Bubble Wrap: December 2008

Hoboken's 47 percent tax hike slows down real estate market

The Jersey Journal reports on the recent passage of a huge property tax increase in Hoboken, with both residents and the real estate community expressing their frustration with the local government.

“The Hoboken market has been very difficult over the past few months,” said Nick Costantino, owner of Empire Realty Group at 4th and Washington. “I haven’t seen people say ‘no’ to homes because of the tax increase but people are making lower offers on homes because of the tax increase. If your taxes go up 47 percent your price will have to come down, they just have to.”

Downturn Ends Building Boom in New York

The New York Times describes the current landscape for development in New York, detailing that even the most experienced developers are having problems getting projects off the ground.

The setbacks for development – perhaps the single greatest economic force in the city over the last two decades — are likely to mean, in the words of one researcher, that the landscape of New York will be virtually unchanged for two years.

125th Street MLB Project ‘Shut Down’

The Observer reports on the latest blow to the redevelopment of 125th Street, as the first office complex to be built in 50 years is scrapped.

Vornado had once wanted to build a 630,000-square-foot office building as a home for a Major League Baseball television network. The developers said they had tentative leases on only about one-third of the space, and thus Vornado couldn’t find financing to build the tower.

Bright Spots

The Post tries to shine some light through all the doom and gloom by talking to important real estate insiders who aren’t panicked citing good absorption and lower mortgage rates.

Plus, when the Fed announced last week that it was buying $500 billion worth of home loans from Fannie Mae and Freddie Mac, mortgage rates dropped. The average 30-year fixed rate available is now well below 6 percent.

Since the Fed announcement, Cohn says, “Phone volume has increased several hundred percent.”

A route to higher home values

Using data from Jeffrey Otteau, The Bergen Record reports on the effects of housing values in New Jersey and its proximity to a rail link.

Those increased values were even more evident in a slow market. This year Otteau revisited that survey, in central New Jersey, and found that homes within walking distance had values 10 percent higher than their counterparts’. Otteau said the findings would “certainly” hold true for Bergen County rail towns.

“This is true in the northern half of New Jersey,” he said. “The closer you get to Manhattan, the greater the effect.”

Whatever Happened To 'Central Park North?'

The Observer mulls over the once promising 110th Street that was destined to be New York’s next hot address, but development has come to a halt leaving 111 Central Park North the only luxury building on that stretch of the park.

“But that’s not going to happen for a while,” Mr. Davis continued. “No, nothing’s going to happen. For three or four or maybe five years, it’s going to take, it could take that long. To the point where people can build buildings again and it makes sense.”