2017 Mar 10th

The February Hoboken Condo Sales Results

For the first time in a very long time, sales of this month versus a year ago are down slightly.  Could rising interest rates be affecting the market?  More likely, the holiday season (home shoppers in December close on their purchases in February) and a very short month.  We will keep an eye on this as we go forward.


I opened the NYTimes magazine section this morning to see several real estate ads within the first few pages that read, in part, as follows –

Waterline SquareIntroducing the most comprehensive residential experience in New York City, on a lush and expansive new park, where Midtown meets the Upper West Side. Condominium residences starting from approximately $2 million.

One West EndRomantic New York Skyline views and Hudson River sunsets are the breathtaking backdrop of One West End’s Tower Residences. 3 and 4 bedroom condominiums from $4.08M to over $19M.

207 W 79New architecture reinterprets the classic Upper West Side residence.  From $3.95 to $15MM.

50 United Nations Plaza – 88 Condominiums. One to seven bedrooms. From $2.21M to $70m.

That’s right – $70,000,000. I guess Hoboken still looks like a great deal from this perspective.

  1. Matt

    Love the continual market reporting and insight. Could you provide a little more detail on YoY sales by bedroom? A swing in one group (likey 3BR) could easily change the average. Also still low to no inventory so it’s hard to call it as efficient of a market as a year ago.

  2. Lori Turoff

    Thanks, Matt. Please remember me when it’s time to buy or sell!

    It is low inventory now but it was low inventory a year ago, as well. I’ve been doing this for long enough to see that the changes in one month may be influenced by a certain sale or new building or other weirdness but the overlying trends become pretty apparent. I don’t think a month is enough to call a trend. That’s why I say watch closely. Rising interest rates and political uncertainty or even unrest will cause the market to move.

  3. Gilby

    I’m guessing rising interest rates will have a marginal impact (because it is a marginal increase.) How do you think political uncertainty/unrest could impact the housing market, Lori? I’ve never thought about it and welcome your insight.

  4. Eric

    Lori, there’s a growing chance for a market correction (eventually, if not soon). Markets are overvalued according to some metrics. How has real estate been affected in past market drops and recessions?

    The recession in ’08 seems like it was tied more to real estate than usual due to the mortgage and sub-prime crisis. So assuming mortgages are healthier, what happens to real estate in recessions/corrections?

    I would expect sales to slow and price growth to flatten. But is there a risk of more dramatic real estate behavior?

  5. Lori Turoff

    Gilby – political upheaval causes investors to seek safe havens for their wealth. For the Chinese, Russians and some others, that has meant investing in NYC real estate (and NJ has its share of foreign investment as well – you should see the list of buyers’ names I see in the MLS every day). Take a look at this article: http://www.economist.com/news/finance-and-economics/21718511-bolthole-money-welcome-comes-unintended-consequences-foreign-buyers

    If the US is no longer seen as a safe haven – because of the risk of runaway inflation, threats of eliminating the Federal Reserve, tax code changes, macroeconomic health care crisis, etc. some of that foreign money may go elsewhere. In fact, New Zealand has become quite popular! That lessening in demand is bound to affect our market.

    Local buyers may prefer to rent than buy if they fear a loss in their asset value. Or maybe they prefer to buy if inflation drives prices up? Hard to call that one.

    Eric, on what do you base your prophecy? Which metrics are you looking at? I can’t answer you without knowing the specifics. Thanks.

  6. Gilby

    Thanks Lori. Interesting. We may escape the worst of it as, it seems, a lot of our purchasers here in Hoboken are people looking for a better deal than they can find in NYC or Brooklyn as opposed to foreign investors. (It might effect the big developers as I’d guess a good bit of their funding comes from overseas, but not so much the individual owners that might be selling.)

    The rent or buy equation does sound like it might have some impact if people start to think prices are going soft. We’ve seen the buyers waiting on the sidelines while they try to “predict” the bottom, which has strikes me as silly.

  7. Lori

    Actually, we have many, many foreigners buying in Hoboken and JC. I see the names of the buyers every day and it is quite obvious. I cannot tell if they are buying as investors (and renting the properties out) or to live – probably a mix of both. My last sale, just this week, was an all cash deal to a Chinese investor. They tend to be very young so maybe the money is coming from their parents in China, Russia or India but they are here!

  8. Eric

    Hi Lori, I’m not shouting ‘the end is nigh’, no specific predictions here. But at some point whether in 2 years, 5 years, 10 years… there will be a correction or recession. I was just asking based on your experience, how real estate performs and sells in previous such bear markets. I guess 2000 and 1987 were the last 2 significant market dips outside of 2008, which I hope was an exception since it was intrinsically tied to real estate and mortgages.

  9. Lori

    Hi Eric,
    We’ve been buying real estate in the NYC Metro area since the early ’80s. The lesson I’ve learned from all those year, many transactions and market fluctuation is that the real estate market always comes back. It’s all a question of whether you are able to wait it out long enough. ’87 and 2000 were blips compared to ’08. Today I can honestly say I wish I had bought every Hoboken condo on the market in ’08 that sat there with price reduction after price reduction. I’d be a billionaire today. The bottom line is people always need a place to live.

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