Wednesday, December 30, 2009

Hoboken Real Estate Monitor's Open House Map

The map is refreshed through Thursday afternoon so be sure to stop by again before your weekend search.

Sort by price, number of bedrooms or day of week!

The Hoboken Real Estate Monitor Open House Map is a great tool for starting the real estate purchase process. Walk around Hoboken on a Saturday or Sunday afternoon, looking at real estate. Get an idea of what your dollar can buy, in what part of town, with what amenity level.

By subscribing, you will be able to not only get the basics - price, number of bedrooms, and street location but will get the unit number, and the full Multiple Listing Service listing with photos, square footage and more. . . .

Monday, November 9, 2009

Should I Buy Now - Part II

You are making some progress towards making a decision about purchasing a one-bedroom in Hoboken. What are some of your must-haves? Do you really need an elevator? Is a certain area of town important to you because of access to public transportation – PATH in the south, buses – midtown Manhattan in the north? Or, do you have some flexibility and looking for the most value for your money. Let’s take a deeper dive into one bedrooms that have sold in the last few years, and then evaluate what is on the market today.

You really want an elevator building

There are a few marked differences between sales of elevator versus non-elevator units in the Hoboken market.

  • Geography – Elevator buildings are almost exclusively located in the northeast and southwest sections of Hoboken.
  • Price Point – In the northeast, buyers paid 46% (~$135k) more on average for a one bedroom with an elevator in 2009. In 2008, that premium was 35%, off a high of 60% in 2007. In the southwest, the price premium was 63% (~$227k) in 2009, versus 38% in 2008. Currently average prices for active properties are about $490k in both the northeast and southwest, but southeast properties have about 5% more square feet on average. Any price advantage in the southwest has been eliminated by the market.
  • Price Trends – In the southwest, average prices for one bedroom elevator buildings are actually INCREASING year-over-year for the last four years, and 2009 is no exception. The northeast, however, has seen some significant softness, but prices are beginning to increase.
  • DOM (days on market) – 20% fewer days on market in the northeast, at 47 DOM, and 50% lower at 39 DOM in the southwest. That potentially makes the bidding more competitive, but also bodes well for resale.

One Bedrooms without Elevators

  • Geography – There is inventory all over Hoboken.
  • Price Point – The average price for three bedrooms without elevators across Hoboken is about $350k, regardless of quadrant.
  • Price Trends – The biggest price drop has been in the northwest, but all one bedrooms in Hoboken are showing a decline in 2009.
  • DOM (days on market) – Properties on the west side of town are moving at least 25% faster than properties on the east side of town. Interestingly as well, the southwest has the most inventory. This area has seen tremendous renovation and rebirth, and the newer properties seem to be drawing some shrewd buyers who feel they are getting more bang for their buck. The southwest may be an area to hunt for some real value in one bedrooms.

In summary, if you are looking for a one bedroom in Hoboken, with or without an elevator, all neighbors, on average, are currently priced the same realtive to each other. So now may be the time to make the pruchase in what you previously perceived as a premium neighborhood, or a chance to really focus on the specific amenities that are important to you – such as outdoor space, washer/dryer, parking, etc. – to find the right home. Take some time to look through some of the current active listings on the market as of Sunday, November 08, 2009 , or call us and we will be happy to create a custom house tour so that you can see what is the on the market for yourself.

With & Without Elevators

Thursday, November 5, 2009

Is now the time for you to buy?

Are you a first time buyer, looking for a second property or a trade-up? Can you take advantage of the extended tax credit to finally close the deal? The current tax credit, which expires November 30th, 2009, offers $8,000 in tax credit – which is a dollar-for-dollar reduction in your tax liability – for first time buyers. However, currently there is an income limit of $75,000 for singles and $125,000 for couples. (See on the Housing Tax Credit Extension.) It is likely that this credit will be extended to April, 2009, with higher income limits of $125,000 for singles and $225,000 for couples. This $8,000 can be used for improvements to your home, or even to effectively reduce the monthly cost of ownership by $667 per month for your first year. That’s a nice incentive to help you establish your own homestead. And the extension may well include a $6,500 credit for buyers who have been in their current home for over 5 years, so those of you looking to trade-up, well, now may be the time.
Over the coming weeks, we will take a look at the history of property sales in several Hoboken neighborhoods to understand the various sale prices and days on market trends for the last several years. Then we will look at existing inventory to help you “hunt” to find the right home for you.

Looking for a one bedroom?

One indicator of whether the market values a property at its listed price is the number of days on market. It is a gauge of how robust the market is, so let’s take a look at the trends by quadrant to see which has the most movement. As you can see, 2007 had the lowest average days on market for one bedroom sales in Hoboken. Overall in the 2009 tend seems to indicate properties are moving faster, but the northwest quadrant has the fastest moving one bedrooms in town this year, followed by the southwest quadrant. What could be driving this trend?

It has to be the price....

Not to be too obvious, but so far this year, the northwest condominiums are showing an 18% percent price decline over one bedrooms sold there last year. That is more than double that of any other area, so the sellers here are motivated to move and that is reflected in the price. That’s a real motivation to buyers, and if you look carefully, you may be able to find the right home for you.

