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Re: The Pandemic
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Home away from home
 
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It took decades and very broad demographic trends for the 70's to happen. Not saying its impossible, but there's very little data pointing in that direction. The great coastal cities are so absurdly overpriced they have a VERY long way to fall! That said, I would not be surprised at a long term >25% correction here. The "natural" price of property should be at an equilibrium such that both renting and buying homes makes sense exclusive of the appreciation of said home. The cap rates of commercial and residential property have diverged dramatically for decades now. Time was it was normal to buy a small rental property for 4-6 times it's rent roll. That hasn't been seen in a long time outside of distressed assets.
Posted on: 2020/5/12 19:26
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Re: The Pandemic
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Home away from home
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I don't discount possibilities. But for now I just suspect a bad period. It's not like it's never happened.
Posted on: 2020/5/12 18:42
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Re: The Pandemic
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Home away from home
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Apocalyptic prognosticators of all kinds never take feedback loops into account. As prices drop the rust belt looks less attractive and all the people who always wanted to live in the city but couldn't afford it are suddenly in the market.
Posted on: 2020/5/12 16:52
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Re: The Pandemic
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Home away from home
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So by 2025, Jersey City real estate will look like this:
Posted on: 2020/5/12 14:14
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Articles I just read on LinkedIn addressing this exact issue:
https://www.linkedin.com/feed/news/cit ... losing-its-shine-4848580/ And the Bloomberg article: https://www.bloomberg.com/news/article ... cost-cities?sref=2Wo6zJsr
Posted on: 2020/5/11 21:50
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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What attracted businesses to the city wasn't office space, you can find that out in central Jersey or White Plains or any number of suburbs. It was the skilled workers who want to live in the city, with it's exciting & stimulating lifestyle. Nightlife, art, music and cuisine. That will not change, it will all come back eventually after Covid.
A friend with perfect timing moved to Stroudsburg PA 10 weeks ago. But she and her partner never cooked, they lived off the rich variety of restaurants in Astoria. Maybe they will learn to love cooking, but maybe their lifestyle just took a major turn for the worse even though they now have more room than they know what to do with.
Posted on: 2020/5/10 16:08
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I think the article points to the beginnings of a tsunami which will engulf the whole economic climate.
Today I watched an interview with the new CEO of IBM. He was thrilled with the fact that ninety-five percent of IBM's workforce were no longer, figuratively speaking, at their desks. The global mishandling of this crisis--the shutting down of the world's business economy -- will allow a view and a way into a world that was probably years away, but is now on our doorstep: Buildings housing a workforce are now so old school. Can the current workforce be viewed as necessary? What right thinking corporate head is not going to look to cut costs by not building brick and mortar housing or renegotiating lease arrangements? Business are being run in a totally new way. The Geek Squad is lighting the way to major changes. When commuting ceases by a large margin the auto and energy industries will be impacted. Business reliant on centers of economic activity (food, entertainments,clothing etc.) will be hurt and so on and so on. What will the inevitable end turn out to be?--a socialist state. Bernie--they stuck it to you again. it must hurt a little more this time if you can read the tea leaves.
Posted on: 2020/5/10 1:14
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Interesting article. No doubt many more people may be working from home..but social distancing could mean that companies may not significantly reduce square footage since they may require more square foot/spacing between employees. It will be interesting
Posted on: 2020/5/9 1:10
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
Joined:
2005/6/8 3:24 Last Login : 2022/11/28 0:04 From New Urbanist Area
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1429
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More on how telecommuting may affect commercial real estate long term.
https://www.nytimes.com/2020/05/08/tec ... Spotlight&pgtype=Homepage
Posted on: 2020/5/9 1:05
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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You may be or are probably right about the health club phenomena. But I have to say, I really, really miss going to my gym. If there was a vaccine and my gym opened tomorrow I would go back immediately. I very much like working out. I've been exercising regularly at home and taking two 20 mile bike rides a week. Still I miss all of the equipment at the gym, the people and the energy. I have my work friends, most of whose last names I don't know. But they're part of my life routine. Only time will tell. Quote:
Posted on: 2020/5/8 15:00
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I suspect commercial A & B grade office space is going to be seriously affected in the coming 12 to 24 months. My company is one of many I found out that has been doing employee surveys, which seemed to be geared towards, "can we keep this work from home permanent". I am sure the cost of rent is a major motivating factor. My wife commented that her company is more productive with everyone not going to the office, utilizing online web conferencing instead. Plus she saves 2.5 hours a day in round trip commute time. I doubt she is alone in this assessment.
Another area I suspect is going to get hit is health clubs. For months, I have had gym equipment sitting in a virtual shopping cart, waiting for my budget to allow purchase. Tried to purchase it last week.. Everything is sold out... in fact, the entire damn company is sold out of just about everything. Turns out this is happening industry wide with companies that make weights, stationary bikes, etc. If you just invested $5k in a home gym, are you going to bother with a gym membership ever again?
Posted on: 2020/5/8 12:16
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Well I qualified it as anecdotal. But I still suspect things are going to change. I don't claim to have a crystal ball. I just can't believe things will go back to normal and urban life will be the same. I don't believe real estate values won't drop significantly over the next 18 months. Again, I'm not saying this is absolutely correct. It's just my theory. I'm a home owner in JC with a lot of equity on my home. It would not make me at all happy to see this. It's just my fear right now. Quote:
Ah, the Yvonne method of trying to prove things -
Posted on: 2020/5/8 1:20
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Ah, the Yvonne method of trying to prove things - "I heard something from someone once 20 years ago". Try having her fax you a new set of talking points next time.
Posted on: 2020/5/7 22:39
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I am declaring commercial real estate as dead, dead, dead for the next few years. Just in time for the payroll tax that was suppose to fund Jersey City schools.
