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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
 
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Well, let's not get into the Efficient Market Hypothesis too much here, or try and apply it (possibly incorrectly) to such an illiquid and complicated topic as residential real estate... but hey, you might be right, at least somewhat. I know I made my valuation decisions both based on what the neighborhood is, and what it's likely to become. That said, forward-looking is not without risk, and that risk tends to be discounted based on the fact that things may change, and that great future may not materialize.
Posted on: 2015/5/6 18:31
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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So, I agree downtown JC has a great future ahead of it. That being said, how do we know that's not already factored into the current prices/market values?
Posted on: 2015/5/6 16:59
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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I see you're an expert on real estate. ;) OK, none of us are. However, better info is out there. Zillow's listings are not comprehensive. The Najjar Group mails out JC/Hoboken summaries of MLS data, which indicates that for all of 2014, 935 condos were listed and 624 sold. In January, 82 condos were active, with an average list price of $693k, and on the market for 74 days. (Hoboken listed 1339 condos, 1016 sold, avg price $826k; Manhattan lists around 10k units, average price was $942k.) IIRC the Gannon is only 16 units, and the general agreement here is that the units weren't optimally designed, and they're asking too much. It's not a good bellwether. You also don't recognize that in many cases, adding units will make an area more desirable. E.g. right now, JSQ is not a particularly hot real estate market, but once a big luxury tower opens, the people who live there will want fancy markets and shops and other amenities. This gentrifies the neighborhood, which in turn increases interest and demand. And keep in mind that the developers have a LOT more at stake in this than you or I, along with lots of experience and access to better data. This is not to say they always make the right decisions, but they definitely know what's coming to market. If they think too many condos for sale will hit the market, they will rent out units and wait out the market. I'm fairly confident JC's real estate market will do just fine in the long term, even with all the units coming on the market. At worst, prices will flatten for a few years.
Posted on: 2015/5/6 13:34
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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I guess we are neighbors and have received the same emails. :) To me, the email only indicates a PREVIEW, which I am assuming is meant to whet the appetite of current residents and to address questions and concerns about the new building. Seeing how move ins are not slated to occur until December 2016, I don't see how they can start selling now, or in the immediate future. I think this is a way for Shuster to gauge interest and reactions to potential pricing, with nothing concrete or final in that regard until later this year.
Posted on: 2015/5/6 4:06
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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Given current historical trends, you could project that JC will see a net population increase of about 10% to 15% over the next decade. From 2000 to 2010, the population grew about 3%, but from 2010 to 2013 it is estimated to have grown more than that (~3.9%) so I think it is safe to assume a net growth of at least 10% to 15%.
IIRC, there at least 24K new apartments under construction, or already approved, so it would seem like supply will start to meet and exceed demand, which bodes well for renters. As for condos, I feel like there is still not enough of them being built. While 1,350 *sounds* like a lot (especially when compared to the paltry numbers of recent times) that would represent less than 10% of new housing stock being planned.
Posted on: 2015/5/6 4:01
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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This would be true if we didn't have tens of thousands of new units coming onto the market in the next 12-24 months, as so many are posting. That is a MASSIVE increase in supply, meaning if demand stays constant, prices will plummet. I don't think demand will stay constant, and think it will rise, but will it rise to match the massive supply increase? Time will tell.
Posted on: 2015/5/6 2:39
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Re: Is Jersey City Real Estate in a bubble?
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Just can't stay away
 
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2013/5/19 15:36 Last Login : 2020/12/4 19:27 From Paulus Hook
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That certainly is a lot of units coming online. The big question is what the developers of these buildings need to price units at in order to not become distressed. Given the current red hot market you cannot blame developers for trying to get top pricing. Everyone needs to keep in mind that the reason they start the sales so early as they will have a long time to try to get these high prices and can adjust their marketing strategy and pricing ahead of the project completion if need be. They aren't closing on units onto the buildings are completed. As has been mentioned in this thread, the Gannon is priced quite above most other condo listings / sales (which all seem to have multiple offers and are sold within days of being listed). If all of these new condos are priced in a similar manner, they really will be targeting a different demographic than what makes up the majority of the current DTJC market. Perhaps this will be some of the folks moving into the higher priced new rentals. From what I have read about 99 Hudson (which seems to make up more than half of the new units @ 760) will be on the high end of the market (similar to crystal point and 77 Hudson). I have read unsubstantiated rumors that many of the condos have already been pre-sold to Chinese investors - who knows if that is true, but I would certainly not rule it out. No matter how you slice it, the DTJC market (both rental and condo) is about to go through a huge paradigm shift over the next 2-3 years. Will be interesting to see how it all unfolds.