So overall, what will a one bedroom in Hoboken cost you today? Here is a one bedroom listing that is on the market today. Click for One Bedroom Listing

Next week, we will look at how various amenities impact the price by quadrant and highlight a couple of specific units in each area.

If you have any immediate needs, please call us – we are happy to help you in your search for your new home.

Sunday, October 25, 2009

One, One-Fifty, Two-Fifty - Cost of Luxury

Hundred, that is. That is how much incremental monthly maintenance you should expect to pay for each an elevator and a doorman in one, two and three bedroom condominiums in the north east section of Hoboken. In other words, if you are looking at a one bedroom unit in a building with an elevator and a doorman, expect to pay two-hundred dollars a month more in maintenance fees that a one bedroom in a brown stone or conventional building.

So what if you want a third bedroom? From a three bedroom, two bath perspective, there are two specific properties on the market in the north east section of Hoboken, as of October 24, 2009.

MLS # 90008783 – has been on the market for three and half months at 1500 Garden, unit 9G is listing for $1,499,995. This unit has a monthly maintenance fee of $1,162, is 1,910 square feet which puts it at $785 per square foot.

Contrast this property with the only other three bedroom on the market, MLS# 90013090 – which just came on the market this week at 2 Constitution Court. This unit is listed at $949,000, has a monthly maintenance fee of $958. And is 1,343 square feet, putting it’s price at $707 per square foot.

There are eight other three bedroom units each with three bathrooms on the market in north east Hoboken currently. The average statistics for these units are: Avg Price $1,244,489; Avg monthly maintenance $916; Avg square feet 1,861; and Avg price per square foot $669.

So while the 1500 Garden Street property is larger, is that much more living space worth the incremental $550,000 to you? Is a three bedroom, three bath unit more appropriate for you? Only you know how a space fits the needs of you and your family. We will be happy to schedule a showing of any of these properties and help you evaluate which unit is right for you.

Thursday, October 22, 2009

Maxwell v The Constritution - How do they Compare?

As you can see from the chart, The Constitution has a better price per square at $537 v. $595 for Maxwell Place. Having said this, there is a relatively small number of sales and the difference can be the unit placement within the building of those used in this study. These are all the 2009 sales in the both buildings including those that did not go through the multiple listing service. I do feel this is a good sample and we'd see the same trends year over year between the two buildings.

Maxwell Place has better layouts and kitchen finishes. Many of the layouts in the Constitution have enclosed galley kitchens and parquet floors which are not as popular today as open plan kitchen-living room layouts and satin finish straight hardwood. Maxwell Place also has small balconies on all units. The space is small but it's one additional features that is not reflected in square footage but boosts the price per square foot in the end.

As you can see from the pictures below, Maxwell uses dark finish cabinets and light countertops that open to the the main living area. The next pic is of the standard kitchen installation at the Constitution - white appliances and cabinets in a galley kitchen style. The last pic is of resale kitchen in one of the Constitution's penthouses - lovely country design but still cut off from the main living space.

This is part 2 of 4 on our series on the cost of Luxury. Stay tuned for our review of the Tea Building and the Garden Street Lofts.

Friday, October 16, 2009

What Does a Doorman Cost?

The north east end of Hoboken is punctuated with luxury buildings. Are the amenities, such as doormen, worth it to you as you assess where to invest for you and your families future? Let’s see what historic sales data can tell us.

What does a doorman REALLY cost? Two bedroom units that sold in 2008 and 2009 with a doorman sold for 75% MORE than units without doormen, translating to a greater than $100 per square foot differential. One bedroom units with a doorman are actually seeing a better premium in price in 2009 versus 2008, with a lift of 62% higher sale price than non-doorman buildings in 2009, versus 51% in 2008. Are the units bigger? Sure you are getting on average an extra 400 and 125 square feet for two and one bedroom units, respectively. That translates, on average, to $325,000 more for a two bedroom unit and $200,000 more for a one bedroom unit in buildings with a doorman.

Will my property be worth more or depreciate less in a doorman building? For a one bedroom unit, the extra amenity may help your relative market position. The PERCENT change in value two bedroom units is about the same, at 7% less for each of the last two years. One bedroom doormen units did slightly better in terms of holding onto more value a 7% decline versus 13% for non-doorman units.

So what else is your money buying? It’s not just the doorman that drives the value. Buildings with doormen almost always also have elevators, many have exercise rooms and laundry in each unit, and for two bedroom units, an additional second bathroom.

Clearly lifestyle and overall amenities are key factors in making a decision to purchase in a luxury building and only you can determine if they are worth that investment. Whatever your needs, we can help you find the ideal unit for you.

Harborside - How do agents assist clients in making a bid?

How Do Real Estate Professionals Develop a Price Recommendation When Assisting a Buyer in Making an Offer

The first thing a real estate professional will do to help a client decide what to offer on a home, is to find comparable sales (comps). You have to look at a comparable building if not the same building, location within the building, finish level, square footage and view. And then, we calculate the price per square foot.

Here, is an analysis of Harborside Lofts. This is a building where some were sold in pre-construction (sales in 2007), after the developer obtained the certificate of occupancy in 2008, and we start to see resales in 2009.