I'm willing to bet that many large companies will forgo costly office space leases and instead invest in work from home technologies to track their employees.  The above image is from https://www.squarefoot.com/ny/new-york/manhattan/office-space and provides information on the amount to lease a sqft of office space in Manhattan. It's going to be cheaper to relocate to the burbs or a no income tax state and fly in staff for necessary meetings rather than pay the office space rates. Time will prove me right or wrong.
Posted on: 2020/5/7 19:46
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Wow - -you must be right about the crime increase in the case as you've given us your source of 2 liberal friends who live in Manhattan.
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Posted on: 2020/5/7 19:19
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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The notion that crime has increased came came from two different liberal democrat friends of mine who live in Manhattan. They've reported anecdotally an increase number of muggings on the streets and on the subways. It's an apparent result of De Blasio releasing low level criminals from prison. One is a CFO of a small biotech start up and the other the CIO of a large law firm. The CIO has been living in Manhattan since 1978.
Posted on: 2020/5/7 18:41
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Umm, a month or 2 is not "long"! Homeowners aren't selling in a panic and flooding the market. They're sitting tight, waiting it out as best they can, hoping it'll blow over. Look at the graphs from 2008 how badly it hit incomes and equities, but how slowly the housing markets actually fell. What it takes is someone trying to buy a house and the bank looks at the most recent comps from desperation sales and says "you're paying more than it's worth, we won't give you the LTV you want". Then the prices spiral down.
Posted on: 2020/5/7 18:22
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Except crime isn't really increasing: https://www.politico.com/states/new-yo ... l-break-ins-spike-1281986 Conservatives are eager to see the city die and are cooking up horror stories to try and convince people that the 70s are back.
Posted on: 2020/5/7 18:01
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I agree with you in principal. However, there has already been a long period of excessive unemployment. What we don't know is the extent of the reduction in many peoples' income in reduced commissions and bonuses, though they may be still employed. A lot of people more recently paid top dollar for homes and then put in like $500k of renovations. It's going to be hard for a lot of people to hold on. Also, let's not forget the added real estate tax burden. To add insult to injury, I've been hearing about increased crime in NYC.
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Posted on: 2020/5/7 17:20
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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Prices drop WAY slower than that when shit hits the fan! Only people who absolutely have to sell do, everyone else sits tight. So new comps at lower prices appear very slowly while properties sit on the market and sales are very slow. It took till 2012 for prices to actually bottom out from the 2008 bubble bursting.
Posted on: 2020/5/6 23:33
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I absolutely this will have a long lasting impact on the commercial real estate market. For one, I think a lot of organizations will be relocating at least in part out to the burbs and many more people will work remotely.
Not at all unrelated friends of mine who own an apartment in the West Village and a house down the Jersey shore have advised me that on April 1, the relocated to the Jersey shore house because apparently of an increase in crime, mostly muggins in NYC. An apparent consequence of the decision to release some inmates. I think that's going to be a hard thing to reverse. I think this will only further push people to leave urban areas.
Posted on: 2020/5/5 22:39
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
Joined:
2005/6/8 3:24 Last Login : 2022/11/28 0:04 From New Urbanist Area
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Beyond the immediate crisis of the pandemic, will this effect commercial real estate, specifically offices, over the long term?
Lots of people are now telecommuting. Many will want to continue that. Down the road will we need so many glass tower office spaces?
Posted on: 2020/5/5 20:13
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Quite a regular
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For what it's worth, there have been some sales in the past 30 days in downtown JC at prices not much lower than what we were seeing before: a 1-bedroom at Liberty Harbor for $535K, on Newark Ave for $560K, on Greene for $586K.
I've heard similar anecdotes in other markets, from people who hoped to have a dip to buy into and didn't see one. It may be that the market hasn't yet realized some structural changes that might dampen demand for urban living, like working from home and the inconvenience of living through regular lockdowns in a small apartment. However, it may also be that people just want to live in cities; they were willing to put up with a lot of inconveniences and very high prices before, perhaps this is just another challenge of city life that many people are willing to tolerate.
Posted on: 2020/5/5 15:43
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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that will be very interesting to see.Quote:
Posted on: 2020/4/26 13:55
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I am wondering if we will see for commercial properties, where there aren't often escrow accounts, a large number of missed tax payments for this coming quarter.
Posted on: 2020/4/25 16:26
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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That, and half capacity is a death sentence to any restaurant.
Posted on: 2020/4/24 13:03
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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I don't even know how we could be thinking about this at this juncture. The new COVID numbers in JC are still stubbornly high.
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Posted on: 2020/4/23 21:55
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
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https://www.nj.com/hudson/2020/04/reop ... ess-mayor-fulop-says.html
"On restaurants: "What we?re looking to do now is change the capacity inside, so that tables are far apart, bars spaces are far apart ? that would entail a reduction of 40 to 50% ... of maximum capacity. We?re going to try to offset some of that ... by expanding outdoor seating, ... where possible to take away parking spaces. ... ?People don?t like losing parking, but if your are trading off keeping a business in the neighborhood, that?s a worthwhile tradeoff.? Haha, so the NAs lose even when they should have a win. Less parking for more outdoor seating? Win win. Maybe we get more permanent pedestrian areas because of this.
Posted on: 2020/4/23 18:42
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Home away from home
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Posted on: 2020/4/23 18:09
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Re: The Pandemic's effect on the Jersey City and overall Urban Real Estate Market
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Home away from home
Joined:
2017/1/3 18:17 Last Login : 2020/10/12 20:58 From Jersey City
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As Jclist fades to black, I like to think the last post will be a rant from Nick about Yvonne and the evils of Neighbourhood Associations. I don't think any GoFundMe could be large enough to cover the much-needed therapy.
Posted on: 2020/4/22 12:47
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