End of the year stats

So there are, as of 12/28/09, 441 residential properties for sale on the MLS.

Of those: 138 are one bedrooms
234 are two bedrooms - the lowest priced being 615 square feet and listed at $275,000 and the most expensive being a townhouse at 1126 Maxwell Lane at $2,207,000
45 are three bedrooms ranging from $469,000 at 1300 Park to $1,272,995.00 at 1125 Maxwell Lane (the new building at Maxwell Place)

DABOS (units sold but not yet closed) is way down from last month at 105 condos. It was about twice that last month.

It is not really a concern that the sales have slowed in December. Real estate is, of course, seasonal...sales drop off considerably from late October through January. But the DABO number is worth watching for the long haul..it is one of the best indications of the sate of the real estate marketplace.

What's the News? Tell me what's happening!

Ok, here are the stats on the current market. We are proud to say at Singleton Galmann Realty LLC that we sold six of the nine houses sold in the last six months and 4 out of 5 of the houses priced over 1 million:

CURRENT ACTIVES
One Bedroom condos 169 active
Two Bedroom condos 295 active
Three Bedroom condos 63 active

ONE BEDROOMS
DABOs (under contract)
lowest list price 109,900 - highest 925,000 at 225 River St.
Median price $360,000
SOLDS 46 sales in the last six months at $359,000

TWO BEDROOMS
DABOS
lowest list price $275,000-highest $685,000
Median $485,000
SOLDS 69 sales in the last six months at a median price of $539,000

THREE BEDROOMS
DABOS
9 DABOs lowest list $670,000-highest $1,112,875 median list $789,900
SOLDS 9 SOLD in last six months at a median price of $649,000

ONE FAMILY HOMES
16 ACTIVE on the market (including the very small house on Willow Terrace)
$645,000-$2,495,000 median $1,049,000
DABOs 3 DABOs $599,000-$1,299,000
SOLDS 9 Solds $782,000-$1,538,000
Median price 1,236,000

The Bottom

Speculation is still circling around whether or not we have "hit bottom". I have read market reports that insist the real estate market will still drop 10%. Meanwhile, markets like those out west and in the mid-west, markets that have been in crisis for years, are starting to see a low but steady recovery. Overall, the National Association of Realtors reports a sizable increase in sales in the last three to four months. Certainly the $8000 federal credit might have helped. The Spring was lukewarm here in Hoboken, but the summer was a bit better than expected. Of course, no one knows if we have "hit bottom" but the freefall has certainly stopped here in Hoboken. Though I do not think we will see any increase in prices any time soon (prices having dropped 20$ from the height of the market), I don't think we will see a further decline...I think we will hold steady where we are now. That is just my opinion, now twelve years in the business.... for what it is worth.

Window Of Opportunity

Hoboken has two strong selling "seasons": Spring and Fall. Spring is the stronger market overall and starts in mid-February. It usually peters out by around Memorial Day. Sometimes, there is a flurry of activity that continues to the 4th of July. This year, we had more sales in the summer than was typical due to a slow increase in optimism among buyers and a huge drop in prices from the year before. August, though, is a very dead month. After Labor Day, properties once again start to hit the market but most buyers are only looking until the Holidays. Sellers often take their properties off the market during the holidays and relist them in the Spring, if they can. It is very slow until Feburary.

Though we don't anticipate a huge jump in market values next Spring, I believe that this Fall may be the bottom of the market. If you are looking to buy, now is the time. If you are looking to sell, this is your window of opportunity, now until November. After that, the next strong market won't be until late February.

Gate Sales and Block Parties

In the early Fall, as most Hoboken residents know, much of upper Hoboken, the blocks above 7th Street on Bloomfield St, Garden St, and Park, will be having block parties on the weekend. This is a good time to get out and meet the neighbors. It is also a good time to find pictures, vases, small tables, etc. at the gate sales if you need to stage a vacant or near vacant house or condo. And it is also a great time to put your stuff out in Hoboken to declutter your home if you are getting ready to put your place up for sale or for rent this Fall before the holidays and winter slow-down.