Notice how unit 'F'- the north east corner unit has the highest price per square foot. This is because is has the most expansive views of the Hudson River. In the diagram, notice how I have the Hudson River Cove marked. This is where the Hudson River dips in to the west and hooks around to the north ending at the Riv Point Condominiums creating a Cove. This is great because it provides water views for unit 'G' as well. Notice how unit G has the next highest price per square foot.

Also notice how the price per square foot varies over time. Unfortunately, I think all of us are all too well aware of the stock market crash of October 2008. That means anything that went into contract before October of 2008 would not be a valid comparable because that was a different market. Banks typically won't use comps that are older than 6 months. In the event of a market changing event like the crash of October 2008, they could easily change their policy that the comps have to be newer than that or the buyer has to put more down. In fact, that's what we saw last year, even with 3 good comps, the market was so unstable banks were requesting 25% down on a conventional mortgage (and/or to avoid private mortgage insurance)and were trying to get 4 comps. Some transaction that began before October but were still in progress were required to get an additional comp, have the appraiser re-assess the same comps or both. So, "recentcy" is a big factor in determining whether or not a comp is valid for developing an offer..

So, once we have recent comps for the building or similar building,taking into account floor level . . . .(without an elevator the lower floors are worth more, in an elevator building the upper floors are worth more). In the case of Harborside Lofts each floor you go up is worth about $10,000. Use those comps to determine the price per square foot. Take the square footage of the unit you are looking at and multiply it out.

9G is for sale. 2G is the most recent comparable sale from the building with a closing date of August 1st of 2009 for a sales price of $1,062,000 or $556/square foot. 9G has the same square footage as as 2G but it's 7 floors higher or should sell for $70K more. Will it sell for $1.132MM? We are going into the dog days of Winter. Will it sell before the close of the season at what price? Check back in 3-6 months and let's see how the sellers did in selling this unit.

Harborside has great views even to the west. It has a park to the west of it and the new park at 1600 Park Ave. should be in sometime next year. The small patch of land just to the north of Harborside Park has been donated by the developer to Greenacres so even to the west, homeowners enjoy unobstructed views including the beautiful Palisades Cliffs. These units have a lower price per square foot.


This article is one of our 4 part series on Hoboken's Luxury buildings. How much is luxury worth - Concierge, gym, pool, roof deck, parking? Read the series and find out.

Thursday, October 8, 2009

Sunday, October 4, 2009

Hoboken Real Estate Sales by Year

This is a great graph that shows how the spring culminates in the highest sales. All of those properties listed in February and March close before the Summer. Home buyers want to get in their new home over the summer. People are busy with summer outings to look at real estate.

It also shows the peak years of 2005, 2006 and 2007. Conversely, the poorest year is 2009 which means that prices are down. Is it the bottom?

Hoboken Residents by Age

Weekly Market Statistics by Quadrant, ending 9/30

Weekly Stats 9-30-09-Updated

Sunday, September 27, 2009

Mortgage Rates Hold Steady

The average rate on 30-year, fixed mortgages held at 5.04 percent for the week ended Sept. 24—down from 6.09 percent a year ago, according to Freddie Mac.

Interest on 30-year, fixed loans has declined in the past three weeks, according to Freddie Mac chief economist Frank Nothaft, and the Mortgage Bankers Association reported a 13 percent increase in application volume last week.

Other rates performed as follows:

15-year fixed loans dipped for the week from 4.47 percent to 4.46 percent.
Five-year hybrid adjustable-rate mortgages were flat at 4.51 percent.
One-year ARMs fell from 4.58 percent to 4.52 percent.

Friday, September 11, 2009

Weekly Hoboken Real Estate Market Statistics

Here is a preview of the kind of statistics we will be posting each week. We are getting the format and presentation down. We have divided hoboken into 4 quadrants - NE, NW, SE and SW and show how price per square foot changes by neighborhood. We are also looking at a number of amenity combinations, elevator, no elevator, parking no parking, pool, gym, etc. So, please stayed tuned as more is coming. . . . .

The topline looks like the 'bottom is hardening'. The number of units for sale is down, fewer price reductions, fewer new listings. Maybe we can believe the news that we are starting to see the end of the recession? Let's hope these trends continue.

* 482 active Hoboken condo units today - 513 last week.
* 18 price reductions vs. 14 a week ago
* 12 dabos (under contract) vs. 13 last week
* 20 sold vs. 17 last week.
* 14 new listings vs. 21 last week
* 14 expired listings vs. 9 last week
* none withdrawn vs. none last week

Monday, August 31, 2009

Two Real Estate Investment Trusts Register to Go Public

NEW YORK, Aug 28 (Reuters) - Two real estate investment trusts filed for initial public offerings on Friday, bringing to eight the number of applications since early July by REITs created by real estate companies seeking to take advantage of the distressed commercial property market.

Brookfield Realty Capital Corp, will originate, invest in, and manage, a portfolio of commercial mortgage loans and is seeking to raise up to $500 million in a deal to be managed by Goldman Sachs, according to a prospectus filed with the U.S. Securities and Exchange Commission.

Brookfield said it will use the proceeds from its IPO to originate and acquire mortgage loans, and mezzanine loans, and possibly commercial mortgage-backed securities.

The REIT will be managed by a wholly owned subsidiary of Brookfield Asset Management Inc.