Posted on: 2015/5/6 2:15
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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You're welcome
Posted on: 2015/5/6 2:14
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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I foresee many of Downtown's renters who want to buy condos been priced out of their respective neighborhoods and probably ending up in Journal Square or those who do not embrace cultural diversity will be Bayonne residents!
 Rents are through the roof and that is jacking up prices in the whole city. Many of you Downtowners who rent are not going to live there for much longer. And it's not like before where people are taking loans jacking up prices, these people are paying cash or are multi-million dollar corporations.
Posted on: 2015/5/6 2:05
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ಠ_ಠ
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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Is that info pulled from public records? Were there really only 14 sales downtown in the past 30 days? (remember this is peak season) If that's true, I'm not sure how 1,350 additional new condos are going to sell in just 2 years...I know there are supply constraints right now that are distorting sales figures, but I don't see that ending well if the Toll and 99 Hudson towers do in fact break ground in the coming months.
Posted on: 2015/5/6 1:28
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Re: Is Jersey City Real Estate in a bubble?
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You can look it up on Zillow. There's a pull-down menu that will list "Recently Sold"
Posted on: 2015/5/6 1:20
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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I just realized that my last post was deleted....so I'll repeat what it said: The Oakman will be launching sales shortly (actually just got an email today asking me to contact the Oakman Sales Office to learn more about a 'pre-construction opportunity'...which I'm assuming includes pricing). Between the Gannon, the Oakman, 99 Hudson, and Toll Brothers' first condo tower (expected to break ground Q4 2015 and launch sales about 14 months from now), there will be (roughly) 1,350 new condo units added to the downtown Jersey City condo market. Does anyone know how many condos were sold in downtown in the first quarter of 2015?
Posted on: 2015/5/6 0:37
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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There's a really good point buried in that comment - rental demand drives condo demand, especially with the "selling process" of DTJC as a location. Most people moving from Manhattan or Brooklyn aren't (insane like me) going to just commit to a condo in a new city without renting for a year or two, and most people who can afford the rent prices in a place like the Art House are going to be capable, at least in theory, of buying eventually. It sure seems to be Schuster's (Art House / Oakman) and Toll Brothers' (Provost Square) strategy - lure 'em in with the rental so you can sell 'em a condo a year later.
Posted on: 2015/5/5 15:52
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Re: Is Jersey City Real Estate in a bubble?
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I was talking more about Equity REITs than private investors. The average Aussie pensioner has around $2million to invest. Agree though margins are thin - but where else do you put your money? US treasuries?
Posted on: 2015/5/5 9:44
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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The Oakman will not be ready for move ins until December 2016, so I doubt they will start selling units any time soon. They will start previewing units for current residents of the sister property (The ArtHouse JC) in the coming weeks and months. Construction of The Oakman building structure should conclude by the end of July. They will then work on the interiors.
Posted on: 2015/5/5 3:10
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Re: Is Jersey City Real Estate in a bubble?
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shore club is a nice building, right behind I would say the sugar house class of jc luxury building. However, shore club is dated. popcorn ceilings anyone?
Posted on: 2015/5/5 2:44
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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People who think trump is luxury should be patted on the back for trying. Also, true JC building quality is much better than NYC luxury building quality. For example, the sugarhouse in JC is my vote for the best luxury building in jersey city. Of course, not many people even know about it and continue to think buildings like "trump" are luxurious lolol.
Posted on: 2015/5/5 2:38
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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The Oakman has had a teaser page up for at least a month now and will probably be putting units up for sale within the next month or two. The first Toll Brothers condo building is supposed to break ground by Q4 of this year and put its units up for sale about 14 months from now. Not sure how many units they'll be releasing in each sales "phase", but altogether the first Toll Brothers building, the Oakman, and 99 Hudson will add about 1,350 +/- new condos to the for-sale condo market downtown. And another 450 +/- are planned for the second Toll condo building. Anyone know how many condos sold downtown in the first quarter of this year?