Short Sales

What is a short sale? A short sale is when the seller of a property arranges with the bank holding the mortgage to agree to take less than the home is mortgaged for in order to complete a sale. This is happening now because buyers purchased homes that have now lost approximately 20% of their value since the height of the market approximately a year and a half to two years ago.

So let's say that a couple bought a home for $660,000 and it is now worth about $560,000. They are being relocated to Atlanta. They put 10% down at the time of purchase. They would need to take a loss of about $35,000 and then the price of the realty commission, transfer tax which is about 1% of the purchase price, and the attorney fee. So they are now looking at an additonal loss of $22,400 at a reduced realtor fee of 4%, $5600 transfer tax and about $1400 for the attorney fee. Therefore, they could be looking at having to bring to the closing table about $63,400 just in order to get rid of the property and move on.

That's a lot of money.

Short sales do affect one's credit but they are a possibility to avoid foreclosure, which is much worse for one's credit rating. If you have to move and renting your property is not going to be pheasible for you, then it may be your only option if you don't have the funds to close on a property that has lost significant value since purchased. It is cumbersome because banks do not want to do it, but it could save both you and the bank substantial money in the long run.

I will be taking a course in short sales this October. Most realtors in Hoboken are not well-versed in this problem but I believe we will see more of these before our market fully recovers. It is an excellent opportunity for buyers but it requires great patience and perseverance on the parts of the sellers, buyers, and realtors.

Where are the rentals going?

The rental market is a clear example of supply and demand economics. There is a glut of available rentals, many of them condos, and though the demand was once very high in Hoboken, it is not as high as it once was...not high enough to get all these rentals rented at the higher numbers that they once commanded. Even luxury buildings have seen a decline in their rental prices. Of course, much of this is due to the perception of the public that this is a buyer's/renter's market. Many renters do not want to pay a fee also.

Landlords need to realize that the prices last year do not apply. Rents are down 15% or more. Also, paying a half fee to a realtor, will often get the job done. If your realtor is willing to eat half the fee, and you pay half the fee as the landlord, it is much more likely that you can get the rental rented quickly.

Landlords with tenants in place should definitely consider lowering the rent from last year in order to keep good tenants, despite the recent tax increase which you would normally pass on to the tenants.

We all have to take financial hits right now to keep things moving, but apartments are renting, as long as the price and fee are right.

Current Market Statistics from the Hudson County MLS- 8/29

500 ACTIVE listings
173 studio- 1 bedrooms
263 - 2 bedrooms
58 - 3 bedrooms
6 - 4 bedrooms

DABOs (recently under contract but not closed yet)
56 studio to 1 bedrooms
82 2 bedrooms
18 3 bedrooms
2 4+ bedrooms

SOLDS (within the last three months which is particularly important for appraisal purposes)
53 studios to 1 bedrooms
ranging from 450 square feet to 1135 at the Garden Street Lofts
$270,000-$535,000

102 2 bedrooms
ranging from 872 sq ft on the cheapest unit to 1900 sq ft on the most expensive
$300,000 to 1.8 million at 225 River St (the W hotel) but other highest unit was 78 Jackson at $925,000
12 3 bedrooms sold
ranging from 1261 sq ft to 2018 sq ft
$465,000-$930,000

Hoboken Rentals on the Hudson Country Multiple Listing Service (MLS)

Currently, there are 109 rentals on the Hudson Country MLS for Hoboken alone! As you might know, rentals used to be housed in-office, jealously guarded and rented by the listing office and rarely shared as a co-broke with another office.

But times have changed! The rentals on the MLS start as low as $1390 and go as high as $9500. Only twelve of the rentals are listed at $3500 or above. And rental prices are negotiable, which was never the case before.

This is a reflection of the glut of condos on the market as owners try not to sell during a down market and fewer renters...too much supply and not enough demand. If you are thinking of renting in Hoboken, now is the time! Landlords are even considering dogs! If you are an owner, be prepared to have to negotiate on the price and possibly kick in on the realtor fee to get your place rented. Rental prices are also about 20% down since last year.

How do you time a sale?

