Tuesday, April 25, 2006

The Increasing Supply in Jersey City and Hoboken

I occasionally make the point that people who live in Hoboken or Jersey City or Manhattan now will probably have to buy in the suburbs eventually. I also like to point out that inventory is growing in those areas, which indicates to me that condos are not selling there, and therefore, those sellers are not going to be Jersey Shore buyers anytime soon.

In any event, it does not look like condo sales are going to get any better up there because it looks to me like a huge supply of new construction is nearing completion in Hudson County. In Hoboken there are three huge Toll Brothers projects that will be completed starting late this year that will probably dump at least 700 condos on the market in the “Mile Square City” (aka Hoboken.) Jersey City will probably be worse as far as supply absorption is concerned since there is so much room to build there. Already, Trump says he plans to put up some new luxury building and Hovnanian recently announced plans to build another huge tower on the Jersey City waterfront.

7 Comments:

Blogger chicagofinance said...

I am actually shocked at how bad things look in JC. Trump is a de facto idiot who leads with hubris. As a result, I do not give any credibility to the fact that he is developing a property.

The result of the PAD/Grove Steet PATH area is so dense, so massive, so landlocked, and so isolated.

Insane. They will still be selling new units in 2015.

Tuesday, April 25, 2006 9:19:00 PM  
Blogger bairen said...

I really doubt the prices in "gentrified" JC will hold. As The Boss said "Going down down down"

The last time I was in Jersey City I thought it was still pretty creepy except for a few blocks near the PATH.

Tuesday, April 25, 2006 9:26:00 PM  
Anonymous Anonymous said...

The Realtors® who troll the Kannekt boards insist that the JC/Hoboken markets are "HOT" and that sales are steaming ahead.

Of course they don't report actual monthly sales numbers - then again, I don't know where to find such numbers to verify these claims.

But based on the for sale signs going up and not coming down I'm wondering if "HOT" means "careful, you'll get burned."

Wednesday, April 26, 2006 6:33:00 AM  
Anonymous Anonymous said...

Anyone wanna bet how many of the proposed new construction actually gets build?

Looking at other new construction outside the Northern Jersey waterfront, there seems to be a big pullback in the financing behind the deals. For Trump, this is important since the deal as reported in the papers (at least the ones I read) had him putting no money into the project - he is in effect franchising his brand to some local guys.

While funds may continue to flow to major builders, housing is no longer the hot investment and most bankers tend to follow (or lead) the herd. Being the last guy in when all the news is bad is never a good career (or bonus) move.

That being said, some of the waterfront units overlooking the marinas do look nice and have awesome views.

Wednesday, April 26, 2006 8:36:00 AM  
Anonymous Anonymous said...

There are over 90 projects, 10-15,000 new units under construction or on the books to be built over the next couple years in Jersey City alone.

Towers upon towers of high density condos... let's see a few thousand units come online at the same time, mortgage rates go up/credit continues to tighten, then I guess we'll see how much "demand" there truy is.

I lived in JC for some time, know the market better than most, and I don't see it. $700k for a shoddy construction 2 bdrm condo and $10-12k taxes? Hmmm. Maybe not.


Steve

Wednesday, April 26, 2006 7:22:00 PM  
Anonymous Anonymous said...

Same thing is happening in hoboken - lots of new units opening up just as people start to realize that they need more space (i.e. for kids).

Given a choice and similar pricing, how many people would pick JC over hoboken?

Thursday, April 27, 2006 8:10:00 AM  
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