Posted on: 2015/5/5 2:20
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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Doh! I got my building names mixed up. I should have said the The Shore Club. And, btw, that building has a ton more amenities than The Gannon, and it goes for about $700/sf, which is about 25% less.
Posted on: 2015/5/5 1:33
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Re: Is Jersey City Real Estate in a bubble?
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The Laguna is a rental not a condo.
Posted on: 2015/5/4 21:08
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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Ha! Of course, that was an overly obvious statement. What I was trying to convey is that the pricing is completely out of line because they KNOW that they are (essentially) the only game in town for at least another year in the segment of new construction, for sale condos. I really hope more options come online in the next year or two, but looking at the list of proposed developments, it seems like there is nothing other than The Oakman in DTJC proper. Over in Newport, there is The Laguna.
Posted on: 2015/5/4 20:32
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Re: Is Jersey City Real Estate in a bubble?
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Yes--developers are indeed aware of the law of supply and demand.
Posted on: 2015/5/4 19:21
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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I stopped by the Gannon two weeks ago and was puzzled by their pricing. Their largest unit (a 2 bedrooms, 1 den, with 2 bathrooms) was oddly laid out (HUGE, beautiful kitchen, so-so bedroom sizes, with odd layouts, master bathroom is small, and the toilet is awkwardly placed RIGHT NEXT to the door, facing the mirror) had nice looking floors (with a nice inlaid trim) but it also had some odd design choices (lights embedded into a crown moulding - that looks tacky, to be honest) and they were asking TOP dollar. I was not at all impressed with the building, the unit, or the prices. I think they *know* there is a dearth of condo options in DTJC and hoping to capitalize on that. The Oakman is not slated for move ins until December 2016, so there will not be many more new, for sale options until then.
Posted on: 2015/5/4 18:28
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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I think long term investors came out better in both stocks and RE. Many people sold their stocks as the market was tanking. Those that hung on came out ok, there was no other place to put your money if you sold since all investments were going down.
Posted on: 2015/5/4 17:11
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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In every crash of stocks, the people who listened to the numbers rather than wishful thinking and emotions got out first. They did indeed leave money on the table, but they didn't leave their bleeding corpse there. RE is slightly different, if you're in it long term you can ride out the storm, especially if the loss is all capital gains anyway. Short term, get out if you can't take a loss.
Posted on: 2015/5/4 17:03
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Re: Is Jersey City Real Estate in a bubble?
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Quite a regular
 
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2014/12/15 16:55 Last Login : 2018/6/19 13:13 From Journal Square
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If anyone of y'all actually knew what y'all preach about the values, you'd all be mega zillionaires by now! Y'all sound like the wall street bankers who know absolutely nothing about what tomorrow will bring!
Posted on: 2015/5/4 16:22
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Re: Is Jersey City Real Estate in a bubble?
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Home away from home
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Using the Gannon, which is priced well above market, to suggest that there's low condo demand in DTJC is just crazy. It's priced at something like $900/sqft in a $600-700/sqft market. Not that the developer should be doing anything differently - if they priced it at $650/sqft, they'd have been fully sold in nanoseconds. Similar argument with Weehawken, which is compounded by the fact that Weehawken has limited walkability and limited NYC access, so pricing at that level seems ill-advised. Like the Gannon, they tried to use an extra $50k in finishes to add $200k to the prices. Maybe it works, maybe not, but it's an indictment of their sales strategy more than indicative of a bubble.
Posted on: 2015/5/4 15:53
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Re: Is Jersey City Real Estate in a bubble?
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To pay rent that is also inflated?
Posted on: 2015/5/4 15:08
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Re: Is Jersey City Real Estate in a bubble?
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http://newyorkyimby.com/2015/04/new-y ... -population-forecast.html This is one component in the rising price of housing in the metropolitan area. A tight housing market will keep prices rising, there may be small dips in rents and housing prices but generally prices will continue to go up.
Posted on: 2015/5/3 15:35
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Re: Is Jersey City Real Estate in a bubble?
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nyc's metro population is exploding, despite the fact that the northwest is losing people.
Posted on: 2015/5/3 11:21
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