(ABOVE: Craig Wallace Dale photo)
by Christopher M. Halleron
A generation ago, Hoboken’s entire waterfront was either dockyard or industry.
Today, it’s one of the most sought-after real estate markets in the greater New York Metro Area. While the market here in Hoboken has been robust since the 1990’s, recent developments catering to a luxury demand indicate a sharp turn for Hoboken—one that will have a lasting impression on the city’s visual and socioeconomic landscape.
Of course there are plenty of sides to this conversation. Hoboken has long been the western front of our region’s fierce gentrification battles—for our purposes here, we’re looking primarily at the housing market itself, and what factors are currently driving it.
WHY HOBOKEN, WHY NOW?
We all know the most important aspect of real estate… but Hoboken’s geographic location obviously hasn’t changed. So what is it that suddenly makes our Mile Square City such an enviable address in the New York Metro Area?
“Manhattan’s and Brooklyn’s ever-rising prices are certainly a big contributor,” says Darrell Simmons, of the renowned real estate website JerseyDigs.com. “NYC’ers have become more receptive to New Jersey.”
Simmons’ colleague at JerseyDigs.com, Christopher Fry, adds, “The general shift back towards urban areas that is happening in a sizable chunk of cities around the country is also likely helping Hoboken’s appeal. Many walkable urban areas around America are growing much faster than suburban or rural ones, statistically speaking. Hudson County is the fastest growing county in New Jersey, so naturally that growth, plus the location, would mean new development would include high-end homes.”
“But Jersey? Really?!?”
Many a Hobokenite has heard that smug question at cocktail parties over the years. Yet lately, the question has been completely turned around to ask, “Just how much better is it?”
“The Jersey stigma is fading,” says Joe Stingone, of Century 21 Innovative Realty. “If your budget is $2 million, you could almost have the pick of the litter here versus what would be available in NYC.”
Says Simmons, “Over the last two decades, Hoboken has seen fairly consistent development. But as far as when it moved from a developing community to a high-end market, I’d say it started around the tail end of the 07-08 run up, stopped, and then started back up more recently. I’d estimate in the last five years that the market has really transitioned into high-end luxury.”
That high-end luxury market hit its peak (to-date) earlier this year, when 504 Hudson Street sold for a record-breaking $6.5 million.
“504 Hudson offered a unique combination of features that had never been seen before within the Hoboken market,” say Matt Brown and Peter Cossio of Halstead Properties/Hudson Realty Group. “The location, size, historic details and the recent renovation—plus a two-car garage—made this property incomparable to all other townhomes previously offered for sale. The price reflected the rare opportunity this house presented.”
With 504 Hudson raising the bar, homeowners throughout Hoboken sat up and took notice, realizing that their little slice of paradise might suddenly be worth a heck of a lot more than they ever imagined. Homebuyers in the Metro New York Area, meanwhile, simply want to find a good spot in the 07030 zip code while they can.
“The biggest factor affecting the Hoboken housing market is the fact that people are staying here longer. This renewed commitment is driving improvements in quality of life, schools and the housing stock. Bigger is better now, and it appears that the trend is here to stay,” says Stingone. “Demand for large-format homes is still strong but I feel that the upper end of the market is still finding its footing, so it will be interesting to see how it firms up.”
Says Fry, “The newer, higher-end inventory has drawn a certain crowd, but there’s only so much in Maxwell Place and the like.” He adds, “The ‘head west’ mentality—for buyers wanting more bang for their buck—was always going to be there and I think the inventory is starting to catch up with that.”
WHAT DO PEOPLE WANT?
Hoboken’s flophouse/frathouse days are seemingly in the rear view, as a larger portion of incoming residents are looking for more than just a three-bedroom railroad to split between their four college buddies. That said, if Gothamites are going to technically forsake the “New Yorker” title by crossing the Hudson, they want something more than they’d find in Manhattan (or even the far-flung outer reaches of Brooklyn, for that matter).
