2017 Oct 9th

The September Hoboken & Jersey City Sales Results

Looks like we have a little dip in prices this most recent month.  Of course, one month does not create a trend and the last quarter is always the slowest.  We will continue to track!

Here is HOBOKEN:

Here is DOWNTOWN JERSEY CITY:

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  1. Jeff

    Hey Lori- What impact, if any, do you think the proposed tax plan will have on property values and inventory?

    Current proposal, that was released today, calls for cap on mortgage interest deduction at $500,000 for new home purchases and cap deduction of state and local property taxes at $10,000.

    Thanks

  2. Jc

    My two cents….Toll brothers stock was down 6%, so the market thinks luxury sales will certainly be affected. My guess is not a material impact. You are still getting benefit of interest and taxes just not as much, so I don’t think that will have a material impact on a large life decision to buy property. Maybe those doing the math on a million dollar place will realize they will miss out on a few grand per year back and therefore decide to buy a $900k place instead. So maybe the properties at a million give or take a few hundred grand could see slower movement. Higher end of market probably don’t use mortgages that much anyway and even if they do they don’t need the interest/property tax deduction to factor in purchases anyway. By the way….this is all a negotiation and may not come to be realized

  3. Joshua

    Just my opinion but property values are sort of damned if it passes as is, damned if it doesn’t pass at all. The combination of capping mortgage interest at 500k and property tax deduction at 10k, and more importantly, eliminating the SALT on income deduction, will have a significant impact on buyers above $1M. (god help homeowners in South Orange, Maplewood, and Montclair with their 30k property tax on an 800k property — downtown JC after the reval could be decimated as well). Above $1M (and particularly above $1.5M) it is a soft market in Hoboken – nothing like the market sub $900k. Additionally buyers with AGI’s between $260k-$440k will actually see a net bracket rate increase. I’d presume that range is the sweet spot in terms of the volume of buyers for $1M – $2M purchases. So their rate is going up and their deductions are being massively reduced. As the market softens further it will bleed in to the upper end of the current hot spot. If a 1600 sqft $1.3M condo becomes $1M-$1.15M, it will put downward pressure on a 1,000-1,100 sqft condo @850k-900k All of this as interest rates are on a path towards normalization, leaves the market only one way to go. As proposed, I think we see a significant correction in 2/2’s and up and a lesser correction below where the deductions will be largely unchanged and the AGI’s of buyers are largely below $260k.

    Now if tax reform fails to pass, the stock market is likely to see a massive correction as corporate tax reform is largely baked in to the current valuations. Hoboken real estate has closely tracked the stock market over time, so I think a correction is likely if the market pulls back.

    Our best hope is tax reform that saves the SALT deduction and leaves property tax and mortgage interest deductions closer to status quo. The problem is that doesn’t allow for corporate tax reform without blowing a massive whole in the budget.

    Whatever happens, I’m happy having recently sold and waiting it out on the sidelines. I think there’s very little upside at this point, and a whole lot of risk…

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