brewster wrote:

Crazy if true. I'm sure someone somewhere has access to the data, non corporate cash purchases should be easy to flag. I'm still not buying it though. I've known some of those people, they weren't sitting on $0.5m cash.

Dolomiti wrote:
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jcwalkingman wrote:
Quotes of the day, from Barbara Corcoran, founder and owner of one of the most prestigious real estate firms in New York City:

NYC real estate may be in "a new bubble right now"
The current market "is fueled by foreigners more than anyone else".

Is that a quote, or cherry-picking? ;)

She also points out how no one really knows when a bubble might burst; how middle-class buyers are pretty much permanently priced out of Manhattan; how anything that's a 1 hour commute from the core of Manhattan will continue to gentrify; she's bullish on the property values in the foreign-owned and vacant buildings; that if you overpay today for a Manhattan apartment (even a dump), you'll rationalize it by saying the value has gone up by the time you close; that the first 1% bump in mortgage rates might generate a bump in home purchases, as people realize that low rates won't be around forever; and she highly recommends buying in Washington Heights.

In general, she sounds very bullish on NYC area real estate.


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As anyone who knows anything about area real estate knows, the NJ Gold Coast market is very heavily dependent on a trickle-down effect from NYC transplants....

Zillow's estimate for 07302 is around $660/sq ft. For Manhattan, they estimate $1670/sq ft.

If Manhattan real estate dropped by 20% today, most of the people buying in outlying areas would still be priced out of that market.

Heck, if the crash was in the right range, some foreign buyers might look at that as a good time to buy.

You're also neglecting how this overflow from Manhattan is gentrifying the outlying areas, which in turn makes them more attractive in their own right, and more robust and desirable.

What's really going on, IMO, is that DTJC is white-hot right now. Demand vastly outstrips supply, so prices are going up, inventory is low, people are getting priced out etc. The last time DT was like this, it was before a global real estate bubble popped. As a result, of course some people will assume this is a replay. But, it isn't, because there doesn't seem to be any sort of artificial underlying factors or bubble which is going to pop, as was the case in the early 2000s. We also don't have an environment where banks will lend to anyone with a pulse -- mortgage standards are much stricter today.


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In any case, my prediction is that around Q3 2016 we start to see prices erode in downtown JC. Time shall tell.

And perhaps some of us will remember your prediction. ;)

jcwalkingman wrote:
Quotes of the day, from Barbara Corcoran, founder and owner of one of the most prestigious real estate firms in New York City:

NYC real estate may be in "a new bubble right now"
The current market "is fueled by foreigners more than anyone else".

As anyone who knows anything about area real estate knows, the NJ Gold Coast market is very heavily dependent on a trickle-down effect from NYC transplants....

In any case, my prediction is that around Q3 2016 we start to see prices erode in downtown JC. Time shall tell.

JcDevil wrote:
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JGJDNYCJC wrote:

You'll be surprised how much civilian money is sloshing around DTJC and Hoboken right now.

Yup. Wall Street, love it or hate it, compensates everyone from the lowest Analyst to the CEO in a highly variable manner. It's also not exactly the most stable career in the world these days.

There are oodles of mid-level bankers and traders and technologists in their late 20s and 30s that are more-or-less priced out of the Manhattan property market, because they may be making $350k-500k/yr... but 50-75% of that is unreliable bonus money that they can't rely on to pay a mortgage. Before, they'd just rent until they made MD, but fewer and fewer of the high-level positions are opening these days. So, paying cash in a hot market seems like a pretty decent plan for these guys that are capital-heavy but reliable-income not-so-heavy.

kencares wrote:
We need to enact a 100% tax on non-resident property sales in Jersey City. The Australians, Chinese and other foreign investors are making it impossible for young families to buy anything in JC.

kencares wrote:
We need to enact a 100% tax on non-resident property sales in Jersey City. The Australians, Chinese and other foreign investors are making it impossible for young families to buy anything in JC.

kencares wrote:
We need to enact a 100% tax on non-resident property sales in Jersey City. The Australians, Chinese and other foreign investors are making it impossible for young families to buy anything in JC.

