Hoboken, NJ

Hoboken Real Estate - As Of April 23rd

Where Are Hoboken Condo Sales & Inventory Headed?

How Does Hoboken Condo Inventory Build Up Affect Prices?

Basic laws of supply and demand would seem to indicate that when we have an increase in supply without a corresponding increase in demand, prices will drop until equilibrium is achieved. The month of April is almost over and the end of month Hoboken condo sales figures will be posted here promtly.

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The March Numbers Are In for Hoboken Condos Sales

Since the start of 2008, the typical measures of market activity in the Hoboken condo market have shown signs of a slow down but they have been very slight. The average sales price of a Hoboken condo in March was $538,722, down for the third month in a row. Price per square foot, however, was $522, up from last month but not quite back to January's level. The average list price fell for three consecutive months. That number does not reflect prices changes. It is the list price at the time the property actually sold. There may have been price reductions from the original list price on many properties as sellers realize they can no longer count on a 15 to 25% increase from the most recent sales prices of similar units in their buildings. Here is the chart:

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This is a subject very close to my heart; Reverse Mortgages. And you know until recently, seniors 62 years of age and older have not had the best choices when it came to getting cash from their homes. Traditional home loans only offered the option of either selling one's house or borrowing against its equity.

But with reverse mortgages coming on the scene, seniors now have some additional cash-flow alternatives. This type of loan allows mature borrowers to convert their home equity into tax-free income without leaving their current home or making mortgage payments - and they do not need an existing income to qualify.

How a Reverse Mortgage Works
Reverse mortgages are probably best understood when compared side-by-side with traditional home mortgages, otherwise known as "forward" mortgages. The following table shows the differences between the two:

Both loans incur debt against your home, and both affect equity, but they do so in different ways. Traditional home mortgages require making monthly payments to a lender. With a Reverse Mortgage, payments are made to you.

What a Reverse Mortgage Involves

Here are some important points to know when considering a reverse mortgage:

Eligibility: To qualify for a reverse mortgage, you must be at least 62 years of age. All owners who are on the title deed must meet this age requirement. You must also have paid off all, or most, of your home mortgage. Lastly, the home you reside in must remain your principal place of residence.

Mandatory Counsel: In order to ensure that homeowners are fully aware of the financial ramifications of obtaining a reverse mortgage, you must undergo counseling with an unbiased third party before completing a loan. HUD and AARP oversee a network of counselors who can provide this service, and it should be offered for either a nominal fee or at no charge.

Tax-Free Income: One of the advantages of a reverse mortgage is that the money you receive will not be taxed. The amount you'll obtain depends on several factors including the plan you select, the type of cash advances you choose, your age, and the value of your home. Typically, the older you are the larger the loan, as you will have more equity in the house.

Cost: The cost of a reverse mortgage varies considerably from one type to the next. However, you can typically use the money you receive to offset the loan fees. The costs will be added to the loan balance and must be repaid with interest once the loan terminates.

Repayment: Reverse mortgages do not require any payment as long as the borrower(s) remain in the home. Should the borrower(s) pass away, sell the home, or permanently relocate, then the loan would be due in full, along with interest and additional costs. If two borrowers are on the loan and one dies, the loan would not be due since one of them still occupies the home.

Home Equity Conversion Mortgage - The Federally Insured Loan. The most common type of reverse mortgage is the Home Equity Conversion Mortgage, otherwise known as a HECM mortgage. This is the only reverse mortgage program that's federally insured and backed by the U. S. Department of Housing and Urban Development (HUD). This type of reverse mortgage is popular for a few reasons:

• Ability to choose your own interest rate.
  You can select one that changes annually or one that changes every month.
  
  
• You have several payment options.
  You may receive monthly loan advances for a fixed term or for as long as you live in the home. You may also choose to receive a line of credit or combine monthly loan advances with a line of credit.
  
  
• The loan can be used for any purpose.
  With a HECM, you don't have to designate the loan to a specific use; you can apply the funds to anything you choose.
  
  
• Protection.
  This is one of the most attractive features of a HECM. This plan protects you by guaranteeing continued loan advances even if your lender defaults.

Sell or Stay?

The main reason people choose a reverse mortgage is to gain financial independence and maintain an adequate standard of living without leaving their current home. The best way to decide if a reverse mortgage is right for you is to compare it to the other option of selling your house. To do this, ask yourself these three questions:

1. How much cash can I get by selling my home?
2. How much will it cost to buy or rent a new place?
3. Is it worth my moving now, or do I prefer to do something else with the money?

Perhaps you'll confirm what you knew all along, where you now live is the best place to be. Thanks for letting me share this very important piece of information. If you have any question please dont hesitate to ask. Make it a great day!

1. Location Location Location

Location has been, and always will be, one of the most important factors in any real estate deal. From the time Hoboken was settled, the place to be was on the waterfront. That hasn't changed. If you're buying a condo in a marginal part of Hoboken, no matter how nice the particular unit, you're still getting marginal property. In an uncertain economic environment, buying a Hoboken condo in the most desirable part of town, Hudson Street, Bloomfield Street, Garden Streets, Hudson Tea or the Shipyard, is your best hedge against a potential downturn. So with all the inventory currently on the market why are you even considering Jackson or Harrison?

2. A Few Thousand Dollars Over 30 Years is Not Worth Much

Buyers get all hung up over a few thousand dollars. They will be negotiating with a seller on a half-million dollar condo and walk-away from the place of their dreams because they are a few thousand dollars apart. Even for $3,000, we're talking about less than 1% of the purchase price. Moreover, when you add that $3,000 onto a 30 year mortgage and amortize it, the difference in the monthly payment is negligible.

3. Know What You Can Afford

Many buyers start the house hunt without ever speaking with a financial advisor, bank or mortgage lender. They have no real idea of their budget, how much they will need to put down in cash, or how large a mortgage they can manage. They either look at condos that don't meet their needs, not realizing that they could afford to spend more or they look at condos beyond their means and then are dissatisfied when they take a step down to those within their budget. Know your numbers before you start looking!

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Would You Buy a Condo in A Building With Only 3 Units?

If so, you better keep reading. Hoboken has very few coops. Most units in Hoboken are condos. A condo building is run by the condo association. The condo association is made up of the unit owners. Each unit owner has a vote. Sometimes, that vote is proportional in relation to the size of the unit owned. Other times, it is 1 vote per unit. So what's the problem with that, you ask?

Hoboken has many older 3 and 4 story homes that have been converted into 3 and 4 unit condos. Let's say you're about to purchase a unit in one of these 3 unit buildings. You would own 24% of the total square footage of the building, your upstairs neighbor owns 24% and the family downstairs in the duplex has 52% of the total. So your vote is worth 24%, the upstairs vote is worth 24% and guess who controls the building? Or the same owner owns two floors and now the third floor unit is for sale. Each condo unit gets one vote. Again, your soon to be neighbor makes all the decisions.

Why Should You Care?

Living in a condo building requires cooperation among unit owners. It also requires decisions to be made that effect everyone. Think about who decides how much the reserve fund should be, whether special assessments will be imposed or whether maintenance fees ought to be increased, and if pets are allowed. When one unit owner has a controlling interest, all these decisions can be made by that owner. What if you prefer to live in a well maintained, clean building but your neighbor could care less? If they decide how the condo fees are spent they may not be willing to repair the roof, paint the common areas, clean the hallways or install new lightings. Owning property requires maintenance and upkeep. Improving property costs money. If you're not on the same page as the neighbor with the controlling vote, you have no recourse except to make improvements and repairs at your own expense. Or you may have a really difficult time selling when your building looks like a money pit.

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