During the last 3 months of 2011, the NJ economic growth was “quite robust” while NY State has seen only “minimal job gains” since August, according to William C. Dudley, the bank’s president.  “In contrast, New Jersey’s economy “has picked up noticeably.”

In 2011, NJ added over 39,000 private sector jobs, the biggest increase since 2000, however the overall unemployment rate of NJ at 9% lags that national average of 8.5%.  Scott Allan of NJ Real Estate Guys suggests that South Jersey is anchoring the unemployment rate as there are a significantly higher amount of unemployment applications in South Jersey than in areas such as the NY Metro areas.  Naturally, the housing market is improving in those metro areas.  South Jersey continues to be pressured by shadow inventory.

Jason Bram, economist for the federal bank said “Bergen, Hudson, and Passaic counties added jobs at a faster rate than the national employment increase of 0.7% from June to December 2011.  NYC also outpaced the national average.

This is one very good reason why areas such as Hoboken, Jersey City, and other urban markets are seeing much improved absorption rates.

Comparing 2011 to 2011, however is more indicative of where we are today. For instance, I’m sure everyone is aware of what shadow inventory is. If not, shadow inventory is new delinquencies, or homes that banks have foreclosed on but not put on the market for sale. Based on our research of Lis Pendens filings, short sales, regular sales, courthouse sales, etc, the shadow inventory is almost 3 times greater in South Jersey than in North Jersey. Why? Location. In fact, in 2011, quite a few sub-markets of the NY Metro area showed some stabilization. Wealthier or more affluent towns fared much better than lower income areas. Less affluent areas also have tighter lending guidelines and higher unemployment.

Hoboken has shown stability on studios, 1′s and 2′s. The 3 bedroom market has recently shown drastic improvements. Downtown Jersey City has shown similar results.

NJ Real Estate Guys founder says “The Northern NJ housing market is showing significant signs of improvement compared to 2010. Naturally, as employment continues its upward improvements, so will the housing market.  Fence sitting buyers should strongly consider buying in 2012. This year will likely be one of those years that come up in the years 2014 or 2015 when you are sitting having coffee saying to yourself, “I should have bought in 2012″.

Bottom line is that when you look at real estate values, remember that every single market is different.  If you are shopping for a home, find out how much inventory is there.  What is the rate of absorption.  Qualified housing market analysts like ourselves can help you interpret the market in a different light which could have a direct and positive effect on your home, which is also known as one of the biggest investments of one’s life.

If you are in the market to buy or sell a home, contact Scott Allan at Scott@NewJerseyRealEstateGuys.com or call direct at 877-688-7582.  We offer free at-home or office consultations.  We want to understand your goals so we can help apply a strategy.

This article will focus on the Hoboken Condo Market.  There are many descriptive words we can use here.  Looking at the leading indicators we look at to determine the health of the Hoboken condo market, I can say with confidence that 2012 will be a positive year for Hobokenites.  I also believe that those that are on the fence about buying and make the decision not to, will look back in 2014-2015 and wonder in hindsight why they didn’t get in on a significant opportunity in 2012.

The most glaring improvement is the available inventory for sale and the depletion of inventory from 2011 to the end of 2012 as shown in the line graph below..  Without going into extreme detail, it is pretty self explanatory here:

In January 2011, there were 477 condos for sale in Hoboken.  In January 2012, there are only 187, a reduction of inventory by a staggering 60%.  The pace of sales volume, which calculates into the “rate of absorption” is along the same trends as a year ago.  Although 2011 sold about 14% less condos than in 2010, we shouldn’t forget the main reason was the First Time Homebuyer Tax Credit which expired mid-year 2010.  In June 2010, there were 134 condo sales.  In June 2011, things were normal or average with a Hoboken sales volume of 72.

If inventory is coming down and the pace of sales is consistent which happens to be the case, you can expect more significant competition amongst buyers.  Our current listings are not lasting long on the market.  Almost all of our listings, we are calling a “highest and best offer” situation, which is music to seller’s ears.