Another REIT, Marathon Real Estate Mortgage Trust, filed on Friday to raise up to $300 million to invest primarily in mortgage-backed securities, mortgage loans and other real estate-related loans and securities.

Marathon will be externally managed and advised by Marathon Asset Management LP, which in July was among nine fund managers chosen by the U.S. Treasury to take part in its Public-Private Investment Program, or PPIP, designed to remove from banks' balance sheet "toxic assets" whose values have been crushed by the financial crisis.

Other PPIP managers that have created REITs and filed for IPOs since July include AllianceBernstein (AB.N), and Invesco Ltd (IVZ.N).

Marathon's IPO will be led by Credit Suisse and JP Morgan.

Investors have shown renewed interest in IPOs by REITs. The largest U.S. IPO of 2009 was by Starwood Property Trust Inc (STWD.N) which raised $951.5 million earlier this month.

Neither of the two latest REITs set terms for their IPOs, including the number of shares to be sold or the timing, although both said they had applied to list their shares on the New York Stock Exchange. (Reporting by Phil Wahba; Editing by Tim Dobbyn)

Wednesday, August 19, 2009

Unemployment Spike Compounds Foreclosure Crisis

The country's growing unemployment is overtaking subprime mortgages as the main driver of foreclosures, according to bankers and economists, threatening to send even higher the number of borrowers who will lose their homes and making the foreclosure crisis far more complicated to unwind.
This Story

Unemployment Spike Compounds Foreclosure Crisis
Special Report: Foreclosure Prevention Program

Economists estimate that 1.8 million borrowers will lose their homes this year, up from 1.4 million last year, according to Moody's And the government, which has already committed billions of dollars to foreclosure-prevention efforts, has found it far more difficult to help people who have lost their paychecks than those whose mortgage payments became unaffordable because of an interest-rate increase.

"It's a much harder nut to crack, unemployment," said Mark A. Calabria, director of financial regulation studies at the Cato Institute. "It's much easier to bash lenders than to create jobs."

During the first three months of this year, the largest share of foreclosures shifted from subprime loans to prime loans, according to the Mortgage Bankers Association. The change to prime loans -- traditionally considered safer -- reflects the growing numbers of unemployed who are being caught up in the foreclosure process, economists say.

Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, has proposed using $2 billion in government rescue funding to provide emergency loans to these borrowers. "We are going to be seeing more foreclosures because of prolonged unemployment," he said. "These are people who weren't in trouble and wouldn't be in trouble if they hadn't lost their job."

Unlike the borrowers with subprime mortgages who helped ignite the housing downturn more than two years ago, Deepak Malla, 42, fell behind on his payments when his information technology job was shipped overseas late last year. He does not have a subprime loan, and he made a 20 percent down payment when he bought his five-bedroom house in Ashburn in 2005. The payments were affordable -- until he lost his job.

Last year, about 40 percent of borrowers who sought help at NeighborWorks, a large housing counseling group, cited unemployment or a pay cut as a primary reason for their delinquency. Now it is about 65 percent. The number citing a subprime loan fell significantly.

"Rising unemployment, for the sake of this downturn, has magnified things considerably," said John Snyder, manager of foreclosure programs for NeighborWorks. "It's less about the payment adjustment."

When a subprime borrower becomes delinquent because of a hefty payment increase, the fix often involves lowering the interest rate to its original level. Unemployment poses a more difficult challenge, industry officials and consumer advocates said. During extended periods of joblessness, the borrower accrues large late fees that drive up monthly payments. And a new job often comes with lower pay, making it more difficult to catch up.

When Malla landed another job earlier this year, he took a pay cut of more than 25 percent. He launched a six-month campaign to get Wells Fargo to lower his mortgage payments from $3,500 to reflect his new financial reality, but he was rebuffed repeatedly. "I wanted to work out with them based on my current scenario," Malla said.

He considered refinancing his mortgage, which had a 5.8 percent interest rate, but his home's value had fallen significantly since the market peak, making that impossible. Instead, the lender recommended that he sell the house in a short sale. That would mean selling for less than he owed and walking away with nothing.

"They didn't say why -- just that [a loan modification] is outside the investor guidelines," Malla said. "I was very, very frustrated." (After being contacted by The Washington Post, a Wells Fargo spokesman said Malla does qualify for a loan modification after all.)

Banks and government regulators are studying how to address the shifting nature of the crisis, which has been exacerbated by falling home prices. When the housing crisis began in 2007, the unemployment rate was about 4.6 percent. It hit 9.4 percent last month, and many economists expect it to reach 10 percent by the end of the year.
This Story

Unemployment Spike Compounds Foreclosure Crisis
Special Report: Foreclosure Prevention Program

Hope Now, a government-backed group of mortgage lenders, has established a task force to look at how to best help unemployed borrowers; one strategy involves creating new types of loan modifications. The Obama administration is also studying the issue as it considers how to make its foreclosure prevention program, known as Making Home Affordable, more effective.

Many housing experts say it will take more than the $75 billion the administration has already said will be spent on foreclosure prevention. Several economists at the Federal Reserve Bank of Boston have proposed creating a government lending or grant program for unemployed borrowers, lowering their payments for up to two years while they look for work. Such a program could cost $25 billion annually and help 3 million homeowners, lowering their payments by 50 percent on average, according to the economists' proposal.

