2016 Apr 8th

The Hoboken Condo Quarterly Sales Results

I have the mother of all spread sheets. Seriously – it goes to column “BO”.  Sixteen years of data. I like tracking the market. I like it because I want to know how my property value has changed. Isn’t that what Zillow purports to do with their inaccurate Zestimates ? You know why they are so inaccurate? Because Zillow pulls data from public sources, like the tax records and then uses a “propriety formula”, a fancy name for an algorithm, to come up with the value of your home. Problem is, the algorithm contains sales of houses and not just condos. So in an urban area like Hoboken, they are especially poor predictors.

As a realtor, I have the advantage of being able to access the MLS and get the actual closed sales data from the MLS. Granted, agents make mistakes in entering the data but its pretty close to correct. I then crunch those real closed sales figures and prepare my quarterly chart.  It’s loaded with great info and for you financial types who like studying spreadsheets and manipulating the numbers, you’d love it.  I’m not going to give it away.  I’ll share it with you if you would kindly do something for me.  Go to Facebook and “like” HobokenRealEstateNews.  I’ll then message you the spread sheet.  Believe me, it’ll be worth it.  You may even enjoy the feed – Howie posts great real estate jokes.

In the meantime – here is a teaser.  I find the visual more compelling than a chart.  The story is so clear.  If you have any inkling of selling your Hoboken condo, now would be a really good time and if you contact me, I’d be so happy to do that for you.  Yes, we are extremely good at what we do.  But that’s another post.  Smart people debate if median matter more than average so I’ll give you both.  Enjoy.

median

 

Avg sale price

 

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  1. Jake

    Can you break this down by 1br, 2br, 3br?
    That would be magical.

  2. Homeowner

    Numerous residents seem to feel there is a “bubble” in town while others insist that is not the case. What is your assessment of the market dynamics in 2016 vs. say 2008? What risks do and do not exist now and then on price stability?

  3. hobokeninc.com

    @Homeowner, great question. I’ve thought about the market dynamics now versus 2008. I’d love to hear Lori’s take, but the biggest difference I see is the lack of leverage in the system. What that means is that 2016’s buyers are very well qualified. They are putting down sizable down payments (at least 20% or greater). In 2008, anyone with a pulse was given a mortgage, and this drove up demand. Today’s demand is very real, and it’s driven by the value people see in Hoboken being on the periphery of Manhattan. This lack of leverage means that the fundamentals in 2016 are very sound, which was not the case in 2008. Real estate is certainly cyclical, but I don’t see prices going down anytime soon. And expect the increase to continue.

  4. Lori Turoff

    I agree with the above 100%. The buyers I see now are buying to owner-occupy their properties – not make a quick buck. They have been priced out of Manhattan for quite some time. Now they are priced out of Brooklyn and even Queens. The two-family house I grew up in in Ridgewood, Queens, just sold for almost a million. Hoboken is still underpriced compared to the alternatives and we have a better transportation system. I do not believe this is a bubble.

  5. jacob

    ODD!
    Lori…I grew up in Ridgewood (in the 80s).
    On 61st across from our lady miraculous medal.
    My family still owns there.

  6. Rod Handler

    I’m no real estate expert, but in order to determine if there’s a bubble I would need to compare a few things:

    First, we all have to live somewhere so you have to look at comparables to Hoboken. Second, you have to change “house price” to “monthly payment” because most of us buy a house one month at a time as we decrease our principal balance.

    1) what have Hoboken real estate prices done vs Manhattan, Queens, Brooklyn, and Jersey City? If Hoboken has gone up more than maybe it’s in a bubble, if Hoboken has gone up less, than maybe it’s not in a bubble

    2) we all have to live somewhere so if you didn’t buy you’d have to rent. What has the monthly payment on a mortgage done vs rent in Hoboken? Have monthly payments increased dramatically vs rents recently?

    Answer those two questions and you have a good idea of whether these price increases are sustainable.

    1) I think that family-friendly places in Manhattan and Brooklyn (particularly Park Slope) have skyrocketed vs Hoboken since the bottom. Not a day goes by that I don’t feel regret for not buying in Park Slope in Sept 2010 rather than buying in Hoboken (OK, maybe I don’t regret it every day….but almost every day). If I’d bought in Park Slope I would be able to sell my place today and buy in Hoboken for cash, or pretty close to cash.

    2) the monthly payment on a $600,000 2 bedroom would be roughly $3,000 with 10% down and a 30 year fixed at 4% after taxes and insurance. That is probably about the going rate for renting (I don’t know the real going rate because I haven’t looked, but when we moved here in 2010 we paid about $2,500 for a 2 bedroom so $3,000 seems reasonable).

    So in my opinion: not a bubble.

  7. JC

    Nice analysis Rod. Don’t forget the amount of folks putting down all cash or 20% on down Payment instead of no money down loans. Don’t spend time playing the “wish I bought back then” game. But since you brought it up….I bought Las Vegas sands stock in March 2009 for $3.00. Sold days later for $4.00. 33% in days! Genius right?!? Yeah…should have held. We all have these.

  8. Lori Turoff

    FYI – 2 bedroom rentals with parking in decent (not Maxwell – just MetroHomes type) elevator buildings are now from 3,800 and up. In the new “luxury” rental buildings they are closer to 4,800.

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