Timing a sale is not always easy...a sudden work transfer can make it imperative or a private school contract could hold you back. In Hoboken, the two best times to put a property on the market are Fall and Spring. Spring starts as early as mid-February now and the market activity largely dries up by June 1st, beach season. This year, the busiest months in our office were April and May and the first half of June.

Our slowest time of year is August and January. These months are dead slow. I anticipate new properties and activity will pick up after Labor Day. During the real estate "seasons" is the best time to sell...more buyers out there, more market interest, even though there is greater competition as well.

Three rules of timing an efficient sale: try to put your place on the market during the height of the Fall or Spring season, in the best condition possible given your budget, and at a competitive price. A property has the best chance of selling and selling at a good price if you obey these three rules.

How Effective is Home Staging?

Home Staging works. It helps sell property. The more presentable a property is, the quicker it will sell. That said, the most effective way to stage is to use your own furniture, pictures, and interesting decorations (like a nice vase). Most people need to get rid of about half of their stuff....excess furniture, knick knacks, clutter. De-cluttering is key. It makes the property seem larger and well-maintained.

That said, is it cost effective to put rental furniture into a home to dress it up and kick start the imaginations of prospective buyers? I think it is a good idea on higher end properties. However, on smaller properties, I believe pricing the property correctly depending on location, square footage, and overall condition is more important. Staging is not as important as correct pricing.

Staging helps sell a property but it will not get you a lot more money, especially if the property has not been renovated lately. Buyers want SS appliances and granite countertop, wood or tile flooring in the bathrooms and kitchen.

Have We Hit Bottom?

This is the question that everyone is asking. According to the National Association of Realtors, the residential real estate home sales were up 11% in July, more than had been anticipated.

I have been in touch with realtors from other markets and I think the recovery is starting in markets where the bottom fell out long ago. We have felt the recession later than most real estate markets. However, I think it is reasonable to assume, give the recent activity, that prices are finally stabilizing after a very sudden free fall since last September.

I believe that the next six months may be the best time to buy in Hoboken for quite awhile, though I don't anticipate a sudden rise in prices either.

What do the figures mean?

I have scrutinized the numbers and here is the breakdown: the sales in one bedrooms average a price of %389,910 and a length of 90 days on the market.

The vast majority of two bedrooms sold between $400,000-$600,000. Overall, we have seen a drop of about 20% in prices from the height of the market. Hardest hit have been fourth and fifth floor walk-ups and properties that have not been renovated.

In the recent sales not closed (DABOs), the average sale price of a two bedroom, eliminating extremely large units or units in Maxwell Land or Garden Street Lofts (the two most expensive buildings in town) is about $540,000.

In the 3 bedroom DABOs, which range from 1324 to 1701 square footage, the average was $697,314 with a lengthy 118 days on the market.

In the house market, sales have finally picked up a bit. However, prices are also 20% or more off from the height of the market.

Houses

ONE FAMILY HOUSES as of 8/21/09

Active 21

DABOs 3 (all with my office Singleton Galmann Realty LLC)

Sold 6 (3 with Singleton Galmann Realty LLC)

Weekly Roundup 8/20

Current Hoboken Condo Sales in the last three months:
1 Bedrooms: 8
2 Bedrooms: 8
3 Bedrooms: 0

Current Hoboken Condo Under Contracts or DABOs:

1 Bedrooms: 55
2 Bedrooms: 83
3 Bedrooms: 18

Current Hoboken Active Listings:

1 Bedrooms: 163
2 Bedrooms: 272
3 Bedrooms: 62

What is the Value of Parking?

Today, I had a former customer of mine as me whether I thought they should buy a parking spot near their property (which does not have parking). They were offered the spot at $30,000. $30,000 has been the standard asking price for some time...years in fact. I have seen newer construction charge more, or try to, in the past. At one point, some premium luxury buildings were offering prime spots at $35-$40,000. However, it is typically $30,000. What value does that add to the property?

