Home Buying in 07030>Question Details

Newhome, Home Buyer in 07030

Buying a 2 bed condo at 1450 washington, hoboken, NJ. 605K non negotiable, Toll bros new construction. Is the price right? Is it a good investment?

Asked by Newhome, 07030 Sun Oct 9, 2011

We are planning to buy a 2 bedroom at 1450 Washington St, Hoboken, NJ for $605K. It is a new construction and the builder is Toll Bros. Is the price right? Toll bros had said that the price is totally non-negotiable. Is buying a condo in Hoboken a good investment? How good are the chances of appreciation over a period of 5 to 6 years? The monthly maintenance/HOA fees are steep, around $750 per month. Tax is around 1.3 %. We are worried that the monthly fees will keep going up. We don’t have kids yet but from what I read the Hoboken school district isn’t great. Our gut is that home value in Hoboken will only grow, probably school district will further improve and this will prove to be a good investment. We are putting all our savings so would really appreciate some advice

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I lived in Hoboken for 2 years and it is a great place..close to NYC, unbelievable views, amenities galore, Newport Mall nearby, movie theater on 14th St., new Beer Garden. It depends on your definition of investment...personally as a real estate investor myself (this is my own personal opinion keep in mind), an investment is an asset that will provide a reasonable ROI (return on investment). With that said, your personal residence is NOT an investment. The reason being...repair costs, maintenance, interest costs, condo fees, etc..will not provide you the ROI you would need to argue it's a worth wild investment. However if you plan on being there for years to come and absolutely love the area then spending that money on a nice place for you and your family could be considered a good personal choice /lifestyle investment I guess. With that being said a couple things to keep in mind....
1.) Condo's don't appreciate as much as single family residences
2.) We will more than likely never experience the same RE market appreciation that we've seen before the collapse, so don't expect double digit returns in 3-6 years. even in places like Hoboken.
3.) There is great demand for Hoboken, which is good because that means people WANT to live there and you'll likely be able to sell your Condo for a price close to what you've paid for it in the near future, especially if demand is there and supply is not for your condo complex... (I'm not Merlin the Magician, so I can't guarantee what the market does in the future, just a guess)
4.) On the flip side, because there is great demand in Hoboken, (it has become saturated with investors scooping up properties left and right), you'll already be paying a high premium for any property move-in ready. Again, an an investor we're looking to buy dirt cheap and sell mile high, not the reverse.

Personally, (again to remind you this in my opinion, not financial advice) from an ROI investment perspecitve, It's simply not an investment. Yes, Hoboken is a great location, and prices right now reflect that. Individuals are paying a premium to live there. $605,000 is a LOT OF MONEY for a CONDO, and $750 HOA fees is ummmm well higher than most people's monthly rent. If you're looking for an investment, look toward Union City or Jersey City Heights. Union City is literally a hop and skip away, it's becoming a very nice place due to investor activity and development. Buy something that needs work and renovate it with those custom finishings you've always wanted. ( hint: Watch HGTV's show "Property Brothers" and you'll see what you can do to a property that needs work) You'll build instant equity from the renovation, more than likely get higher appreciation over time, and you can always decide to rent it out for a nice cash flow if you decide to move. Now that is an investment!!

Hope this helps and best of luck!
1 vote Thank Flag Link Fri Dec 2, 2011
haha ... look at the comment back now :) couldn't be more wrong
Flag Wed Aug 20, 2014
Dear New Home Buyer,
Last year,we purchased a home in the neighboring community of 1450 Washington, right across the street at the Hudson Tea. At that time when we were looking there were no 2 bedrooms less than 700k. Several months after our purchase was made 1450 Washington opened up their sales office, offering 2 beds for 605k .This community is located steps to the NYC Ferry, Hoboken waterfront. I believe in realestate Location, location, location will always prove to be a great investment. We are enjoying our new "Uptown" location and would not consider selling without holding the apartment for at least 5-7 years, thinking more like 10 to 15 year hold. 605k for a two bed in this prime location, new construction seems to be a terrific value, given its location and that it is a full service building with a 24 hrs, doorman. The building community is also planning on having a pool in the next phase of development which is always a plus. I understand your concerns about the fees in the building but if you ever plan on renting out your unit in the future you will be able to ask premium dollars for your rent which should enable you to cover your costs- depending on how much you put down. Please feel free to contact me if you wish to have me help you in any way explore our market, or have any other questions or concerns. Good luck in whatever you decide and look foward to hopefully being neighbors! Warmest regards, Amy DeAngelo

