Absolutely amazing responses from the brokerage community (I'd like to know exactly how their business compares to 2006 and 2007 - my bet is their tax returns are much lower for 2008). Home Depot produced a report a while back that tied 41% of all job creation over the last 10 years to the housing industry - brokers, builders, bankers, contractors, furniture, etc. So, basic logic: if the entire industry is in lay off mode, if the mortgage market is essentially shut down for all but conforming loans (which only get you to homes worth up $700k or so), if the cost of operating urban real estate is going through the roof AND we have yet to see the full impact of lay-offs in the NYC metro area; you would have to be silly not to wait at least until the Summer, if not later. I love the responses above: don't miss the boat; values are low; great time to negotiate - but what they don't want to own up to is that the industry is on its face. Please, $1,000 PSF in Hoboken is silly, flat out. Quick litmus test when buying property: what could you theoretically rent the same unit for? If you bought that same unit, netted out operating expense (taxes, maintenance, CAPEX), what would your yield or return on that investment be? One last comment, yes, interest rates are historically low BUT the Fed's rate cuts have yet to appear in mortgage rates - do you get it yet? Mortgage rates are going lower before they go higher. They will go lower once prices drop another 20% because that's what it's going to take to bring buyers back to the table. The banks and brokerages want you think this is the bottom because their entire business model depends on values staying flat. Final word, no one here mentions the necessary adjustment to land values since land is what really appreciates (either its your single family lot or its the cost the developer paid to get into a project). If the builders have all taken hits, that means they've written their land values down as well as current inventory. That savings gets passed on to the consumer if they are patient enough.

Hello Andy, you asked a great question. It is often challenging to figure out if it is the right time to buy. I go through the decision making process in a four part blog which I link to below.

If you buy, make sure you get a big screen with it
or you can wait til next year and save 30%
up to you.

Lori and Andy, Good lesson that info available to the public may be inaccruate and/or misleading. I just took a quick look at '06-'07 condo/coop sales for the Long Island MLS and found a similar pattern to that of Hudson:

'06 # of units sold: 5561
'07 # of units sold: 6442

'06 price/sold unit: $299k
'07 price/sold unit: $317k

What Andy and other prospective condo buyers in the NYC area need to factor in is that the condo/coop market--in terms of prices and short term appreciation prospects--are operating somewhat differently than is the market for new construction or resell single homes.

GerryV

Yes, this is a good time to buy. A very good time to buy. There's a huge amount of inventory. Many sellers are "motivated." Interest rates are very good, and likely will get better over the next couple months.

I'm not specifically familiar with the Hoboken market, and I'll admit I'm a bit puzzled that "the sales/asking price have not changed much in the past year." In many areas of the country, prices have dropped by 20% or more. But, too, keep in mind that the real figure is the "sold" price, not the asking price. And I suspect that for properties that have sold in Hoboken, the actual sales price has dropped measurably.

Just a few words of advice. Don't buy if you're planning to sell in a year or two. The market may remain soft for several years.

And make sure that you're getting a good value. Work with a Realtor who can give you solid, current comps, along with his/her own professional opinion on what the numbers mean.

So, if you buy "right" and plan on holding the property for a number of years, this is an ideal time to buy.

Hope that helps.

Andy,

As a prospective buyer, why would the drop in the number of sales in your target market be "alarming"? Do you see it as a negative that you have way more choices in homes and lots fewer buyers to compete with? I hope not. But it does raise a question about the public's view of the current housing market.

With all of the bad news related to really dumb lending practices--and really dumb purchases of some home buyers and want-to-be Donald Trumps--it seems that too many potential buyers believe that if things are bad for some it's somehow bad for them, too.

Their decision? To wait until they're told that the market is good. But good for whom? For the banks? For investors? For sellers? For the tax collector?

People, when the high-priced PR agents hired by these groups start to get their "good news" stories placed into the media, your buying window of opportunity will have closed.

Finally, what to do above overpriced homes in Hoboken/Jersey City? One, learn what the true market values are--and don't be mislead by the asking prices of homes that are NOT selling nor by the prices of those that sold more than 3 moths ago. Two, find a home you and make a reasonable offer (at or slighly below market value). If the seller's counter is unacceptable, walk. Make a reasonable offer on another great home. You're in control--and that's a great thing if you're a buyer.