This is hard to say. Fewer and fewer people want properties without it, but how much does it raise the value? I am showing condos tonight where one condo is charging only $20,000 for their condo with parking over another one in the building, an identical unit, that has none. I think if someone wants more buyers to look at their place, a parking spot does that. I think if you need to sell this year when you bought in the last two years, you may need that $30,000 just to bring to the table to get out of a property now worth less than purchased.

However, if you are not moving soon and are buying parking as an investment in the future value of your property, it is a good investment...even if you don't need it. You can rent it for $250 or more a month. Would I pay #30,000 now? That depends on the location but I think there is still some wiggle room to negotiate price.

But truly, the most expensive real estate in Hoboken in parking space.

Summer in the City - The Heat is On When it Comes to Mortgages

Supposedly it is summer in the city...if it ever stops raining! The biggest problem for buyers in this late Spring/early summer market is getting a mortgage. This is creating tremendous stress throughout the industry. Well-qualified buyers can no longer get the same generous loan terms that were available a year ago. Less than 20% down is a problem if a buyer's credit is less than stellar. "Piggy-back" loans to avoid PMI (private mortgage insurance)are non-existent. Many sellers are chosing buyers with more down, even if they are offering slightly less than a competing buyer. Believe it or not, bidding wars are still taking place but now because some condos are so well-priced that the listing creates that kind of excitement...sellers are finally facing the grim reality of the market.

The good news for lower end buyers is that the rules for FHA loans have been greatly relaxed and are much more attainable. Buyers who are borrowing less than $417,000 can put down as little as 3.5% and qualify for a mortgage.

Mortgages are attainable however...do not fear! But good credit and a larger than 10% deposit will greatly improve a buyer's chances of getting a loan, however, loans are taking much longer due to greater scrutiny by the lenders.

Short Selling and Foreclosures

A week ago, I showed my first property that is a short sell. The property was selling at a lower price than it probably would have been marketed otherwise. I was told, once I got to the agency, that there was already an offer on it. Short selling is a pre-foreclosure option. It will adversely affect your credit, though not as badly as a foreclosure. When someone short sells, they put the property on the market for what they realistically think they can get for it. There is no point at all in overpricing. The idea is to sell the property and get the bank/mortgage lender to agree to take whatever you can get for the property. Sellers resort to this when they are "upside down", meaning that the mortgage they carry on the property is as much or greater than the current value, and they need to get out from under the obligation.

It is in the best interest of the bank, when the seller cannot pay their mortgage or must sell the property for other reasons, and the sellers only other recourse is full foreclosure. A foreclosure is very costly for the bank and a short sell means that they will recoop more of their money. I have heard of a few short sells in Hoboken but it is not the norm here at all, though it is becoming much more common in the suburbs. It is very common these days in areas most hard hit by the current real estate decline. In many places like Southern Colorado, short selling and foreclosures are extremely common.

Though we'll see short sells and foreclosures here, most people in Hoboken have the income to weather temporary losses which is advisable in terms of one's credit. Sellers who have bought in the last two years or added a second mortgage, have the option of renting in Hoboken. Sometimes this will mean a monthly loss, but in the long run, it is often best to wait out the current market by becoming a landlord. We are hoping to see an active market in the Spring and values rising in 2010

Reducing Your Price

Today, in the current market conditions, if your property is getting few showings in the first few weeks, it is reasonable to wait up to three or four weeks before reducing the price (in the non-holiday season, that is). Unfortunately, your greatest impact is those first few weeks, so starting too high can be the worst mistake you make in selling your home. If you have decluttered and homestaged your home to look its best, your only other option to entice buyers is to lower your price. (If the property is vacant, you should consider staging it with some furniture.) If you have made your property as presentable as possible, the price reduction is the next step. In the past, a $10,000 reduction was a-typical. Unfortunately, that is not enough to turn the heads of buyers these days. To initiate more serious and steady buyer traffic, even on lower-priced condos, a reduction should be at least $15,000 and you will still need to negoitate from there. If a property has been on the market a long time, it might be best to withdraw it and put it back on the market as new, with the new price. Ultimately, pricing your house or condo a bit lower than you might feel comfortable, from the start, is the best move. A property new to the market that seems like a good deal will still bring out real buyers and the possibility of a higher offer.