Currently, unemployed borrowers have few options to save their homes. Banks often will allow two or three missed payments, known as forbearance, to give borrowers time to find a job. Others offer to temporarily lower their payments by 50 percent. But both of these options are not permanent and are ill-suited to the current crisis, consumer advocates and industry officials say.

Part of the problem is that it is taking longer for borrowers to find new employment -- a three-month suspension of payments often is not enough. The number of unemployed people who have been looking for a job for more than 26 weeks rose more than 500,000 last month. And under the current system, once borrowers resume payments, their monthly balances rise to make up for overdue amounts.

"Who knows what's going to happen at the end of the [forbearance], even if they can get it?" said Paul S. Willen, senior economist for the Federal Reserve Bank of Boston.

Citigroup established a test program for unemployed workers in March, offering to lower their payments to $500 a month for three months.

But few of the 600 or so borrowers who have qualified for the plan have reported that they were able to find new jobs, and Citigroup is considering lengthening the period, company officials said. The test has shown that borrowers are at their most motivated shortly after losing their job, so the company may also lift a requirement that homeowners miss at least two payments to qualify for assistance. No decision on the changes has been made, company officials said.

The program has reinforced Citigroup's conclusion that "unemployment is in fact the root cause of many of the delinquencies," said Sanjiv Das, chief executive of CitiMortgage. The trick, he said, is to give borrowers enough assistance to keep them motivated to find a job quickly so they can resume making full mortgage payments.

Under the federal foreclosure prevention program, unemployment insurance can be counted as income when a borrower applies for a modification. But the borrower must show eligibility for at least nine months of unemployment checks.

Bill Kachur of Jacksonville, Fla., lost his job as an online training instructor for a large government contractor in January and began scrambling to protect his four-bedroom home, purchased in 2000, from foreclosure. He has been able to scrape together enough to keep up his $850 monthly mortgage payments by liquidating his retirement and investment accounts to supplement his unemployment benefits of $1,200 a month.

"I had to do it," said Kachur, 47. "If you have bad credit, you can't get another job."

Kachur estimates that he has enough for only a few more months of payments, but because he is eligible for more unemployment benefits, he is lobbying his lender, Bank of America, for help. A modification under the federal plan would cut his payments nearly in half, he said.

He said his requests have been denied so far.

Bank of America said it could not comment on Kachur's specific case. The company complies with the federal foreclosure-prevention plan, including considering unemployment benefits when appropriate, spokesman Rick Simon said.

But a workout faces other tests, including whether a loan modification or foreclosure is better for the investor, he said. "It has to meet all the other guidelines as well," Simon said.

FHA Loans Hit a Speed Bump

Frances Katzen, an executive vice president at Prudential Douglas Elliman, was elated when she found a buyer for the one-bedroom she was representing in a Lower East Side condo conversion. The transaction went awry, however, when the buyer learned at the closing table that the financing she had been counting on had fallen through, thanks to an obscure loophole in guidelines by the Federal Housing Administration: Loans insured by the FHA currently cannot be issued in a condo conversion until at least one year after the condo has been declared effective. The buyer "got all the way to the closing and was told that the mortgage was not issued," recalled Katzen, who now refuses to work with FHA-insured loans, despite the fact that the government-backed mortgages are exploding in popularity.

"We're reading about FHA loans, but we're finding it very difficult [for buyers to get them,]" she said. "It's been a very trying time, and disappointing."

The obstacle Katzen encountered is only one of many obscure and ever-changing regulations that make FHA-insured mortgages nearly impossible for many New Yorkers to obtain, brokers said.

With conventional financing elusive, many developers are undertaking the lengthy and expensive process of having their projects FHA-approved, believing it will give them a leg up on sales amid the credit crunch.

But even as the once-rare program becomes more widespread, brokers and developers are discovering that FHA-insured loans are not all they're cracked up to be. What's more, changes to the agency's guidelines slated to become effective October 1 will drastically reduce the number of eligible buyers for the program by capping the number of FHA loans in a given project at 30 percent, even in FHA-approved developments.

"It's horrible what they're proposing," said Philip Sutcliffe, a Pennsylvania-based consultant who specializes in submitting new condo projects around the country for FHA approval. "It's bad public policy at a point when the condo market can least afford to have restrictions placed on it."

Loans insured by the FHA, an arm of the U.S. Department of Housing and Urban Development (HUD), provide lenders with protection in the event that the homeowner defaults. Because the lenders bear less risk, FHA-insured loans require smaller down payments — sometimes as low as 3.5 percent — and allow buyers more flexibility on income, credit scores and payment ratios. In exchange, buyers pay an insurance premium on the loan, which in some cases makes their monthly payments higher than conventional loans.

Until recently, FHA loans were rare in New York City because most homes here cost more than the agency's maximum loan limit. For the same reason, New York developers here generally avoided the expensive and time-consuming process of seeking FHA approval for their new condos, especially since the easy credit markets of recent years made it easy for buyers to get financing from other sources.

But the FHA this winter raised its maximum loan limit here to $729,750 as part of the national stimulus package, making FHA loans more accessible for New Yorkers.