JGJDNYCJC wrote:

You'll be surprised how much civilian money is sloshing around DTJC and Hoboken right now.

brewster wrote:


And cash is not a game for civilians, at least around here. Most people don't have half a mill sitting around. Out in flyover where you can buy a SFH for $25k, maybe. I've thought about doing that with my IRA.

dtjcview wrote:
Is that the right way to look at it? Take your $400k cost/$2.5 month example. The Aussie funds are buying that property cash, generating 7.5% return gross - $30k/year. Let's say costs are $10k/year - maintenance plus tax. That's still a healthy 5%/year return with built-in principal protection (condo value) - most pensioners assume a 4% return on a sinking fund in retirement.

The value proposition looks even better if the investor/fund is building or renovating the property in the first place. That $400k property may cost $200k to create - which would create a solid 10% return on investment.

People forget interest rates are largely irrelevant for cash investors - so long as property values increase at or above inflation.

JCMan8 wrote:
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kencares wrote:
We need to enact a 100% tax on non-resident property sales in Jersey City. The Australians, Chinese and other foreign investors are making it impossible for young families to buy anything in JC.

The funny thing is some may call your statement xenophobic, but other countries have even stricter policies. China for example, makes it nearly impossible for any foreigner to buy land there.

Of course, the flip side of this is it will lower property values, as you are now telling the property owner he will have to accept lower offers than he otherwise would have gotten. It's a tricky balance, but I agree the foreigners are buying up much of the good American properties, leaving many young Americans in the dust.

kencares wrote:
We need to enact a 100% tax on non-resident property sales in Jersey City. The Australians, Chinese and other foreign investors are making it impossible for young families to buy anything in JC.

zerkski wrote:
Hey everybody, dtjcview is the only one on this thread that knows the deal. Refreshing to see some logic applied here!

tommyc_37 wrote:
Prices are artificially inflated due to an extremely low quantity of inventory for purchase, as somebody else noted earlier. There are bidding wars on mediocre properties. There really is very low inventory, for sale. Does anybody know why there is such a reluctance to build condos in these new high rises, as opposed to making them rentals? There is obviously ridiculous demand for condos.

brewster wrote:
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jcwalkingman wrote:
Here's a question: how many condo units (or what percentage) downtown are investor-owned?

Here's another: How many that are investor-held were purchased in 2006-2008? or within the last two years?

I think it's important to keep in mind that the combination of low interest rates, tax abatements from the city, and massive NJ EDA credits from the state will allow the developers of many of the large buildings currently under construction to drop net effective rents quite significantly while still being able to make a decent profit.

Show me the numbers. GRM's. Cap rates. Anything but blather. Everyone on this thread has spewed all sorts of opinion but no one uses hard numbers. Show me that investor held condos can cashflow at all. I don't believe it.

To use a common investor rule of thumb, can you buy a unit for $300k that will bring in $3k per month? Just an example I could easily find, in one building a number of $400k 1b1b's were renting for $2.5k. Mortgage (25% down, 30 yr) will be $1500. Can common charges and whatever taxes or PILOTS be less than $1k?

jcwalkingman wrote:
Here's a question: how many condo units (or what percentage) downtown are investor-owned?

Here's another: How many that are investor-held were purchased in 2006-2008? or within the last two years?

I think it's important to keep in mind that the combination of low interest rates, tax abatements from the city, and massive NJ EDA credits from the state will allow the developers of many of the large buildings currently under construction to drop net effective rents quite significantly while still being able to make a decent profit.

JcDevil wrote:
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NewportNJ wrote:
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Expand the PATH

You do know the astrnomical cost to dig a foot of train tunnel, right?

Absolutely, which was the point I was (glibly, I'll admit) making about why those areas will never be as attractive as downtown, or even Journal Square.