“Parking is very high on the list, but it’s still location and high-end finishes,” says local developer Tom Chartier, of the Chartier Group. “Outdoor space and a view is definitely on the wish list, but not mandatory—as is building amenities such as health clubs and pools.” Other, conscientious factors indicate that the savvy consumer might be drawn to a better overall design. “LEED has been around for 16 years,” says Chartier, “but it’s only now becoming mainstream. Buyers/renters are starting to become more educated as to the fact that ‘green buildings’ aren’t just about climate change and global warming, but they are superior buildings: better sound proofing, better comfort, better air quality, lower utility bills and visually more attractive—as is the case with green vegetated roofs.”
There are also assets that are unique to Hoboken.
“View is a big one in Hoboken,” says Simmons, adding, “The historic brownstones/townhouses are a big draw, too. Outside of that, there’s ease of lifestyle, amenities, parking, outdoor space—Hoboken has significantly more options for homes with outdoor space than Manhattan.”
While world-class vistas and outdoor space can certainly draw the eye, it’s what’s inside that sets the hook. Contemporary homebuyers are often looking for an added value. “I’m seeing more and more homes with home automation technology where you can control almost everything from a phone,” says Simmons. “People love gadgets.”
To make room for all this demand, there has been as noticeable presence of construction crews here in Hoboken—not just on the newly developed fringes, but also right in the heart of town.
“We prefer to see properties restored on the exterior to maintain the integrity and historic character of Hoboken’s architecture, but we also appreciate that it is not always a viable option and that it becomes necessary to tear down some of the more deteriorated properties,” say Brown and Cossio. “We would hope that developers are sympathetic to the streetscape and the essence of Hoboken, while providing the necessary inventory the community needs.”
Indeed, not all structures can be effectively restored—and for a variety of reasons. Codes have evolved, environmental factors have changed and individual units are in various states of repair.
“Some of Hoboken’s legacy housing has exceeded its useful life and should be replaced by more resilient and modern construction,” says Stingone. “Thankfully, the professionals designing the majority of these new developments do take cues from adjoining buildings and streetscape so that so that the old is married to the new, while maintaining the signature nature of architectural design.”
“Most of the developers I work with are very conscious of preserving the character of the city,” says Chartier, “which I’m sure will come as a shock to a lot of the activists in this town, but it’s true.” He adds, “Unfortunately the zoning, specifically the flood ordinance, along with the condition of the building (lack of fireproofing, water damage, poor foundations, etc.) is what forces a building to be demolished rather than rehabbed. The new construction is then designed with a modern, contemporary look, which is what buyers and renters want.”
Recent history certainly underscores the dangers for a town that’s so focused on the real estate trade. Yet the growth seen in the past few years is markedly different from that which occurred prior to the recession of 2008.
“For one, the growth is not being driven by artificial demand caused by subprime lending. Most mortgages today are requiring 10%-30% down, whereas, in 07-08, you had no document, interest-only and no down payment mortgage options. That clearly was a recipe for disaster,” says Simmons.
Adds Fry, “Hoboken’s inventory is also on the low side, partly because the recession knocked out a lot of planned projects. I think you’re seeing the correction of that now, particularly on certain roads in the city’s western half where new construction sites seem to be popping up regularly.”
Which leads to the obvious question—where’s Hoboken’s next hotspot? Like asking for Hoboken’s best pizza joint, you can expect a variety of answers…
“Hoboken’s next hotspot is probably the northwest section of town, which has potential to be transformed into an interesting area with its own commercial district, independent of Washington Street,” say Brown and Cossio,
Fry concurs, adding, “I think the area around the Wonder Bread factory has great potential as well… and there’s also another interesting mixed use building approved at 726 Grand Street.”
Says Stingone, “I like SW Hoboken as the SW Park is finally underway, and Hoboken’s western edge from 6th street north to the viaduct.”
Featuring a multitude of up-and-coming neighborhoods within one square mile, all minutes from Manhattan, Hoboken—yes, you read that correctly, Hoboken—continues its evolution as one of the area’s most dynamic luxury real estate markets.