Excerpted from NY Times - Is It Any Wonder?

Benjamin D. Jogodnik is a vice president with Toll City Living. Read his comment about the Hoboken stake that RE brokers are hung with!

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"Quite a few brokers, often avid real estate investors themselves, wound up putting their money where their mouths are, at Toll City properties. Some 40 of them have bought $35 million worth of real estate at Toll buildings that have gone up on the Hudson waterfront over the last three years, according to Toll’s records.

Real estate sales agents have bought condos to live in, or to rent to tenants — or both — at four company properties, including 700 Grove in Jersey City, and Harborside Lofts at Hudson Tea, and Maxwell Place on the Hudson in Hoboken, Mr. Jogodnik said. Many of those same people have also brokered sales and are continuing to market condos in buildings where they own property, he added.

Dean Geibel, the principal of Metro Homes, said he had witnessed the same broker “hat trick,” so to speak, at several of the buildings his company has developed in the waterfront district."

A New Year But An Old Trend Deepens

From Paul Kedrosky's blog - I restate that your local broker's emphasis on the "sales data" is only a smokescreen for a sucker's market:

Admissions of Spin at the NAR

http://seekingalpha.com/article/113274-admissions-of-spin-at-the-nar?source=email


While the topic of this blog is the Hoboken RE market, I wish you all a Happy 2009 nonetheless!

It's still $ per sq ft stupid!

Only RE prices can do the real work in reducing inventory and getting sales going again. Homebuilders and owners will realize this as we get to the end of the rope. There is nothing else left for the feds to poke at!

Buying down mortgages will complement today's action but affordability is a multi-edged sword and financing terms are only one part of the new era in home ownership affordability.

Note that the W Hotel is beginning to show the cracks discussed before. Fortress in trouble, Applied caught in the downdraft, Hoboken city taxes making up the gap and Wall Street bleeding quietly but hard.

1125MP is going on sale as fast as it closes. Sounds like too many decided to hang on rather than walk away! The more stories like this appear, the longer this RE depression will linger - 2010 or more.

The feds are scared by the new mortgage onslaught at the doorstep. And these are decent credit borrowers!

NY Times: A $152,000 Change of Heart

As difficult as it is to do, this buyer removed the emotion and made an economic decision that will turn out for the better within two years - much better!


The New York Times
December 14, 2008

Big Deal

A $152,000 Change of Heart

By JOSH BARBANEL

CATHERINE HOLMES, a senior vice president at Barak Realty, thought she had found the perfect urban pied-à-terre for a suburban couple looking for a big-city view, a touch of the dramatic or a glimpse of the water.

But in this uncertain market, even perfection does not guarantee that a done deal stays done.

After trudging through eight or nine apartments one day last summer, the buyers found exactly what they wanted: a fourth-floor apartment on the East River, at 45 Sutton Place South, a 20-story white-brick co-op built in the 1950s.

“Feel like you are on board a yacht living over the water in a unique apartment,” gushed the listing by Joan Sacks, an agent at Stribling & Associates who has several listings in the building and happens to live there as well.

The apartment had a large master bedroom, a dining room that could be turned into a second bedroom, two bathrooms and a maintenance fee of just under $1,600 a month. It was listed last spring for $1.775 million, but as the market slowed, the price had been cut to just under $1.6 million.

By the end of that long day of apartment hunting, the buyers made an offer, and the sellers agreed to accept about $1.52 million.

In late August, the buyers paid a deposit of $152,000, 10 percent of the purchase price. But by the time the board had approved the transaction, in mid-October, the market had slowed further, and calls to the buyers’ lawyers about a closing date were not immediately returned.

It turned out that the buyers had “lost confidence in the market and wanted a significant price reduction, $150,000,” Ms. Holmes said.

But with no contingency clause in the contract, the seller held firm, triggering a contest of wills. Lawyers for the seller set a closing for early December.

But the buyer did not show up to close and the seller kept the deposit — a first for both the seller’s broker, Ms. Sacks, and the buyer’s broker, Ms. Holmes.

“They are going to wait the market out and see what happens,” Ms. Holmes said. “Their prognosis is that a year from now they will be able to get something like this for $1 million.”

Last week, the apartment came off the market. The seller plans to spend some of the $152,000 to update the bathrooms to increase its appeal. And the brokers will receive a small consolation prize, a commission on the forfeited deposit.

E-mail: bigdeal@nytimes.com

Barron's Chimes in on NYC "Immunity" to Housing Malaise

Until recently, the luxury real estate market remained buoyant as the rest of the U.S. housing market crumbled. Now the stock market has crashed, hundreds of thousands of financial jobs are disappearing and Wall St. bonuses are expected to fall by 50%. Barron's predicts the fallout on luxury housing markets like Manhattan and its tony suburbs will cause price declines of 20%-25% over the next five quarters.

Transactions in the $5 million-plus market are generally in cash, and so are unaffected by tighter mortgage standards. Foreclosures, too, are rare. But move-up sellers can’t sell their luxe digs and buyers are waiting for prices to fall further. Foreign buyers who were propping up markets like Manhattan and Florida are now retreating as their own fortunes wane.

Bel Air, Calif., Las Vegas and New York's Westchester County have seen price cuts on 45%, 29% and 28% of all luxury listings, respectively. Inventory and time on the market is skyrocketing while incentives abound. In some markets, luxury homebuilders have noted a 50%+ decline in demand.

Traditionally rich enclaves like Beverly Hills and Greenwich, Conn. have seen less price cuts than in places that were just bid up during the housing boom. But that doesn't leave them immune. Barron's warns New York: "Look out below!"

S&P - New Indexes of Condo Prices

Standard & Poor's, publisher of the closely watched S&P/Case-Shiller Home Price Indices, is set to launch on Nov. 25 new indexes that track condominium prices in five major metropolitan markets—Boston, Chicago, Los Angeles, New York and San Francisco.

That is not the only move building on the popularity of the Case-Shiller indexes. For every season ... there will be more real estate indexes from S&P. The company plans to create seasonally adjusted versions of the existing Case-Shiller indexes, that cover the residential real estate markets in the U.S—the 10-City, 20-City and National Composite indexes. S&P will also create seasonally adjusted versions of the three new condo indexes.

The existing Case-Shiller indexes are about to get even more exposure as they enter the exchange-traded funds world through MacroShares portfolios. These funds are not only unique for targeting the niche residential real estate indexes, but will launch using an initial public offering process never before used by the ETF industry.

David Blitzer, managing director & chairman of the Index Committee at Standard and Poor's, said in a statement that condo prices behave very differently from residential home prices, and that the condo indexes will provide property owners and investors a more complete picture of the U.S. housing market, as well as more specific takes on relative real estate performance.

The condominium indexes covering the five major metropolitan areas will include historical data beginning in January 1995. The seasonally adjusted data will have the same history as its underlying index, which for the existing Case-Shiller indexes, goes back as far as January 1987.

The new indexes will be part of the supplemental home price data series that are normally available by 9:30 a.m. on the last Tuesday of every month.

If you haven't already seen this...

... it's worth a look! It screams of the expectations in Hoboken's RE market only a few months ago. While this blog has been preaching the pending doom, I'm afraid it's only the beginning. Fortress Investment Group's fate and the dependent impact on Hoboken RE still hasn't reached the local media. Is that because they are owned by the same parties in jeopardy?

Enjoy the laugh:
http://www.youtube.com/watch?v=bNmcf4Y3lGM