Friday, October 16, 2009

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.

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