Hoboken Real Estate Updates

3/26/2009:

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.

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“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

Credit problems, the decline of foreign buyers and other economic factors have K. Hovnanian facing some problems with their much-hyped 77 Hudson building in Jersey City.

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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?

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70 Comments on "Hoboken Real Estate Updates"

patk14
Member
patk14

Longtime, you must have the IQ of a flea. So, if I walk into a Mercedes dealership and say I want to buy their most expensive vehicle and have arranged credit financing ahead of time, they should turn me down? It is up to me to decide what I can and cannot afford. The Phams purchased an option on Hoboken luxury real estate and the market moved against them. Should they be given the fee that they paid for this option back? Again, IQ of a flea. By the way, I’d estimate that they are down at least $150K on that property and it will only get worse over the next 24 months. They should be thanking Toll for pushing them away.

MidnightRacer
Member

longtimehobokenite, they signed, knew what they were getting into, and you say the moral thing to do would be to give them back their money (or half)? Should’ve written that into the contract. But instead, they speculated, thought they would flip it and make a ton of money (since they presented to us that they wouldn’t have the income to actually pay for it), and they lost.

What you’re proposing as moral and ethical could be compared to telling the casinos the right thing to do for someone who threw down a $90,000 bet would be to return the cash to the person betting.

Stpaddygirl
Member

With the 47% tax increase they would not have been able to afford it anyway….sh*t I can barely afford the increase on my lil place in the ghetto

Skywalker
Member

At least the Corcoran person didn;t say “the market has bottomed,” as most real estate people have been saying every month for the past 2 years.

o. nate
Member
o. nate

Before you start throwing people down sewer holes, “downward pressure” is a metaphor. I don’t think anyone meant it to be taken literally.

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