Another indication that the market is improving is the Price Per Square Foot of condos sold.  The 1 and 2 bedroom market was almost flatline since Q1 of 2011.  That was a great sign of recovery and was a clear end to the downward trend of prices.  The end of the year of 2011 showed the beginning of an upward trend in square foot prices.

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We are seeing a lot of increased interest in 3 bedroom units in Hoboken as a result of more families moving into town and preferring a more urban lifestyle with proximity.  A tradeoff we are seeing is the family with multiple vehicles moving to Hoboken and downsizing to only 1 vehicle.  Only about 4% of the marketplace consists of 3+ bedroom units.  They are in very high demand at the moment.  The price per square foot of a 3 bedroom condo shot up from $395 / SF during Q4 of 2010 to $434 during Q4 of 2011, almost a 10% increase in value.

Sales activity was almost dead even in 2011 as it was in 2009, however about 8% less than 2010.  Again, we blame that on the First Time Homebuyer Tax Credit.

The average sales price of a condo in Hoboken in 2011 was $494,723, down from $498,135 in 2010.

Expect to see a slow slow month for January.  DABO’s or pending sales are down in November and December.  Unless January shows a more active number in January, we can expect February to be equally as slow.  We expect inventory levels to creep up just a bit before the spring buying season, however just as important, we anticipate a huge buyer frenzy due to improving confidence, historically low interest rates, and lower prices.  With the Fed agreeing to hold interest rates down, buyers will increasingly confident that if they find the right deal, affordability has re-entered the market.

Check out the charts below.  What are your thoughts on predicting how the first quarter will pan out.  For readers who register on our site, I will send you our thoughts on what we think.  Comment your predictions below in the designated area.

As a testament to all of our hard work, analysis, and research, our clients have successfully achieved all of their goals whether it was to buy or sell.  We are eliminating the disconnection between buyers and sellers which is one of the quickest ways to stabilize a market.

If you or anyone you know is looking to buy or sell in Hoboken, you have come to the right place.  Give me a call direct at 877-688-7582 or e-mail me at Scott@NewJerseyRealEstateGuys.com.

If anyone has had their short sale assigned from the mortgage lender to Cartus Financial, it is my recommendation that you INSIST that the file stays with the lender and not Cartus, a third party servicing company.  I have negotiated dozens of short sales.  I recently got introduced to Cartus about 5 months ago.  Without wasting my time to say how much I hate Cartus, run fast from them.  INSIST to negotiate with the actual lender.  Cartus is TERRIBLE and you will never get anything but lies and deceit.  The Attorney General’s office and BBB will be hearing from me for sure.

Anywaysssss…..back to important short sale updates.. As we have mentioned before, Chase Bank is offering CASH incentives for short sales these days, and other banks are starting to follow suit.  Chase Bank has a liquidation division that bases their incentive on certain borrower qualifications.  We have assisted in short sales that have received anywhere from $3,000 to $20,000 back at closing.  Yes you read that right.. Up to $20,000.

If you are a homeowner looking to short sell your home, it is critical to address your situation upfront without waiting a year before becoming proactive.  The banks will definately not like to incentivize you at that point.  If your home is your primary residence, we have been placing our sellers into the HAFA program, a government backed program that has the most lenient terms.  Terms include up to a $3,000 relocation incentive, all backed expenses paid, and a guarantee that the banks cannot go after you for any deficiency in the future.  It’s the best program out there.

You must have lived in your home during the last 12 months.  If you have relocated, your relocation incentive will not be granted by HAFA.  If you are not approved for HAFA, don’t worry.. it is not the end of the world as there are more short sale programs available, but HAFA is today’s preferred way to go.  HAFA stands for Homes Affordable Foreclosure Alternative.  View information of NJ HAFA Guidelines

We have over 3 years of experience with the short sale process.  We have a streamline process with the lenders to ensure the most favorable terms and our contacts with each servicer grows with each short sale we close.  If you are looking for more information on short selling your home, please call Scott @ 877-688-7582 or e-mail me at Scott@NewJerseyRealEstateGuys.com

I would be happy to explain the entire process to you so that you can feel comfortable going forward with any decision you make.  The short sale is actually in your favor and is not anything to shy away from.  If you are underwater or in a hardship, please call me for a free consultation.

