Investor · New Jersey, NJ · Member since 2012 · 15 posts · 8 votes
Seems like any 3 bedroom hitting the market in downtown Jersey City starts at 1 million, and goes up from there. We saw a listing for a 'rare' SFH brownstone that just hit the MLS at 900K, with a backyard and parking. My husband thinks it's a fair price and would continue to appreciate, but I have my doubts. I wonder if we're nearing or at the peak, or is this just a shortage of available inventory, particularly of 3+ bedrooms?
Hi Jennie, in my openion it's a shortage of inventory, there aren't too many 3 bedroom Condos or SFM. And the supply won't increase either in the future.
The price would continue to appreciate till we hit Brooklyn level prices. The fundemantal drivers behind the appreciation of downtown JC is still intact.
Hi Jennie, in my openion it's a shortage of inventory, there aren't too many 3 bedroom Condos or SFM. And the supply won't increase either in the future.
The price would continue to appreciate till we hit Brooklyn level prices. The fundemantal drivers behind the appreciation of downtown JC is still intact.
Jennie Wang Diana Tian
While I do believe that there is a supply issue in JC for condos/SFR's, I wouldn't say that the prices are going to be on par with Brooklyn anytime soon. The difference is that BK's growth was jolted due to a healthy dose of tax abatements. You aren't seeing that in JC for new condo developments. Developers might be getting abatements for rental projects but certainly not condos. In BK you can afford a much higher costing condo due to little or no taxes affecting your monthly allocations.
I definitively agree with you on that jersey city still has a long way to go to catch up with Brooklyn. Brooklyn has much more neighborhoods very well developed while in jersey city, besides of downtown, we still dont see that many changes. But the gap will become narrower as more New York / Brooklyn crowd are moving in. I don't think tax abatement is the main driver for Brooklyn growth but the neighborhood gintrification.
Demand for historic Jersey City and Hudson County property continues to rise.
(I own residential in Hoboken and developed commercial in Paulus Hook.)
Development of Lower Manhattan commercial space and its increasing uptake by former midtown occupiers is drawing Upper West Side and Upper East Side residents to Hudson County and Brooklyn for family sized residential and improved commutes by ferry and PATH.
Paulus Hook/Downtown and Hoboken each have seen increases in such family sized property buying in 2015/2016.
Hoboken saw a $6mm brownstone sale in 2016, and $3mm sales are increasingly common.
The Jersey City challenge is that it is more sprawling than Hoboken, and many blocks are still less than fully desirable due to deferred maintenance, services deficits and weak streetscape planning.
$900k does not strike me as near the forever top end of the pricing range for the property you describe if it is Downtown. Do explore why it is priced lower than its alternates. Renovation in Jersey City is expensive and annoying.
One might consider Bergen Lafayette or The Heights for similar product at half the cost. But neither offers as convenient transportation to the City, services or street life.
Good Luck.
@Michael Elfant Taxes are definitely an issue. With property reval coming down the pike, I'm factoring in 2.07% property taxes with every potential listing. Speaking of which, has anyone heard any update on the reval?
4th Quarter 2016 averaged $735/sf for Downtown JC Condos and they're still selling within 30 days (on average). While we'll probably never surpass the other boroughs like Brooklyn, we directly feed off of their market and that's where the bulk of my buyers/investors have been coming from. They're looking for more space for their dollar and Hudson County offers that. There's still a lot of space to develop and re-develop, so I don't see the market "peaking" too soon... probably just increase at a slower (healthier) rate than past couple years
If it's a SFH in downtown and is has both, parking and a backyard and it's "only" listed for $900k, the house probably needs updates and the sellers are inviting a bidding war.
Assuming the house is in ok condition and relatively close to the Path, chances are it will sell for more. Because there's not a lot of inventory for families that would like to "have it all" (3 bedrooms, parking, backyard) without living to the suburbs, there will always be demand for these houses. In this market, you'll be lucky to get it for asking price.
That said, if you're looking at it purely as an investment, there are many other better places to park that much money.
@Dan Schoenbaechler Thanks for sharing the update about the reval and the 4th quarter averages.
@Ro Maga You and others were correct in assuming a bidding war. Also upon closer inspection, listing is technically for a 2 bedroom with potential for a 3rd. Got ahead of myself there. Would have been nice for a primary home if the numbers worked out in our favor.
@Michael Elfant Taxes are definitely an issue. With property reval coming down the pike, I'm factoring in 2.07% property taxes with every potential listing. Speaking of which, has anyone heard any update on the reval?
Jennie, what do you actually mean when you say that you factor in 2.07% property tax with every potential listing? Does this mean that you are deducting 2.07% of the market value from net revenue during your analysis? If this is the case, how did you arrive at 2.07%?