Amy DeAngelo | Sales Partner
Halliburton Homes | http://www.halliburtonhomes.com
254 First Street, Hoboken NJ 07030
Email: adeangelo@halliburtonhomes.com
Direct: 917.301.1709 Fax: 201.221.7705
1 vote Thank Flag Link Wed Oct 19, 2011
If the condo is over 1000 sf, you got a decent deal. Call me with more details but this seems pretty good eeven if it is a low floor. Are you buying for appreciation or cash flow? Yields in Hoboken are low because risk is low but there is strong potential for growth due to certain demographic trends. Call and I can explain. Rob 201-953-3335, GSRG.
0 votes Thank Flag Link Thu Apr 24, 2014
Hope you were luck enough to buy in 2011 for that price. 2bed/2bath are now going for $1MM
0 votes Thank Flag Link Tue Apr 15, 2014
Sounds like a bubble to me, but wow that's impressive increase. Kind of ridiculous actually, you can get a house in Chatham, Summit, Berk Heights, Morristown and have direct route to NYC via train. That's exactly what I'm seeing now.
Flag Tue Apr 15, 2014
That sounds like a good investment to me!
Flag Tue Apr 15, 2014
Sorry folks I am a Florida broker lost my way, how the heck did I end up here in New Jersey. Wow $605,000 for a two bedroom? Now that is rich . How could I convince you to look at some beach front condos after you bought that one?
0 votes Thank Flag Link Wed Nov 30, 2011
Know that agents aren't investment professionals, so you have to see what works for you. If you're considering real estate as in investment, typically it will always go up, but when is the question. If you're looking at a long term hold strategy, you have to figure out what will work for you. Short term, you have to consider tax implications along with any possible appreciation, which isn't guaranteed. Don't trust a realtor that will tell you that you are destined to make money on a piece of property, we are not qualified. You can get a market analysis, and appraisal that gives you data to enable YOU to make the best decision for yourself.
0 votes Thank Flag Link Tue Nov 29, 2011
Hi Newhome,

Wait another year to buy, prices are declining. Good Luck
0 votes Thank Flag Link Wed Oct 19, 2011
Sounds like a good time to interview a few local real estate agents in the area. I'm sure after that you will have a good idea of what you think the market is doing. You will also have a person you know personally to ask all future questions to
0 votes Thank Flag Link Wed Oct 19, 2011
Hi Newhome,

You have some valid concerns that most new home buyers all share. It's true, Toll Brothers rarely, if ever, negotiates beyond offering some advertised incentives. The price is probably right in the sense that it is consistent with what Toll Brothers has put other similar homes under contract for. What do you think of the price? Have you seen other 2B/2B homes in Hoboken, or have you only visited 1450 Washington? There are a number of great 2B/2B homes, including some in the uptown location, which are priced more conservatively (and with lower HOA fee's).

I cant comment on the likelihood of seeing appreciation over the next 5-6 years, but as another poster mentioned, it does seem concerning that you would be putting your full savings into this investment. You may want to speak with a mortgage broker about what options are available that would allow you to put less money down and still qualify to purchase a condo. I'd be more than happy to pass along some mortgage contacts as well as show you a sampling of what other comparable condos are available in Hoboken. If interested, my contact info is below.

Best of luck,
Matthew Franklin
Realtor Associate
Halliburton Homes
0 votes Thank Flag Link Tue Oct 18, 2011
The answers provided already give you some good overviews on the markets. The part of your question that jumped out at me, though, was the last sentence. Unless your income is going to increase quickly for the next several years, be careful about putting all of your savings into one item. Also, make sure you have additional funds for closing costs.

When you have kids, your expenses spike higher and your income can potentially be significantly reduced. If your savings have not had time to build back up, you will get squeezed.

As far as the project, it is coming along nicely and the condos are going into contract at a fairly brisk pace, so in this current market, your peers (other buyers) see value in the building. However, my sense is the people going into contract have significant assets so they are not putting all their eggs in the one basket of 1450 Washington. The prices are firm and in fact, Toll raised the prices on remaining units a week and a half ago, so don't stress over the fact that you didn't negotiate a better price.

What you may want to consider if you are still under attorney review is other condo buildings in Hoboken away from the water. There has been significant price compression in the market and there are some nice choices in 2bed/2 bath places w/ parking in the 450-500k and 500k - 550k price ranges w/ lower monthly maintenance fees. Find a Realtor who is knowledgeable and who you can learn to trust and take a look at a half dozen places so you know what your other options include.

Best of luck with your search and move.

Trip Patterson
Re/Max Gold Coast Realty
0 votes Thank Flag Link Mon Oct 10, 2011
Hi New Home Buyer, unfortunately there is no 100% accurate way of determining if a price is “right”. I have spent plenty of time building pricing models, analyzing market trends and producing CMA’s but all of these tools simply act as a guide. At the end of the day a price is “right” at the point where the seller is willing to sell and the buyer is willing to buy.

