2010 Mar 5th

Why You Might Urge Your Condo Association to get FHA Approval for your Building

Could This Help Get Your Home Sold?moneyhouse

We had a heated discussion on this board about the pros and cons of FHA financing with comment0rs on both sides of the argument making some good points.  Putting aside for a moment the merits of whether there should be FHA financing, let’s take a look at what FHA lending accomplishes.  Many young, first time home-buyers simply don’t have 20% of the purchase price saved to enable them to buy a home.  It is possible under certain circumstances to get a conventional loan with 15% or maybe even 10% down but it’s very tough and you have to have stellar credit and pay PMI (purchase money insurance).  The FHA program lets qualified buyers put down as little at 3.5% and to include closing costs in the loan.  That opens up a whole new universe of buyers.

What Would A Condo Association Have to Do?

To get FHA approval for a building certain conditions must be met and it varies for new construction and pre-existing condos.  Here, I’m talking about a building that’s been around for a while and is fully occupied, not brand new construction.  For example, (and this is just an overview – for specifics, read this)   to the  at least 50% of the units must be owner occupied;  there can’t be more than a 25% of commercial floor space and it has to be “of a nature that’s homogenous with residential use”;  one owner cannot own more than 10% of the condos.  There must be adequate insurance on the building, including flood insurance if it’s in a flood zone.  Basically, the risk of default has to be spread as thinly as possible.  Nonetheless, many condos in Hoboken already may or easily could meet the requirements. Obtaining FHA certification may make the units in those buildings more valuable.  Why, you might wonder?  Because now they are more marketable. Many potential buyers who might not have been able to purchase your unit now can with FHA approval.

How Do you Do It and What Does it Cost?

What you would need to do if you are interested is to have your Condo Board contact a good mortgage lender.  They would help you through the approval process.  According to one lender with whom I do a lot of business, it should cost about $3,000 and take about 6 months or less. Now that might seem expensive but the cost could be spread over all the unit owners since they will all benefit from the approval or, if your association has sufficient funds in reserve, could be paid for with that.  Something to seriously consider in today’s Hoboken real estate market if you wish to increase your ability to sell your condo.

Posted by Lori Turoff | Currently 1 Comment »

2010 Jan 26th

More on Hoboken Condo Sales Annual Numbers and Activity

Year Over Year – Annual Average and Median Sales Prices

This chart compares year-over-year changes in prices. Blue is average sales price, red is median.

Number of Deals Being Done

Extremely important, this chart shows how many actual closings took place each year.

What You Really Seem To Want To Know

I read comments and threads on other sites and it seems people are hung up on how far down we’ve come in the Hoboken condo market since the peak. According to the data I have available to me (and I admit it is not perfect as it is limited to what is provided on the MLS), the highest average sales price annually $524,887 was in 2008. We ended 2009 at $501,337. That represents a decrease of 4%. Similarly, the peak median sales price in both 2007 and 2008 was $500,000. In 2009 it was $470,000 representing a 6% decrease.

Now, I don’t make these numbers up – they come straight from the MLS. In fact, here are the numbers:

I hear people talking about a 20% decline. Ok, show me the data.   If you know something I don’t please share it with us. I’m not interested in anecdotal evidence of “oh, my neighbor bought in 2007 for 600k and had to sell for 300k. ” That’s statistically meaningless. I’m willing to put my name to my work and provide the basis for my calculations. I challenge anyone to do the same.

Posted by Lori Turoff | Currently 45 Comments »

2010 Jan 25th

Which Hoboken Condos are FHA Approved?

I’m asked this question frequently.  Here is the HUD website with the answer  (the URL is https://entp.hud.gov/idapp/html/condo1.cfm):

Posted by Lori Turoff | Currently 2 Comments »

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