It’s a decade-old story written along New Jersey’s Hudson River Gold Coast. Urban revitalization from Bayonne to Ft. Lee has brought upscale residential high rise buildings to City skylines and chic boutiques, restaurants and nightlife to bustling downtown districts. Cities such as Hoboken, Jersey City and Edgewater have emerged as a popular destination for homebuyers from Manhattan and Brooklyn who cross the river for lower prices and a high commutability factor.
The residential boom taken place over the past ten-plus years has, however, separated itself from one very important buyer segment – the first-time purchaser. The National Association of Realtors forecasts more buyers entering the market in 2015 driven by an improving labor market and historically low interest rates. First time buyers have historically made up 40% percent of home purchases. And while that percentage dropped to 33% in 2014, it’s expected to rise next year as Millennials, often referred to as the “rent” generation, have been changing their attitude towards homeownership and opting to benefit from a favorable buying climate to become homeowners.
“This is an ideal environment for young purchasers and the time to act is now,” says financing expert Rolan Shnayder of H.O.M.E Mortgage Bankers, an active lender in Bergen County. “Interest rates can’t go much lower than they currently are. As the economy continues on a path to recovery and government stimulus on mortgages expire, rates are likely to rise before too long. In the new construction market, many developers are offering packages which lower downpayments and make the initial investment more affordable.
“When you add it all up and complete a comparison of rent vs. buy, it’s cheaper to own a home of your own. Well-educated and informed Millennials are taking note and entering the market to make their purchase.”
In fact, a recent report by real estate website Trulia found that homeownership is 24% cheaper than renting in the New York City area and 38% nationwide. This is further strengthened by the decade low mortgage rates and financing programs that lower initial investment.
The question is where should these single-professionals, young couples and families turn? The surge in popularity of the Gold Coast Cities of Hoboken, Jersey City and Ft. Lee has left a dwindling inventory of homeownership opportunities that are within the budget of first-time buyers seeking an upscale urban lifestyle and ease of commutability.
“We are seeing homebuyers from throughout the spectrum who want a living environment similar to what you’ll find in Hoboken or Jersey City, but can’t afford the high prices of luxury condo buildings and townhomes directly on the water,” says Melissa Rivas, Realtor Associate at Hoboken-based Liberty Realty. “They are asking for housing options in surrounding municipalities that provide more space, views of Manhattan, well-amenitized buildings and a quick trip to New York City. Unfortunately, the inventory of homes which fulfills all these desires is limited.”
A similar situation exists in Bergen County, N.J. An increase in the number of young families and single-professionals entering the buying game has left a crowded field with few affordable for sale homes near the waterfront.
“Opportunities to purchase a brand new residence in the Ft. Lee market are limited with the majority of new construction buildings in the Borough such as The Modern, Hudson Lights and Twenty50 offering only rental homes,” says Ann K. Lee, a real estate agent with Eastern International Realty in Ft. Lee.
High pricess and lack of inventory has led to an expansion of the Hudson River “Gold Coast” into western neighborhoods that provide affordable luxury, lower housing prices and similar public transportation access to Manhattan. Many of the new communities in Cities just off the riverfront provide the perfect buying environment for those looking to purchase their first home in terms of affordability, space and commuter convenience.
For example, Ms. Rivas has completed several sales at The Lenox on Central Avenue in Union City which has drawn the attention of young professional homebuyers from New Jersey and Manhattan to Brooklyn and Queens. The Lenox offers upscale condominiums, Manhattan-style amenities and a convenient location minutes from New Jersey Transit busses to Manhattan. Homes are priced to appeal to buyers currently renting in New York City, Hudson County and beyond with condominiums starting at $179,000.
“At the Lenox it starts with the pricing,” points outs Ms. Rivas. “Buyers can choose from a selection of floorplans that are generous in space and offer the latest in designer finishes and appointments at a price that’s well within their budget. In fact, there are condominiums priced under $300,000 that provide incredible panoramic views of New York City that can’t even be found on the Hudson River waterfront. It’s a buying opportunity that is rarely found west of the ‘Gold Coast.”
Developed by Sun Equity Partners, The newly-released studios, one- and two-bedroom residences at The Lenox are approved for favorable financing programs offered by the Federal Housing Authority (FHA) that require only a 3.5% down payment, an added benefit for former renters looking to make the move to ownership.
“As more buyers learn how attainable homeownership is at The Lenox, I fully expect a new wave of renaissance,” says Ms. Rivas. “The FHA financing considerably lessen the amount of money needed to purchase and historically low interest rates make owning at the Lenox comparable to what many are paying in monthly rents.”
Loren Kleinman is one first-time homebuyer whose search led away from traditional Hudson River Cities to the Lenox. Ms. Kleinman was already enjoying one of New Jersey most dynamic downtown environments in a rental home in Montclair, N.J., widely known for its restaurants, culture and nightlife. Yet, something was still missing. Ms. Kleinman wanted to be closer to the world-renowned entertainment and business pursuits of New York City.
To find her new address, Ms. Kleinman enlisted the help of Paul Marques of Weichert Realtors Hoboken office. Her initial search took her to condominium buildings in Jersey City and Hoboken.
“We found both Cities to be too expensive,” Ms. Kleinman recalls. “The pricing at The Lenox provided great value which is enhanced by the fact heat, hot water and gas, along with all the amenities and building security, are included in the maintenance fees. The City’s tax abatement helped keep the cost moderate and played an additional role. Of course, the proximity to Manhattan is ideal. The complimentary on-site shuttle to the Hoboken PATH Station is perfect.”
The M at Englewood South located minutes from the George Washington Bridge in Bergen County has also seen the need to satisfy the growing number of young buyers and work to carefully craft programs aimed at make homeownership more attainable, Mr. Shnayder points out.
“First time homebuyers have two main obstacles when purchasing, coming up with the downpayment and keeping monthly payments at a place where they’re affordable,” he says. “At The M an affordable price structure combined with today’s low interest rates allows for monthly payments that are comparable to some area rents and within the budget of young homeowners. The sponsor of the community has also created a special 90% financing package that minimizes the downpayment to less than 20%.”
The M at Englewood South has been designed to add value in a market dominated mainly by high-priced rentals and older,
expensive single-family homes. The community offers well-appointed condominiums priced from just $300,500 and limited-time Incentives that provide up to $10,000 off the purchase of a one-bedroom home and up to $20,000 off when buying a two-bedroom condominium.
“Many of our homebuyers have shopped around Bergen County and are pleased to discover The M at Englewood South which offers brand new, luxury homes and a high level of affordability,” says Nick Hollenbeck, Sales Manager for The Marketing Directors, the exclusive sales and marketing agent for The M. “They’re excited to enjoy the many advantages of homeownership including building equity, appreciation, tax advantages and a considerable sense of pride, while living in an active, neighborly community a short commute from Manhattan.”