Here are some HAFA Short Sale Benefits:

• HAFA releases you entirely from your mortgage debt upon closing or selling the property.  The deficiency from what you owe and the amount you actually sell the house for is guaranteed to be waived by the lender and servicer.  The lender will not pursue any assets you have including checking, savings, vehicles, etc…
• Your mortgage company works with you and your real estate agent to determine acceptable selling terms.  The lender will require you to have a realtor and an executed listing agreement for your home.
• HAFA has a far less negative impact on your credit than a foreclosure.
• HAFA provides $3,000 in relocation assistance at closing to you.

Eligibility:

• You live in the home or have lived in the home in the last 12 months.
• You must have a legitimate and documented hardship.
• You have not purchased a new house in the last 12 months.
• Your first mortgage is less than $729,750
• You obtained your mortgage on or before January 1, 2009
• You must not have been convicted of a felony larceny, theft, fraud, forgery, money laundering, tax evasion in connection with a mortgage or real estate transaction.

HAFA is only available for mortgages that are owned or guaranteed by Fannie Mae and Freddie Mac, or serviced by a HAMP participating mortgage servicer.

Be sure to speak to a real estate professional knowledgable in short sales who can assist in providing you guidance into the best short sale or disposition process.

Scott Allan, with New Jersey Real Estate Guys is a seasoned short sale specialist with dozens of short sale clients.  Please call me at 877-688-7582 or e-mail me at Scott@NewJerseyRealEstateGuys.com.  I would be happy to help you with any questions you have regarding the short sale.

Some of the information in this article was taken from Making Homes Affordable, a website from the Department of Treasury and the U.S Department of Housing offering information on HAFA.  If you would like to view the HAFA page, please visit Making Homes Affordable

NJ’s average down payment is 13.76%, about 1.5% higher than the national average.  Ok, let’s put this into perspective.  NJ is one of the highest earning / income states.  NJ is one of the most popular states whether you know it or not or agree with it or not.  We are also a mecca for residential suburban and urban folks who want to live close to the Financial Hub of the World in NYC.

So rightfully so we should have a high down payment.   Congress is looking into a law to require 20% down payment on a home.  I doubt that gets approved.  It will almost single handedly ruin any recovery we are seeing.

In New Jersey, its not so much that people can’t afford to put down 20%.  It’s the fact that people are just deciding to stay a bit more liquid these days.  Don’t read too much into this down payment crap.

To browse all available condos for sale in Hoboken, CLICK HERE>

As the winter progresses, we don’t see a whole lot of change in the typical patterns.  December will remain moderate, but foot traffic will be comprised of more serious buyers.  If you are a seller, remember, that during the summer, people will go on Sunday drives just to take advantage of the snacks while touring homes in nice weather.  Those that do this in the colder months are historically much more serious types.  Some advice to sellers would be to treat every lead you have on your home seriously because you never know!

In Hoboken, the average price of a condo sold in November of $509,701 was higher than the annual average of $489,558.  The number of sales in November of 28, failed to meet the annual average of 51.  Keep in mind, volume fallout in winter is totally normal.  We look at rate of absorption which continues to improve steadily.

On December 1, there were 232 condos in Hoboken listed on the MLS.  In January, 2011, there were 386 condos on the market, a 40% reduction in inventory.  Some will say “Lucky Month”.  I think not…The inventory has fallen month over month quite a bit.  Here is the chart for inventory:

Regarding the macro market of Hoboken, investors are targeting condos with Capitalization Rates of 5-6% in Hoboken.  In 2011, the average rental rate in Hoboken improved 11.6%, one of the biggest metro jumps in the country.  There is a shortage of 3 bedroom condos and single family homes in Hoboken as only 5.5% of all inventory fits that criteria.  In a luxury building (asked not to be named), the sales manager said 46% of all sales this year went to investors.

