There is something drastically wrong with your case study. Paulus hook for $293 per sq foot. Either you are in the wrong neighborhood or you have your numbers wrong.

Im an active licensed realtor with access to all the MLS's, please post the addresses and or mls #'s.

Someone mentioned the JC heights guy. I think you were referring to me?

As far as investing or buying to live, condos are always 1st to get hit. I buy multi families only with cash flow. Condos are not my thing. Condo conversions on the other hand thats a different story.

your right I did "have a heart attack",but it was when my accountant told me that Im getting all my tax money back and leftover rightoffs for next year. Not to mention I was still able to get one of my properties refid and it appraised within 10% of 1 year ago. The power of real estate.

I Lowered my payments rolled into 30 yr fixed and pulled out $50,000. My tenants are paying the monthly nut and some.

By the way I havent dropped the price on ANY of my rentals and they are moving surprisingly fast.

please keep renting.

Your neighborhood landlord

This rule is true when the economy is good enough for people to stay or keep coming. If the trends regarding NYC unemployment hold true (eg NYC currently doing worse than its surroundings) and people start leaving, then I am not so sure...

It would be nice if the monthly carrying costs for a house were similar to a rental but don't hold your breath especially in supply constrained markets.

Even if the cost of owning starts coming into line with rents, which they obviously have not, would that be an indication that buying makes sense?

First, you have the downside risk. The property could lose value. Second, you have maintenance costs. Third, you have the risk of rising property taxes, which could be quite rapid as we saw in Hoboken recently. Finally you have the decreased mobility associated with owning, including the transaction costs of selling the property. (realtors fees, transfer tax)

In order for it to make sense to buy I think property prices would have to fall to somewhere actually below the cost to rent. Maybe 10 percent below rental costs.

yep agree completely, i have been saying that since the crisis began - renting in certain situations is much better, your example is a good one. Of course dont let that jcheights guy hear you, he will have a nervous breakdown again.

The maintenance and tax kills any bargain there might be in downtown, unless you pick some really old non-highrise non-"luxury" buildings.

Your main point aside, 1250 sq feet, 2br/2ba for 450k in paulus hook? I havent followed the market here for a couple months but looks like the prices did drop quite a bit in downtown. Those type of apartment are in the 500-600k range just half year ago, 450k in paulus hook you were only able to get a 1BR.

For a prime example, look at Port Liberte. I love everything about that residential area and the apartments/townhouses they have for sale. Prices were pretty reasonable too in comparison. I would bought something there a long time ago if not for the taxes and maintenance. a 750 sqf 1BR cost $700 maintenance and $600 in taxes. So you are paying $1300 a month, the rent for the same 1 BR goes for $1800. Seriously boggles the mind.

So I just went to an open house and to me, it represented exactly why some places in the Jersey City real estate market (NOT ALL places!) will have a very hard landing.

Our first victim condo is a lovely unit situated in a somewhat older building in Paulus Hook. This particular unit has 1250 sq feet, 2br/2ba with somewhat of a waterfront view (if you press your face to the window and crane your neck around to the right) and lets not forget that this is a "luxury" building (whatever that means) so you get a Pool & a health club. Asking price $450k.

Now, for Paulus Hook, you think to yourself, "$450k, that's not so bad, I could put $90k down (20%) take out a mortgage for $360k at 5% and my payments would only be $1932/mo!" Wow, housing really *is* becoming affordable... Not so fast! Taxes a little under $9k/yr so add on another $750/mo and monthly maintenance is another $650/mo. The good news is that for all that you do get a parking space (Awesome!), bad news is, you have to pay maintenance for the parking space (not so awesome). I didn't get a number on this last bit, but it's safe to assume that's at least another $100 bucks a month. Apparently you can get valet parking $275/mo -- In this economy?

So add it all up and your monthly cost to own this place is around $3,400+/mo. And now for the really bad news, another 2br place about a block away which admittedly is about 300sq feet smaller with a direct view of the statue of liberty just rented for $2150/mo.

OK, yes, I'm leaving out the part where you get back some of your living expenses come tax season, but even still, would you rather rent, or buy?

An even more egregious example was the 3br/2ba unit nearby... 1700sq ft place (that needed a fair amount of work) offered at $499k...that works out to $293/ft! Remember when $500/ft was considered reasonable for jersey city? What's even more jaw dropping though is the taxes are $14,300/yr and the maintenance is $1,000/mo! So without even getting a mortgage, you're paying out $2200/mo. ($4350 with a mortgage). I doubt you could rent it out for over $4k/mo... Maybe if the taxes got reassessed you could make it work, but otherwise, I just don't see it working...

Am i crazy or are things still not very cheap? Maybe on a relative basis (relative to 2yrs ago) they are cheap, but are they cheap on a stand-alone basis? Maybe my problem is with the taxes & maintenance on these things and not the value of the real-estate itself...

Any thoughts?