

 

 

 

 

 

 

Now clearly I’m being a smart aleck – but I’m trying to make a point.  If your Realtor takes you to see homes in your price range and they are either too small, too dark, too far from the PATH or too many flights up, then either you need to increase your budget to get what you want, or reconcile yourself to the fact that you’re going to have to make some sacrifices.  No seller is going to accept less that what their home is worth in today’s market because you’re a nice person, or because you want a deal.  There are no deals in a seller’s market – only bruised bananas.  When the fruit cart is full of bananas you can be picky and look for that perfect banana and play hardball, because supply is plentiful and demand is weak.  When there are only a few bananas, you’re going to have to pay up for the best one, and overlook the bruises because there are three other people waiting to buy it if you do not.

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  1. Zach Turner

    The opportunity to take a risk in real estate and be rewarded, of course, does not require a time machine.

    Deals like the C.2000 one you illustrate at 600 Newark St. are available today–in Weehawken, Union City etc. But there are risks to these neighborhoods. Is this going to be a good block? Who are my neighbors going to be for the next 10 years?? Where will I buy my organic, free-range, gluten-free, humanely-sourced after-school treats???

    They don’t remember–or never knew–what Newark St. was like in 2000. Spending $1,000,000 on 600 Newark was a “steal” only in retrospect. At the time, it was a risk and the person willing to take that risk has been rewarded for doing so.

    People don’t want to live in marginal neighborhoods without Mommy-friendly retail and they want a guarantee that their new home will be worth more than they paid for it when they go to sell it. The want no risk AND high reward.

    No risk/big reward in NOT how the Free Market works. In our system there are no free lunches and very few “hidden” deals that have somehow, magically, been over-looked–especially now that everyone can log on to the Internet and see what’s for sale in any ZIP code. That $100 bill lying on the ground? It’s probably NOT a $100 bill.

    What people need is a smart and savvy Real Estate broker to help them clarify their wish list and get an intelligent perspective on their options.

  2. Lori Turoff

    Great point Zach, but this blog is HobokenRealEstateNews, not WeehawkenRealEstateNews. Lori’s target readership for this post are people looking to buy in Hoboken and who either get continually outbid, or who can’t find a place to their liking within their budget.

  3. jacob

    Listen to Lori’s truth bombs. I love the analogy of bruised bananas.

    Lori, what is the mortgage climate like? Still mostly 20% down and more sound lending? I hear the 3% down are picking up. What would happen if the stock market crashes like 2008? Correct me if I’m wrong, back then many mortgages were ARMS and those denoted at the same time with the stock market crash bringing property prices down 35% and foreclosures. How would Hoboken prices endure during another 2008 market drop? I know you aren’t a psychic, but what is your opinion?

  4. lori

    I’ve not seen any buyers purchasing in this area with under 15% (and even that is rare) never mind 3%. There are multiple offers on, literally, almost every property. Why would a seller ever choose a buyer with no real downpayment and risk the deal falling apart over a low appraisal – not gonna happen.

    I don’t know what happens if the stock market crashes. What happens if Trump becomes President? Or Isis attacks us? There are always variables that we can’t predict. You have to make decisions on what you know to be reality today. I can’t live in fear of the future or regret of the past. Very yogic, no?

    I think our real estate market is extremely sound with owner occupiers buying and putting money into the deals. That is comforting to me.

  5. Hobokeninc.com

    Great article Lori. It’s impressive how strong the fundamentals are in Hoboken. We have many friends trying to buy with 25%+ down and they are losing to people with all cash offers. There is so little leverage in the system its incredible. I see these rising prices continuing for the significant future as many are priced out of Brooklyn or Manhattan.

  6. JC

    Great points Zack. The market efficiency theory at work. While Lori’s readers are certainly Hoboken centric, that doesn’t mean there are not alternatives outside of Hoboken that I’m sure most Hoboken buyers weigh on a daily basis up until the point they decide to choose to buy Hoboken real estate. The amount of cash (all cash buyers) being put to work in real estate in Hoboken, and the New York City metro area is astounding. That being said, these mortgage rates of sub 4% are relatively free money compared to the historical averages of the last 30 years

  7. lori

    Right, JC? I keep hearing buyers complain that their rate went up to 3.75 and I just laugh! Remember the Jimmy Carter days?

  8. jacob

    Is there any web page that articulates upcoming developments in Hoboken? With all of the new construction, I’m trying to learn the ratio of supply that will enter the market (rental vs condo).

  9. Lori Turoff

    Jacob, not that I know of. The vast majority of new construction in Hoboken, however, is rental, not condo.

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