Here is a look at November stats from this month and year over year change.

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It is our belief that we will not see a significant difference in home values until 2013, however on a micro/sub-market perspective, Hoboken is likely one that is going to defy the odds of that theory.  My theory was based on a national perspective.  The most recent jobs report, coupled by homebuyer confidence is going to be one of the reason why urban areas will recover first.

Investing in multi-family is always lucrative in the current economic conditions.  Shortage of rental stock means increasing rental rates.  Current MF buildings are being offered and sold at about 5-6% Cap Rates in Hoboken which means there is confidence that Cap Rates should improve nicely in the next couple of years.  Cap Rates at 5-6% today are better than what other investment vehicles can provide.  As long as you are aware of tangible risk, investors should have a field day with potential upside.

If you are looking at buying or selling real estate in Hoboken, call Scott Allan at 877-688-7582, or e-mail at Scott@NewJerseyRealEstateGuys.com.  Scott is the founder of New Jersey Real Estate Guys and located at Weichert in Hoboken, right near the PATH station.  Come see me and my team and find out why we are Hudson County’s most innovative agents.

The headline housing data exceeded expectations.  Here are some thoughts on the report:

October housing data: 628k for starts (vs 604k consensus) and 653k for permits (vs 603k consensus). All in, starts were up 29% y/y

The growth was primarily due to ground-breaking in the multi-family (aka apartment) market – starts were up nearly 100% in this market and permits rose 62% from the year ago period. (Contractors are building to relieve a tight apartment supply as foreclosed ex-homeowners shift to the rental market).  These numbers come against very depressed results a year ago. Would not be surprised to see a drop-off in November starts b/c less multi-family projects are started in winter months. While encouraging to see positive growth, the industry is far from healthy.

To underscore this thought: October single family starts were roughly flat with a year ago (430k vs 434k) but permits rose 6% y/y. Not as great as the headline would suggest, but better than going backward.

There are no pure-play multi-family building product producers.  The industry will get a modest bump from stronger multi-family (1/3 of all starts), but a recovery in single-family market would really turn sentiment for the group, in my view

As it stands, we think the group is in the process of turning the corner after an epic historical decline and remains a good bet for the deep value crowd.  It also may be an appealing “place to hide” in a choppy market primarily b/c , seriously, industry activity is so bad it is tough to see how conditions could materially worsen.

The second property I looked at was a comparable building in Hoboken on Monroe Street.  Great area, super convenient, reputable tenant class, but a bit pricey.  Based on the numbers, this building offered a 5.4% Cap Rate.  Why the difference?  Well first, Hoboken is in a different class geographically.  Hoboken is the anchor of the Gold Coast and historically commands higher rents, higher quality everything, and sellers who base their asking prices on that.

The connection between buyers and sellers is different in each submarket.  The building in Jersey City has a market value of about 8-9% Cap Rate.  The building in Hoboken has a market value of around a 6% Cap Rate at most.  If you are looking to get a 8-9% Cap Rate in Hoboken, you will have a severe disconnect from sellers.  It just won’t happen.   Knowledge in the submarkets and how each area is local in nature is the first thing you should take into account.

So getting back to offsetting my risk as mentioned in the first paragraph…… Do you take a 9.2% Cap Rate in West Bergen Jersey City, or do you take a 5.4% Cap Rate in Hoboken.  Well Hoboken has an overall better Occupancy Rate than West Bergen JC.  Evictions are also far greater in West Bergen JC.  Just because you have a higher Cap Rate, doesn’t mean that will stay consistent.  It could, and in fact very well may improve.  But the risk is in the historic statistics of renter performance.  Hoboken has a far better eviction history and is arguably in one of the best NY Metro markets around.  If you are going with the lower Cap Rate in Hoboken, you are likely hedging your investment on long term potential.  If you are a believer in history, it is Hoboken that has greater value improvements than West Bergen JC so the speculative investor could do better in Hoboken if you are ok with the lower Cap Rate, ROI, whatever you want to call it.