The collapse of the mortgage market has dramatically changed how the world views real estate. The introduction of Dodd-Frank and the ever growing list of regulations, placed on banks, have caused private-label mortgage lending to nearly grind to a halt. Private-label or non-agency mortgage lending is when a bank creates a mortgage that is not deliverable to or backed by the US government (GSE). As private-label lending and residential mortgage backed securities return so will housing appreciation. It’s too early to tell but I believe the recent change to conforming loan limits is a step in the right direction.

Mortgage rates are at 1950’s levels and homes once outside of our budgets are now within reach, but to decide if purchasing is a good investment you must consider a number of factors. What are your financial goals? “Buy – Sell”, “Buy – Rent Roll”, “Buy – Hold”. What are your alternatives to purchasing, i.e. renting? There are advantages and disadvantages with each such as the monthly tax break with ownership and not having to pay a down payment while renting. Once you have detailed all of the cost and benefits you can make an informed decision as to if this investment is right for you or not. If you have any questions or would like a free rent vs. buy analysis please don’t hesitate reaching out to me.

Matthew Mustich
Licensed Real Estate Agent
HALLIBURTON HOMES: "Real Estate Services"
Direct: 201.360.9928
Office: 201.792.4300
0 votes Thank Flag Link Mon Oct 10, 2011
Hello Newhome, I agree with Amos sentiment. If you are buying a home because you think it is a good investment then take some time to investigate the market you are buying in and know that there is no sure bet.
Also, specifically regarding 1450 you should know that there will be yet another new building going up across the street that will have it's own pricing and then will be the newest, new building.
If you are planning on having children you should strongly consider the possibility of being in your new home, with carrying costs (don't forget utilities and insurance) for the long run.
Any investment should be thought of with a long term strategy to maximize income - so 5 to 6 years may not be long enough depending on what happens in our markets.
Currently our market is showing signs of strengthening and no doubt there are good opportunities, but I think buyer's need to think in longer terms.
Remember, just 5 - 6 years ago many people bought homes with the idea of keeping them 5 to 6 years and here they are, not able to sell, or I should say not able to sell unless they sell short. If you plan on starting a family, maybe you should consider all factors, and make sure that your home is large enough to accommodate your growing family.
Many residents enjoy the early learning schools and prek care Hoboken currently has available. Check out the school ratings on this site and poke around.

Best of luck!
0 votes Thank Flag Link Mon Oct 10, 2011
I have been investing in real estate for over 25 years and have made plenty of money from it - so I have considered each purchase I've made as an investment. My tendency is to move out and buy another, leaving my old home for rent. As well, in taking advantage of market cycles, I have been able to sell at a substantial profit, thus increasing my down payment on the next property, and putting me into positive cash flow when I rent it. From my prospective, all real estate is an investment because of how I handle it. I am always looking at the upside down the road.

The reason they are non-neogtiable is that it doesn't sound like you have a buyer's agent. This is unfortunate, as you would not have had to pay a buyer's agent (I'm a realtor and even I used a realtor when I bought my first JC home as I didn't know the stats and cycles in this area - and I know that can mean a $25000 mistake easily). Now that they have their hooks in you, they won't let you use one, won't negotiate, and are delighted there is no one in your corner. A Comparable Market Analysis will help, and you can do one on your own - call me and I'll hook you up with the tax records, and give you the three or four parameters you need to look at inside them. Sorry bud, a buyer's agent would have been the best deal for you, but this is second best.

David Leonard
Weichert Realtors
(718) 915-2855 (cell)
(201) 333-4443 (office)
Web Reference: http://www.davidleonard.biz
0 votes Thank Flag Link Mon Oct 10, 2011
Hi there,

When you are talking about investment, there is a major point that needs to be made. Buying a home is rarely ever an investment, in the financial sense, as you would need to relocate the tenants in order to sell it. :)

I know people often refer to buying a home as an investment, and though it could be a guard against inflation, it is difficult to justify it in terms of pure investment. With that said, if your goal is to benefit from tax advantages on principal mortgage payment, it may not be a bad idea.

All in all you would have to compare it to rent and utility expenses (in a rental scenario) on the one side, weighed against taxes, monthly fees, unicluded utilities, and the interest portion of mortgage payment (in a home ownership scenario), which likewise do not contribute towards your equity. If the later are greater than the rental scenario expenses, it would make little sense from a financial standpoint.

I am not saying there is no value to home ownership and the pride or comfort they provide, but just looking at it from purely the economic perspective, it would not be worth it.

If you need an assessment whether this particular property price is justified, please let us know and we would be happy to provide you with a Competitive Market Analysis (CMA) at no cost.

Amos Elroy, SFR (Short-Sale Specialist Certified)
Residential Real Estate Investment Consultant
Lic. Realtor Associate
EXIT On The Hudson Realty
(888) 462-6573 / (888) HOB-NJRE
FAX (888) 462-6573
Office 201-437-0411

Twitter & Facebook: HobNJRE
Web Reference: http://www.HobNJRE.com
0 votes Thank Flag Link Sun Oct 9, 2011
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