"Six months ago, nobody knew about FHA," said Richard Bouchner, managing director of Commodore Property Group, a mortgage company and real estate brokerage. He said that's changing now that conventional financing requires higher downpayments than in the past, adding that he's gotten several inquiries from buyers looking for FHA programs.

"Most people see FHA as a kind of shining light, something they didn't think they would be able to get," he said.

Meanwhile, many developers recently have rushed to get FHA approval for new developments. Projects that have already been approved include 111 Monroe in Bedford-Stuyvesant, 105 Lexington Avenue in Clinton Hill, NV in Williamsburg, Hamilton Lofts in Harlem and 10-50 Jackson Avenue in Long Island City.

The program is seen as the savior of many of these projects, real estate insiders said.

At 111 Monroe, "I don't think we would have any deals or any potential deals if we did not have FHA," said David Behin, an executive vice president at the Developers Group, a marketing and sales firm that is in the process of merging with another company, the Real Estate Group New York. It has encouraged its developers to get FHA approval. "It's been an enormous help for us."

FHA loans are also gaining in popularity nationwide, according to Adam Glantz, a spokesman for the New York bureau of HUD, who said they are being tapped more frequently by homebuyers across the country, filling the void left by subprime lending.

In 2006, Glantz said, FHA backed only about 3 percent of home loans in the country. Now, that number has swelled to at least 30 percent.

In New York City, the number of FHA-backed loans issued between January and March of 2009 leaped to 2,315, up from 995 in the same period of 2008, said Glantz.

But many New Yorkers are now discovering that securing an FHA-insured mortgage is more difficult than it may first appear.

The program has a raft of often-inscrutable guidelines, many of which disproportionately impact New Yorkers. For example, the FHA does not currently insure loans for purchases of co-ops, Glantz said.

Another obstacle for New Yorkers is that the FHA does not back loans in buildings where the board of managers may exercise a right of first refusal on units being sold. While the practice is rare in other parts of the country, it's very common here, removing FHA loans as an option for many buyers.

New York is "one of the only states that have right of first refusal language in the documents," Sutcliffe said. "We have thousands of projects all over the city that have a right of first refusal."

In response, Sutcliffe said, developers of many new condos are rushing to remove the option from their offering plans.

"I'm working on about 100 projects in New York City, and in every one of them, the offering plan has to be amended to remove the right of first refusal," he said. But it's too late for purchasers of older apartments in buildings where the board of managers already has the right of first refusal. For them, getting an FHA-backed loan isn't an option.

Then there's the one-year delay for condo conversions, which stipulates that if a developer is converting a building from a prior residential use to condos, FHA will not back loans in the building for one year after the condo declaration has been recorded, Sutcliffe explained.

On top of these complications, buyers often don't know until the last minute whether they are eligible for FHA financing because the loans are manually underwritten, Bouchner said.

With Fannie Mae and Freddie Mac, buyers can input their information into a computer and get a formal preapproval. With FHA loans, buyers "don't know if they've been approved until their file gets in front of an underwriter," Bouchner said. "It's a bit frustrating."

He added, "FHA is this really weird, opaque part of the mortgage world." Starting on October 1, FHA is changing some of its guidelines, Sutcliffe said. The one-year minimum for conversions and the right-of-first-refusal requirements will be removed, but they will be replaced by a far larger obstacle: Under the new guidelines FHA will no longer insure more than 30 percent of loans in a given building, even if that project has been FHA-approved.

The change could hurt the condo market because for buyers unable to afford large down payments, "FHA is the only game in town," Sutcliffe said.

It's particularly problematic because FHA-insured loans require 51 percent of the units in a project to be in contract. If only the first 30 percent can get FHA loans, "how are [developers] going to sell the other 20 percent of the units if [they] don't have the financing they need?" Sutcliffe said. "It's almost a self-fulfilling prophecy."

Manny Alvarado, an FHA specialist at HUD, said the agency put the limitation in place to limit its risk in case a project fails. "We're looking at reducing our exposure," he said.

The rule change presents a roadblock for developers who have spent time and money to get their projects FHA-approved and are now depending on FHA-insured loans to help their buyers get financing.

"It's a death blow," said Moshik Regev, the vice president of Absolute Development and the developer of the Prospect & Homes Condominiums at 1236 Prospect Avenue in the Bronx. "They're taking the last market niche that's still out there, and they're going to kill it."

The 18-unit development, where the average purchase price is $250,000, was pre- approved for FHA loans last year, and all but one of the buyers in contract plan to use FHA financing, Regev said.

"It wouldn't be possible for [buyers] to do it without FHA," he said. "To cap the units at 30 percent, it's ridiculous. To me, in this day and age, to do something like that is just terrible."

He said he has an option to buy and develop two lots, one in Brooklyn and one in the Bronx, but he and his partners have put the plans on ice for the time being as a result of the rule change.

"At this point, we put them on hold," he said. "We don't know what's going to happen."

Sunday, August 2, 2009

American Recovery Act - $8,000 Obama Rebate

  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000, whichever is less.
  • The tax credit is for first-time home buyers. Those who have not owned a property in 3 years are considered 1st time buyers.
  • The tax credit does not have to be repaid, provided the homeowner occupies the property as his/her primary residence for the first 3 years following the date of purchase.
  • The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit*.
* Partial tax credits for those with incomes over the above limits may be available. Consult your tax advisor for details.

