Reader Mail: I’m broke. Thanks, Hoboken.


Hoboken411 reader “JP” expresses his feelings about the current state of finances in town, and what effect it’s having on residents in the same boat. Despite being conscientious and careful with his money – is on the short end of the stick.


Why can’t Hoboken be as careful as me?

“I worked two jobs for 10 years (full time and 2nd job every weekend) to save enough money for a down payment on a modest 1-bedroom in pricey Hoboken NJ, just across the river from New York City.

I spent months searching for an affordable apartment that was within my budget and after a gut renovation, hopefully would appreciate over the years.

Life was good for the first year — as a single guy with no credit card debt, it was easy making my mortgage payments each month. I lived modestly, cooked in my new kitchen instead of eating out, spent very little money on luxuries like movies or electronics. Life was good.

And then the city of Hoboken, suffering from a gigantic budget deficit after spending spending spending money they didn’t have — was taken over by the state of NJ and raised taxes 47% to cover the deficit. I saw my tax bill jump to $6500 (almost $400/month more).

The Realtor who sold me my apartment appraised it at approx. $330K. “Whoa, quite an appreciation – I did a good job on those renovations!”, I thought. I contacted my mortgage company and attempted to refinance — after paying the $400/application fee (quite an expense in these tough times), I felt pretty comfortable I could hit that $315K appraisal minimum I needed to get the amazingly low rate of 4.875.

After being appraised, I was shocked to learn my apartment was valued at $275,000. Well below the value I needed. The market is in the toilet. And apartments, even in pricey Hoboken, are not worth what they were.

No refinancing for me.

AND I’m out 400 bucks just for applying.

But I’m lucky I still have a job. Two of them, in fact. Never thought I’d feel lucky to work seven days a week.

Now when I shop – I only buy generic brands. And I do this in Jersey City where sales tax is lower. I don’t go out to eat. I don’t go out with friends if spending money is involved. I cannot support local Hoboken businesses, whose prices are usually higher. I buy in bulk. I don’t drive to see my family as much because of the cost of gas & tolls.

Today, I struggle to make my mortgage payment, now $400 more a month…even though I did everything I thought was right. I saved. I lived modestly. I bought something well within my budget.

And because my local government didn’t do the same — I’m broke.

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Saturday, February 7, 2009 11:59 am

I feel bad for him, however, I do agree that it seems that he stretched himself thin for the condo, and I don’t blame him really, it was an opportunity and everyone wanted a piece.

I follow the good old fashioned one third rule. Take your pretax income, you know uncle sam will take one third, you should put one third for your daily expenses / savings if possible, and NO MORE THAN one third for rent/mortgage and other debt.

So if you make $4500 pretax, your expenses should not exceed $1500, and your rent/mortgage plus credit card and car payments should never exceed $1500, it’s called living within means. It pays off.

If $400 extra gets you broke, then you have been ‘barely making it’ when it comes to paying mortgage, tax, and fees. That said though, I feel for the writer and I feel his pain, tough times all around!

Friday, February 6, 2009 8:27 pm

No, but I sure have seen a lot of homes that are currently owned by people who took out mortgages they can’t afford…who are going to be bailed out with MY TAX MONEY. So while I break my neck scrimping and saving to own a home, play the game by the rules, etc. these f*cks are skating on my dime. Should I thank the Republicans for that one? Nope. This one’s on the Dems.

Both sides should be ashamed of themselves.

Friday, February 6, 2009 7:07 pm

Well, the Republican senators are dancing in the streets over their 10% up-to-$15,000 home purchase tax credit. What a bunch of crock, it was just a political gimmick. Ever see a $150,000 home in this area, let alone NYC? Maybe rural ND or NC.

Friday, February 6, 2009 5:52 pm

[quote comment=”134005″]abred0803 — the C.O.L. is Hoboken has certainly risen over the years but I don’t think the increase is out of line with what you’d find in other decent northern NJ towns that on the train line. There are a lot of things wrong with Hoboken, but it has a lot to offer, too — it’s just a PATH ride away from the city, it’s safe, everything is within walking distance, parking is reasonably do-able compared with NYC, etc. So, you get what you pay for — there’s a definite C.O.L. premium associated with not having to schlep to work on NJT from inland Jersey (like you would be doing in South Orange, Summit, Montclair etc) , and not having to watch your back (e.g. Jersey City, Union City, North Bergen).[/quote] I understand that Hoboken itself is a premium compared to other cities in NJ and to me personally, even better than living in Brooklyn due to the closeness of midtown versus being south of Manhattan. I really mean as a whole when compared to the country. I know that there is no way to truly compare, however, I just don’t see how it is possible for a place to be at the price it is in some parts of the country (specifically here.) I would love to know what the value of the land assessment is on certain places here and how they come to that conclusion and what the market mark-up is compared to that, etc, etc.… Read more »

Friday, February 6, 2009 5:12 pm

[quote comment=”133889″]Depends on what your definition of peak is. I know someone who bought a large 1-bedroom for $130K in 1987 (a peak). By 1992 similar units were going for $90K (31% decline). He sold in 1996 (which you claim as a peak year) for $130K. Nine years and not one dime of appreciation. .[/quote]
I bought and sold my condo in those two years too, and right, little appreciation (I made a *little*). I bought another place in ’93. It’s a place to live, with a family, hard to do that renting as the family grows. A few years ago the apparent value was whooppee! high, but I’d have to pay alot anywhere else in the area too. Now it’s lower but same story, tending to be lower all around the area.

As just mentioned, the real point is overspend/overtax problem in Hoboken, and the elected racketeers who keep it going, as crystalized in the 47% tax increase timed to hit just when everything else was falling apart. That’s what’s special about Hoboken.

Otherwise, why is real estate so expensive a mile from a gigantic city, one with probably more super-high paying jobs than any other in the world? same reason it’s probably going to go down some now that a lot of those jobs are being lost.

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