If you go with the higher Cap Rate in West Bergen JC, if for some reason the area deteriorates for whatever reason, value may not go up, but at least you have a good positive cash flow.  Some investors are fundamentally old-school.  That is 0% Speculative, and all Cash Flow driven.  Put yourself in between, and you could find yourself in a lucrative situation.

There has been a lot of ink on rental properties.  They are HOT with a capital H.  Rental rates are increasing like crazy and vacancy rates are dropping like its hot.

If you are looking to learn more about investing in Commercial or Multi-unit buildings, give me a call.  We are one of Northern NJ’s leading real estate investment specialists.  We represent you so that you can get the best deal and the greatest peace of mind.  Call me, Scott Allan, at 877-688-7582 or e-mail me here.  Make an appointment and stop by our office in Hoboken next to the PATH station.  Happy Investing!

We are currently working on our 100th Short Sale!!!  I remember the first one in 2007 like it was just yesterday.  I had a vague idea what a short sale actually was and the documentation the banks required changed every 5 minutes, it seemed.  I am proud to say that we are one of New Jersey’s premier short sale specialists.  I am going to answer a few questions I have received recently.  Here they are:

1.  Do I need an attorney to negotiate my short sale?

A.  My answer to that is that yes, we do need an attorney as part of the team.  As a real estate agent, I need an attorney to structure a preliminary settlement statement for the bank once we receive an offer.  I also need that attorney to handle represent us at the closing table.  Best part is the attorney fees are paid by the bank in the short sale.  Nothing out of your pocket.  However, due to our familiarity with the short sale process, we request on ALL of our short sale listings that we negotiate the sale with the lender.  The only way to successfully negotiate a short sale is experience and structure.  If the short sale file is not structured properly, you go to the bottom of the pile and your default becomes worse.  So yes, we need an attorney but not to negotiate the settlement.

2.  Do I need to go late on my mortgage before having you negotiate the short sale?

A.  Sometimes yes, sometimes no.  Depends on the lender and the program you qualify for.  We would need to discuss on a case by case situation.

3.  How does a short sale affect my credit score?

A.  Assume your short sale takes 4 months to close from the first missed payment.  Your credit score is affected for 4 monthly lates.  There is no further penalty after the short sale is negotiated.  It is hard to predetermine how much a credit score is affected with each late.  It all depends on your individual credit reports.  If you are a strong rating aside from your short sale, your score will be affected less than those that are in default of other tradelines.

4.  What is HAFA ?

A.  Simply put, HAFA stands for Homes Affordable Foreclosure Alternative.  This is a short sale program if your loan is insured by Fannie Mae / Freddie Mac.  Most loans with a principal balance under $715,000 are qualified, but please ask us to verify.  HAFA is our most favorable program. HAFA short sales credit the seller up to $3,000 cash at closing for relocation assistance money.

5.  What other short sale programs are there?

A.  There are only a couple of them.  Getting to know the situation will help us direct your home into the appropriate program.

Short Sales can be time consuming.  Sellers looking to resolve the sale quickly must cooperate.  Cooperation involves updating your monthly bank statement and bank stubs to the lender which they require until the sale is complete.  If you cooperate, the short sale process is much easier and the bank will offer their assistance which we need.

We are NJ’s short sale specialists.  Prior to the short sale initial paperwork, we introduce you to our team.  Our team consists of us, our preferred attorney (you are not obligated to use our attorney), and the bank negotiator.  Upon introduction, we educate you on the entire process so you understand all of the intracacies involved in a short sale.  Nothing is hidden, everything is fully disclosed, and that is the way you will have peace of mind.

If you have any questions about the New Jersey short sale process, call Scott Allan, the expert specialist of short sales with Weichert Realtors.  E-mail me here or call me direct at 877-688-7582.

Thanks and I look forward to hearing from you.