Sunday, July 19, 2009

How to Figure Out if Condo Fees are Appropriate for a Given Building.

When looking at a condo especially in Hoboken, you need to consider whether or not the condominium associations has strong 'financials'. What does this mean?

Does the building have appropriate maintenance dues to cover the cost it the associations annual budget? In any budget there are expenses that occur every month or every season, commonly referred to as normal operating expenses and then there are long term costs such as a new roof or new water main line. These expenses that occur every few years are typically called capital expenditures. When assessing whether or not an association is appropriately funded, you need to take into account whether or not it is appropriately saving for these longer term, 'every once in a while' expenses. The building should also just have some ready savings around for the unexpected e.g., a tree that falls on the building in a storm.

To figure out how much a condo has to pay in maintenance and to assess if it and the reserve amounts are enough to be considered in good standing, take the budget and divided by the total square footage of the units in total and then multiple by the square footage of the unit you are considering divided by 12 to get the monthly rate.

Look at the budget. Are they just allocating operating expenses are is there any estimate for upcoming capital expenses?

The amount of maintenance dues will vary with the building's amenity level. If there are employees dedicated to the building such as full time supers or concierge or if there is an elevator or other like a pool the operating budget will be higher per square foot. Elevators, pools and employees push the cost up significantly due to the need to bring in skilled maintenance people, insurance and employee benefit costs.

Another big factor to consider when evaluating the condition of the financials is the condition of the building. Has the building been kept up? Or are there many capital expenditures coming? A new roof for a 25 foot wide, 75 foot deep tenament building is in the $6-8K range. A new watermain can cost about $10K. Repointing the building is another expensive cost. Are the windows the responsibility of the individual owner or the association? So, it's important to know when these common element items were last updated. Your inspector will help you evaluate the effective age of these items and your real estate agent can help you with looking at the financials.

Hoboken real estate has a mix of old and new properties. When buying a unit in an older building, you should expect more maintenance projects. You should also expect that the condo association has been saving for them all along. Newer Hoboken real estate developments may have more services that push up the maintenance per square foot.


Monday, June 22, 2009

American Recovery and Reinvestment Act of 2009 - How Does the $8,000 Tax Credit Work

  • The tax credit is equal to 10 percent of the home’s purchase price up to a maximum of $8,000, whichever is less.
  • The tax credit is for first-time home buyers. Those who have not owned a property in 3 years are considered 1st time buyers.
  • The tax credit does not have to be repaid, provided the homeowner occupies the property as his/her primary residence for the first 3 years following the date of purchase.
  • The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
  • Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit*.
* Partial tax credits for those with incomes over the above limits may be available. Consult your tax advisor for details.

Thursday, June 4, 2009

Vote for Zimmer - Keep Hoboken Real Estate Taxes Down, Values Up

Hello all,

We are in the final minutes of overtime in the mayoral and council seat superbowl. We have an opportunity to make a huge sea change in Hoboken's amazing history. Dawn Zimmer and her slate - Ravi Bhalla, Dave Mello and Carol Marsh represent a true break from the corrupt, self serving, incompetent leadership of the past. It's not about BnR v Newcomer....It's small, corrupt, self-serving, politically connected v everyone else.

I urge you to make arrangements to be in town on June 9th and to come out and vote. Polls open at 6:00 AM.

I have been highly engaged in the council meetings, debates, white papers and articles that have been written about Hoboken's tax situation and management. I am voting for Dawn and her slate not for any other reason but I believe she will take the actions needed to right the town. She will stop the fleecing by not having more employees than needed, saving for infrastructure depletion and deferred compensation. True transparency, accountability, responsible spending on just what we need, controls and measures, job descriptions, management that makes Hoboken Directors and employees responsible for managing to our approved budget and to ensure Hoboken residents get value for their tax dollars and we stop selling tomorrow for today.

Ravi Bhalla is a competent, seasoned attorney that does not represent developers, not connected to the machine and will help Dawn pass the resolutions and ordinances necessary to ensure quality decisions.

Dave Mello a teacher and union member but in NY - so no conflict of interest. He also is a law school grad. He has experience in corporate America before making his career change which gives him a really unique perspective. He understands how to operate in large organizations, he had responsibility for generating business and as such has financial and analytical skills. He also understands the union worker, those that go into a craft because they wanted to make a difference. He understand the nature of a public service job and understands both sides - accountability and fair deal for the tax payer and employee.

Carol Marsh a veteran to politics and a certified city clerk can bring immeasurable knowledge of the legislative process, civil service law and years of community service. Immeasurable considering the procedural screw ups that have prevented the currant administration from holding many accountable.

Peter says one thing and does another. He lies about his record and Dawn's . . . .

Peter Cammarano's is preaching about a platform that he has never practiced. His platform is the same as Dawn's in many ways - reduce taxes, go green, smart development, reduce mismanagement by holding people accountable but that is not the way he has voted nor is it reflective of who is supporting him nor it reflective of the specific tactics he would take to meet those platform promises.