Gerry

Every realtor who answers this will answer it the same way. We are in the strongest "Buyer's Market" in over 20 years. It is a great time to be a buyer, not so great if you are selling your home.

Andy

You know just as much or perhaps even MORE than these real estate agents posting here. After reading your post, I have concluded you already have the answer to you question. Don’t confuse yourself

Fred,

Nice to see a like minded, educated individual here. Great points. Don’t let the thumbs-down bother you – they are your badge of honor. We’re outnumbered here, but keep preaching it brother. Either way, the Confederacy of Dunces marches on.

Fred said, “Quick litmus test when buying property: what could you theoretically rent the same unit for? If you bought that same unit, netted out operating expense (taxes, maintenance, CAPEX), what would your yield or return on that investment be?”

I have yet to meet a Realtor ™ that understands this point. An undergraduate course in finance would go a long way for these people.


Gerry said, “People, when the high-priced PR agents hired by these groups start to get their "good news" stories placed into the media, your buying window of opportunity will have closed.”

Gerry – I called you out in another thread on this, without response from you. If this cycle is like previous ones, then prices will bounce along the bottom for quite some time (years) after we bottom out. And we’re far from the bottom my friend. Prices will not spike after we bottom.

Buyers – don’t buy this “you’ll miss the boat” rubbish. Before it was “you’ll miss the boat” it was “Buy now before you’re priced out forever.”

They have a new rallying cry at every point in the cycle to get you to buy, lest they don’t get their 6%.

To answer Andy’s original question – some real capitulation will occur when sales numbers from this coming summer sales season gets out next Fall. Then, the blood will really be in the water. Sellers won’t be too happy about having these albatrosses around their necks for another year or more.

Andy,
You say you got those numbers from Trulia but here are the numbers from the Hudson County MLS:

Hoboken - Dec. 1, 2007 to Feb. 1, 2008 there were 130 condos sold.
Hoboken - Dec. 2, 2006 to Feb. 1 , 2007 there were 146 condos sold.

Jersey City (downtown) - Dec. 1, 2007 to Feb. 1, 2008 there were 57 condos sold.
Jersey City (downtown) - Dec. 1, 2006 to Feb 1, 2007 there were 71 condos sold.

Those figures don't include single or multi family homes (which are a minority of units in these neighborhoods) nor does it include new construction.

That puts quite a different light on your analysis.

Sales prices in Hoboken were actually up in '07 versus '06. Interest rates are at historic lows. If you are buying because you plan to live in the property and not looking to flip it for a fast profit, then yes, it is a good time to buy.

The media and college thinktank gurus are busy jumping on the bandwagon of the housing glut and downward prices and the other alarmist tactics. Was the bubble burst? Yes, of course, it happens every 10-12 years. Were we due? Of course, and the subprime mortgage marketplace was the chief contributor of that, along with a weaker US economy. Data can be interpreted in any one of a number of ways, and while the market is still somewhat soft, I can assure you that the minute the rates came back down again in January, my open houses had buyers coming out of the woodwork and offers on houses started coming in. Granted the offers weren't as close to asking price as they used to be, but the bottom line is, if the house is priced right and in good condition it will still sell. It is an EXCELLENT time to purchase a home, you have alot of inventory to pick from, and sellers are more flexible in discussion of both price and inspection issues within reason. (Forget the fact that I'm an experienced realtor in the Bergen County market, if I weren't busy paying for two kids in college and had some extra dollars, I would be snapping up a couple of properties myself right now!) If you are looking in northern NJ area, give me a call!

I'm primarily looking at downtown JC and Hoboken. How is this such a good time to buy when the prices have been stagnant in these areas yet the sales are way down?

The fact that there have been fewer sales would indicate that your market is slow and therefor a "buyer's market" and that buyers are more scarce than last year. I would suggest you take advantage of this opportunity and buy while rates are still attractive. Fewer buyers in the market place means you will have better results in negotiating a "good deal" for yourself. By waiting another year or more to see how everything played out, you may miss a great buying opportunity. When sales increase, so will the values of the real estate sold.

ITS A FANTASTIC TIME TO BUY!!!! are you kidding me, go to my site and fill ou the FREE MARKET SNAPSHOT report it will give you stats, graphs, charts, all kinds of info for the area you are looking in