A Thaw in the Condo Market


GLASS TOWER Alyssa Brennan, near left, shows apartments at the year-old 269-unit Crystal Point condominium in Jersey City, where 15 contracts were signed in February. In the month before, there had been only five sales.

The New York Times
By ANTOINETTE MARTIN
Published: March 11, 2011

LAST month a few strong blips indicated a quickening pulse on the New Jersey condominium market. Or maybe just a pulse.

There were 15 sales in four weeks at one building in Jersey City, 6 at another, 5 at a Hoboken building where sales had been lagging ? even a premarketing sale at a town house development in Livingston.

Portents of a spring revival? Or a mere minitrend that will melt with the last of the snow?

?Ha! That?s the $64 million question, now isn?t it?? said Dean Geibel, the chief executive of Metro Homes, who described February as the best month in two years for his two buildings ? Gulls Cove in Jersey City and Metro Stop in Hoboken.

?This is not an uptick in prices,? Mr. Geibel added. ?But the increase in sales is still huge, because it has been so slow for so long. It raises the question, ?Is there going to be a traditional spring market with a widespread uptick?? ?

Angela Ferrara, a vice president for sales of the Marketing Directors, which handles sales at Crystal Point in Jersey City ? the building with 15 signed contracts in February ? said it was possible that the month?s sales represented an anomaly. ?To us, however,? she said, ?it looks like momentum is building up for March, April, May.?

In January, there had been just five sales at Crystal Point, a year-old 269-unit glass tower set 25 feet from the riverbank. ?One a week; that?s less than we look to do,? Ms. Ferrara said, while emphasizing that the weather was especially bad in January.

Then the surge occurred, in four weeks when there was still two feet of snow on the ground. Contracts were signed on seven one-bedroom units, six two-bedrooms and two three-bedrooms, Ms. Ferrara said.

Asking prices at the 42-story tower, designed with floor-to-ceiling glass in every unit, range from the mid-$500,000s to $1.265 million. A total of 212 have sold, 191 of them closed, which means the building is nearly 80 percent committed. Marketing began in mid-2009.

Why would the sales heat up in February? Ms. Ferrara suggested that one reason might be concern over mortgage rates? climb beyond 5 percent, and over their potential to rise significantly, and fast, when the economy improves. About 60 percent of recent buyers at Crystal Point are employed in finance, she said, and therefore probably likely to keep a close watch on trends.

Also, she added, a tight rental market in New Jersey is probably a factor. The statewide vacancy rate is at a low 6 to 7 percent, according to market analysts; price breaks and other incentives have largely been abandoned; and monthly rates are starting to rise.

?In the rent-versus-buy scenario,? Ms. Ferrara said, ?when people take tax benefits of ownership into account, we are now seeing some urgency of people deciding to buy.?

The Marketing Directors agency, based in Manhattan and Hudson County, brokers both condo and rental buildings. At Peninsula at City Place in Edgewater, a development with both types of housing, rents were recently raised 5 percent.

Meanwhile, condominium prices remain depressed. Over the last year, the average price in Jersey City dipped by 13 percent, to $467,297, according to a Marketing Directors analysis.

Virtually no new condominium projects have been started in the last year and a half in the state; the town house in Livingston that sold before marketing had begun is part of a 10-unit expansion at Livingston Town Center, the mixed-use development by the Roseland Property Company.

?There are very few condos in Livingston,? said Debra Tantleff, the vice president for development at Roseland Property. ?That means the market for the lifestyle we are making available at Livingston Town Center is continually in demand.? But Ms. Tantleff thought the snow might be figuring in as well: ?It was such an intense winter,? she said, that homeowners are again seeing the advantages of condo living.

In Livingston, where the town houses will have an average of 2,000 square feet of space, and at Roseland?s 40 Park building in downtown Morristown, which is similarly spacious, ?we are seeing people who, six to nine months ago, were not ready to downsize and give up their homes, now saying, ?I really don?t want to take care of all that anymore.? ?

Condo brokers, Ms. Ferrara and Mr. Geibel included, all pointed out that the current inventory backlog of condos was slowly shrinking.

Gulls Cove is now 90 percent sold, Metro Stop 80 percent, Mr. Geibel said. The huge Trump Plaza Residences building in Jersey City ? which Metro Homes built, but lost control of during the housing finance crisis of 2009 ? is 82 percent sold, he said.

One of the five units sold at Metro Stop in February went to a woman from Livingston. ?She fell in love with a specific unit, and asked me if I could hold it for her, because she had to put her house on the market,? he said.

?I told her we couldn?t do that, but then she came back a week later ? and she had sold her house. It was only a week, but that condo was already sold. Luckily, I was able to put her in a very similar unit two floors below that one, and everyone is happy.?

He added, ?This is the kind of story I haven?t been able to tell in a while.?



http://www.nytimes.com/2011/03/13/rea ... s.html?_r=1&ref=newjersey