2009 Oct 29th

First Time Homebuyer Tax Credit Extended – Higher Income Threshold Will Help Hoboken Condo Buyers

Obama Supports Tax Credit Extension – Bill Almost Certain to Pass in Congress

Bloomberg reports that the previously enacted $8,000 first time homebuyer tax credit is highly likely to be extended to April of 2010.  More importantly for Hoboken buyers, the income limit will be raised so that a single person making up to $125,000 will be eligible for the tax break instead of the current limit of $75,000.  The limit for married couples will rise to $225,000 from the current $125,000.  This is huge for Hoboken buyers, most of whom don’t qualify under the current plan because their incomes are too high.   In addition, there will be a $6,500 credit for any primary residence purchase provided the owner has lived in the prior home for at least 5 years. More news should be available shortly.

Posted by Lori Turoff | Currently 11 Comments »

2009 Aug 5th

Hoboken Condo Auction Action

Going, Going, Gone?auction

Here is the story on the auctionthat is taking place today on two Hoboken condo buildings.  One is a Fields Development project at 1300 Park.  They are very modern 2 and 3 bedroom units that were for sale .  The entire building was for sale in ’97 for $1.1mil.   That listing expired.  Then the ground floor business (a bar with a liquor license) was for sale for $150k in ’98.  That also expired.  Then the 8 units of rentals were gutted, renovated and put on the market for sale by Caufield Real Estate. The units were listed from $499k to $549k.  No luck.  They were pulled as sales and re-listed as rental for $2,750 to $3,150.  Nope.  Now they are up for auction.  3 bedroom 2 baths are 919 sq. ft.  That’s a lot of rooms to squeeze into a small footprint.  The 2 bedroom 2 baths are 896 sq ft.   I liked these much better than the 3 brs.  The esthetic is very high tech with ‘euro’ style kitchens with stone counters & subway tile backsplashes, stainless appliances, nice hardwood floors, exposed air ducts for the central air.  In my opinion, the location is good.  Convenient to the 14th St. bus, NYSports Club, rental parking and close to Washington.  It’s a very pretty area with lots of brownstones & tree-lined streets.  My prediction – if they sell – is in the high 300k range. 

The other project is by Treetop Development and is located at 517 Jackson and called the Emsee.  Obviously the location is the issue there.  A handful of these units have already sold and now the rest are up for auction.  Brand new construction, parking, elevator, bamboo floors, modern kitchens with stainless appliances.  Some sold for as high as $547 a square foot.  Others for only $473.  Now they are being auctioned “at any price”.  Wow – I feel sorry for the guy who paid $520,000 for a 2 bed 2 bath when his neighbor gets it for $150,000 or so.  Remember the Velocity?  That didn’t go so well.  My prediction for these are less optimistic – maybe $200k.

I also wonder, with so many first time buyers going for FHA financing today, and FHA approval requiring no owner control 10% or more of the building and not permitting any retail, how are these buyers going to get financing?  Cash, anyone?

The auction is at the Hyatt in JC tonight at 6pm

Here is the story.

THE WEEKLY WEDNESDAY WRAP UP – will be up but may not make it until Thursday.  We’re headed on vacation and I won’t have access to a computer for most of the day.  If you don’t see it, please check back tomorrow.

Please note – we don’t mass email it out because gmail locks me out of my account.  Just fill in the little form with your email and it will be sent to that address immediately.  Thanks!

Posted by Lori Turoff | Currently 64 Comments »

2009 Feb 17th

Help to Homeowners – Is It Fair? Is It Necessary? Will It Work?

By Lori Turoff  (info@hobokensbest.com)

 

Is A Cram Down Coming Our Way?hoboken cram down

More than 9% of all mortgages nationally are either delinquent or in default according to the Mortgage Bankers Association. Over 2.3 million loans went into foreclosure last year, more than twice the volume of 2006. Estimates are for 3 million foreclosures in 2009 unless something drastic is done by the government to change things.

The NY Times reports Obama’s $50 billion plan for help to homeowners to be announced tomorrow may include government subsidies to reduce a borrower’s interest rate, which the lender would have to match with its own money. Banks might refuse to cooperate, though, if they still see these borrowers as bad risks. Under current law, a borrower cannot use bankruptcy to restructure a mortgage but must seek foreclosure. If legistlation is enacted to change the power of bankruptcy courts, allowing what is sometimes called a “cram down”, it would increase the borrower’s ability to negotiate new loan terms with the lender. Some fear that investors will stop funding mortgages if the terms can later unilaterally be changed in bankruptcy. There are also fears that bond holders will sue the issuers of bundled mortgages if the value of mortgage backed securities are affected. Yet few would disagree that home foreclosures are a root cause of the economic meltdown.

J.P. Morgan and Citi have implemented a temporary freeze on new foreclosure filings, according to the Wall St. Journal. Freddy and Fannie will restructure only when borrowers are already 90 days late with payments. Something has to be done, it is agreed but what is the right course of action for the government to take to prevent the snowball of failing mortgages from continuing to grow?

There’s A Moral Hazard Here, Too

Even if we were to agree that mortgage defaults are a huge problem and that something has to be done about it there is another issue at stake here.

“This puts the whole moral-hazard issue front and center,” said Howard Glaser, a former Clinton administration official and now a financial consultant.

“This is the equivalent of having the government write a check to both the borrowers and the banks, who both made bad decisions,” he said. “But if you are going to do something, regardless of the mechanism, you are going to have to cross the Rubicon to direct federal assistance. It’s a sign of how very few options are left.”

Many feel that the government is using taxpayers’ billions to bail out borrowers who make bad decisions. While some borrowers were deceived and even defrauded, others knowingly borrowed more than they could afford. The family home became a convenient ATM. A bailout helps the banks who make bad loans, and the borrowers who made bad decisions but does nothing to help the frugal and responsible borrowers and homeowners who are current in their payments. In the midst of an economic recession of unknown and increasing severity why should the frugal, responsible borrowers get nothing? Does it pay to act foolishly? Should we all stop making our mortgage payments if we can get a lower rate? Of course, the argument can be made that by bailing out the reckless banks and borrowers the tide of failures is stemmed even greater catastrophe prevented, ultimately benefiting everyone in the long run. What do you think of this?

Posted by Lori Turoff | Currently 21 Comments »

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