Go to for a comparison between his record and his platform..... He is lies blatantly. Don't be fooled.

~25% of his campaign contributions are coming from developers, wifes of developers, law firms that represent developers. Another 18% comes from unions and PACs that are pro-union (why do you think they endorsed him - cause he is going to keep their gravy train coming). see for a breakdown of his campaign contributions. Peter Cammarano has virtually never voted against a development proposal even when the proposed project didn't ensure that the developer would put in necessary infrastructure that the development would need only shoving that onto the tax payer. The development in the south west was done on what was a wetlands. How is anyone shocked that land that is lower than the Hudson River floods when in a hard down pour. A gravity driven system that expels extra water into the Hudson river won't drain when the water level is lower than high tide. The wetwater pumps alone will cost $40MM not to mention an ecological solution for retaining sewage from being pumped into the Hudson River. Those developers should have had to pay for that. The vast majority of the land under the SW Park and the Western Edge Development projects are owned by LLCs that lead back to developers such as Taragon Ursa - Pupie Raia was a board member. Applied has given him contributions including access to the W for his fundraisers (yes, the underlying owner of the W is the Applied Company - a development that got a PILOT for what? Do you know how many wanted to put a hotel in Hoboken? We could have had a hotel put in here without given out the tax subsidy. Eugene Finn wanted to make the buildings over Amanda's a bed and breakfast years ago. He made several attempts to get the variances and he wasn't going to change the height or structure of the buildings and he still was told no - guess he didn't make the right campaign contributions.)

Peter goes on and on about how the state take over caused the tax increase ---- no Peter, no. It was excessive spending, the obscene increase in the employee base that drove the budget number up. The only reason why Roberts made his budget numbers the year before is because he wasn't paying bills for things like employee health benefits and he took a loan out on the municipal garage - kind of like taking out money on your credit card and only paying the minimum. The state monitor put out a budget that was based on our obligations that Roberts created not for the hell of it. The state take over has reduced the employee base by over 100 positions to approximately 440 - still about 70 more than the Russo Administration and she has put together a great strategy for the union contracts under negotiation. Can you imagine what shape we would be in if the state didn't come in and stop Roberts?

See my post for all the benefits of the takeover -

He puts forth only two ideas to cut expenses - staying clear of talking about personnel which is 80% of our budget (remember he has huge campaign contributions from unions). He talks about the reserve for uncollected taxes and how that is $10MM that he can 'give back' to taxpayers. No, Peter, no.... that cannot go to 0 not in the worst recession since the great depression. It maybe able to be reduced to half, let's say $5MM and if we have not used it this year. It's a one time item in a ~$100MM budget.

The other had to do with bringing the legal department in house in lieu of using contractors. Law is very specialized and I think we would loose money overall if we hired an internal team to handle everything from litigation, to labor negotiations to land use. It's to analyzed whether or not that would save or just add back bodies to the payroll.

Peter is also very junior. Given his age of 31/32 and the fact that it takes at least 3 years to go through law school and pass the bar. He has a total of ~5 years work experience. He is an associate which means he does not manage a staff nor does he have direct PnL responsibility. Would you put your $100K company in the hands of someone who has so little real world experience? The Mayor's role is not an entry level job.

His slate:

Morales is a newly minted attorney that has a total of 3 years work experience compiled in between school. The council positions are not entry level roles. He should go off and do volunteer work at the school or the rec program or helping implement something like the Paris grant. Why does he think he can start at the city council level? What? We are going to let him make a dozen financial decisions with our tax money and then see what he brings to the table. The son of an SVP at the Applied Company, he is obviously a candidate who is there to vote in the favor of developers not the taxpayers. Applied is below it's affordable housing obligation...Will he vote to make them meet it?

Addeo - A union representative who lives in Church Towers as a 'surcharge' payer indicating he makes more than $120K. Do you think he will work with federal and state agencies to ensure that our affordable housing programs are properly administered? The original Church Towers HUD program had a provision where everyone in the building would be re-qualified periodically just the way it's done in low income housing. It obviously was not. 40% of the building makes more than the upper limit of what would be allowable to enter the building. If this feature were utilized an additional ~120 units would be available for entry level police, fire, crossing guards, teachers, kids just starting out in NY, etc. This is especially important since the Applied company has completed its affordable housing program uptown and has not renewed with a new program. Neither has Church Towers for that matter. How will a pro-union guy represent the taxpayer? Will he help the mayor and council negotiate with the unions to bring their total compensation more in line with market equilibrium and comparative towns??? Doubtful. It's another sign that if Camm gets in he will put back all of those extra jobs and lucrative comp and benefits packages that Judy has/is restructuring back on the books. He was also previously appointed by Russo and has connections to Dominick Lisa who refused to recuse himself on the Piccardo D variance even after he was advised to the contrary by the ZBA attorney.

Alicea - He was fired as a the commissioner of the Hoboken Housing Authority because he didn't pay bills on time. Why do we want him making decisions regarding our tax dollars.

We need Dawn and her slate to right this ship. She needs to have enough support on the Council to get ordinances, resolution and enforcement through.

I urge you to vote. The reason why this municipal featherbedding and wasteful spending exists is because municipal workers and their families vote and the general taxpayer doesn't. The polls open at 6:00.