That said, now that we're thought-experimenting here, it would be theoretically possible to expand the PATH above ground from Journal Square down to the aforementioned areas. No real reason to do so until the JSQ area builds up, though.

dtjcview wrote:
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WDRHYMER wrote:
In my opinion there certainly is another real estate bubble, a 3 bedroom 3 bath at Portofino that might have sold for $650,000. in 2011-2012, now have asking prices over a million.
This BUBBLE will pop and it maybe later this year or early next year, but this bubble is built on cheap money and once the FED raises a quarter point, prices will drop 20%.

10% or so a year for a few years isn't exactly a bubble, and not unexpected given the credit squeeze 2008-2011. It would take something else other than (slowly) rising interest rates to cause house prices to crater.

Prices continue to trail Brooklyn and Queens and appear reasonable compared to those areas.

dtjcview wrote:
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WDRHYMER wrote:
In my opinion there certainly is another real estate bubble, a 3 bedroom 3 bath at Portofino that might have sold for $650,000. in 2011-2012, now have asking prices over a million.
This BUBBLE will pop and it maybe later this year or early next year, but this bubble is built on cheap money and once the FED raises a quarter point, prices will drop 20%.

10% or so a year for a few years isn't exactly a bubble, and not unexpected given the credit squeeze 2008-2011. It would take something else other than (slowly) rising interest rates to cause house prices to crater.

WDRHYMER wrote:
In my opinion there certainly is another real estate bubble, a 3 bedroom 3 bath at Portofino that might have sold for $650,000. in 2011-2012, now have asking prices over a million.
This BUBBLE will pop and it maybe later this year or early next year, but this bubble is built on cheap money and once the FED raises a quarter point, prices will drop 20%.

WDRHYMER wrote:
In my opinion there certainly is another real estate bubble, a 3 bedroom 3 bath at Portofino that might have sold for $650,000. in 2011-2012, now have asking prices over a million.
This BUBBLE will pop and it maybe later this year or early next year, but this bubble is built on cheap money and once the FED raises a quarter point, prices will drop 20%.

bodhipooh wrote:
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dtjcview wrote:
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bodhipooh wrote:
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jcnycjc wrote:
Not sure about the exact numbers but a large percentage of the population in DTJC area, especially Newport is Asian (Indian/Chinese).

A large percentage? How do you define large percentage? If you are claiming that a majority of DTJC is Asian, could you please provide a quote, or source, please? That sounds like a wild ass guess.

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Originally, most of this demographic is on temporary work permits but this eventually moves to green card (permanent residence). Invariably, people think of buying condos on acquiring green cards or when they are close enough to acquiring one. So, this is actually a pretty big catalyst for condo demand in the downtown area

Where did you get this?? That's not how immigration law works, at all. There is a fixed limit on how many green cards can be issued for employment reasons, and those have strict limits on a per country basis. For each country of origin there is a limit of all available green cards. In essence, nationals from any given country are limited to 10,000 employment-based green cards per year. And, for example, for someone from India, the process will take at least 4 years, sometimes longer (around 6 years).

Some grains of truth - a least in the demographics for 07310.

http://www.city-data.com/zips/07310.html

Using 07310 as a representation of DTJC is disingenuous, at best. It is a zip code that consists of that tiny sliver of waterfront starting over by Harborside Financial, extending North along Newport, and ending over by the Holland Tunnel approach area. In that particular area, you do have a large percentage of immigrant Asians. But, concluding that DTJC is mostly Asian immigrants by using population data from a gerrymandered zip code is like claiming that Manhattan is mostly immigrant Africans by looking at the data of 10026 (which is home to the so called "Petit Senegal" neighborhood, in Central Harlem).

Also, another faulty conclusion of the post by jcnycjc is that he seems to equate an Asian background with immigration status. Is he so dense as to think (and, conclude) that if you are Chinese or Indian you are necessarily an immigrant?? That's a rather dumb view. Lots of people from Indian and Chinese ancestry that live in this area were actually born and raised here. They don't have an immigration status, or a green card to worry about, because they are US citizens.