Hoboken Real Estate Updates
Wanted to refresh some of the Hoboken Real Estate stories that were in the news the past week.
Burned by Toll Brothers
This story from the New York Times details how a couple scrapped and saved for a down payment at Maxwell Place – only to have the economy tank, and lose their eligibility to get the loan they were originally pre-approved for.
“Elizabeth and James Pham put all their savings into the deposit they made on a $956,990 two-bedroom apartment at Maxwell Place, a new development in Hoboken, N.J.
They signed an agreement for the apartment in 2005, put down $93,199 and were preapproved for a mortgage for the rest of the purchase price.
But when their closing date arrived last September, several banks told them that to get a mortgage, they would have to increase their 10 percent down payment by another 15 to 25 percentage points. With no way to come up with that much money, the Phams notified the developer, Toll Brothers, that they could not get financing for the apartment. Toll Brothers declared them in default and kept their deposit.”
Do you think that was a fair business deal (i.e. contract)? Or should customers be protected if the economic climate changes?
K. Hovnanian having hard times
In last week’s Wall Street Journal:
“The address remains prime, but nearby Wall Street’s continued turmoil is feeding the region’s unemployment, affecting many purchasers and depressing sales and prices. Foreigners, long a key buying group, are battling what has become a worldwide economic crisis.
That could mean unsold units, an elevated cancellation rate and fights over deposits at Hovnanian’s 77 Hudson project, expected to start closings in the late spring/ early summer.
The builder “is backed into a corner here,” said Vicki Bryan, senior high-yield analyst at Gimme Credit. “They’re trying to get [buyers] to the table, I guarantee you, every way they can.”
I would think part of the problem is over-development – which only survives when the economic outlook is rosy.
What are some solutions in situations like this?