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^^ I agree with the posters who have mentioned location. However, Hoboken is not the Hoboken of 10-15 years ago... and, there's not as much to be made in Hoboken today.
Similar to what the above poster mentioned, Harrison, parts of Jersey City (primarily near the Path Train), and I would even say South Kearny (where development is about to begin), and the northern most part of North Ironbound (and, even downtown Newark) are all areas that will see a great deal of value. Proximity to NYC (~20 minutes by train) and somewhat affordable (for now) housing will be the selling points in these areas.
That's not true. I just sold a property in Hoboken last year that I only had for 5 years. It appreciated 40% in that time frame. It sold in 24 hours with multiple offers. My former neighbors just sold their condo after owning it just 3 years at a $150k profit. The market has cooled somewhat, but you're still seeing gains of 5-10% annually there. Anything properly priced is selling immediately above asking with multiple offers. And you can forget about trying to nab a three bedroom condo without a bidding war. Anyone who thinks there's not much money to be made in Hoboken right now obviously isn't from there.
Are you asking because you are thinking of your house as an investment or because you'd like to know if it's going to keep up with inflation when it comes time to sell when you're downsizing?
I'll bet you'll do okay but housing is never the best option for a positive return for an investment, mostly because when the market is at its peak may not be the time you want to actually move and vice-versa.
To jay money - I definitely don't think of housing as an investment. Between transaction costs, closing costs, housing maintenance. Etc, very few people buying a house to be their primary place of residence should consider their home an investment.
I just meant in general, what people thought of the housing market and if it could continue to go higher. I'm sure no one who bought a house in 1990 for 200K ever thought it would be valued at double that in 2005 (yes I know it's a completely different market now, just an example).
I don't expect my house to go up much in market price in the next 5-10 years at all. It feels like with rates and supply so low we are at the top of the market now. But I guess who knows? I was thinking it would be annoying to sell for roughly the same price in 10 years and essentially lose 5-6% of the equity you built in your home to a broker. Hopefully we stay here for a long long time and that's never an issue.
Are you asking because you are thinking of your house as an investment or because you'd like to know if it's going to keep up with inflation when it comes time to sell when you're downsizing?
I'll bet you'll do okay but housing is never the best option for a positive return for an investment, mostly because when the market is at its peak may not be the time you want to actually move and vice-versa.
I'll have to disagree on this. If real estate isn't the best option for a positive return on investment, then what is? The stock market? Classic cars? A coin collection? No investment is 100% risk free. But real estate is as close as you're going to get. That of course is largely dependent on where you buy and how long you keep the property. History has shown that for the most part real estate almost always appreciates sooner or later if you own in a desirable market. And it usually out performs all other investment strategies on rate of return. All you need to to do is buy in a place that a lot of people want to be. Northern NJ certainly applies.
I'll have to disagree on this. If real estate isn't the best option for a positive return on investment, then what is? The stock market? Classic cars? A coin collection? No investment is 100% risk free. But real estate is as close as you're going to get. That of course is largely dependent on where you buy and how long you keep the property. History has shown that for the most part real estate almost always appreciates sooner or later if you own in a desirable market. And it usually out performs all other investment strategies on rate of return. All you need to to do is buy in a place that a lot of people want to be. Northern NJ certainly applies.
There are obviously a lot of different factors to consider. If you're someone that takes out a 30-year mortgage and takes the full 30 years to pay it off is going to be a lot worse off than someone who pays it off in much less time. That interest adds up quickly. If you don't have 20% down and have to pay PMI then that's another ding against you. If you buy a home and plan to live in it long term that's where you'll get your greatest investment since you eventually live mortgage free.
I'll have to disagree on this. If real estate isn't the best option for a positive return on investment, then what is? The stock market? Classic cars? A coin collection? No investment is 100% risk free. But real estate is as close as you're going to get. That of course is largely dependent on where you buy and how long you keep the property. History has shown that for the most part real estate almost always appreciates sooner or later if you own in a desirable market. And it usually out performs all other investment strategies on rate of return. All you need to to do is buy in a place that a lot of people want to be. Northern NJ certainly applies.
Given the relatively high acquisition AND selling costs, I don't see how this is possible. I'd find it hard to believe that, on average, an investment in real estate would outperform the S&P 500 when you account for the costs associated with buying, selling, and maintaining a home.
And as someone else has already brought up, you may not necessarily be in a position to sell your home at the peak of the market. With other investments, a sale is as easy as the click of a mouse and will cost you all of $7.
All you need to to do is buy in a place that a lot of people want to be.
Unless, of course, your home ends up being in a flood zone when they build a new highway or they discover that the local playground was built on a superfund site, or a train overturns carrying oil and catches on fire. I mean, by your logic, all you need to do in the stock market is only buy the ones that are going to go up. What's the big deal?
Things happen. My parents have bought and sold ten houses over their lifetime, never made a dime. A lot of it was probably that they sold sooner than they would have preferred due to job moves or whatever, but again, sometimes when you sell your house isn't up to you. If someone in NJ needed to move over the past seven years they were probably going to sell underwater even though this is where a lot of people want to be.
You also don't have to pay maintenance on stocks like you do a roof or other major repairs. We moved in and needed a new heating system. No stock has ever required me to drop another 5K in order to use it. Time is also an issue, I've taken time off from work to wait around for plumbers, no stock ever makes me do that.
Investment properties aren't what I'm talking about here, I'm talking about your place of residence, and if you ever make money when you sell it then you should count your blessings, but I certainly don't have making money on the house as part of my personal retirement plan.
There are obviously a lot of different factors to consider. If you're someone that takes out a 30-year mortgage and takes the full 30 years to pay it off is going to be a lot worse off than someone who pays it off in much less time. That interest adds up quickly. If you don't have 20% down and have to pay PMI then that's another ding against you. If you buy a home and plan to live in it long term that's where you'll get your greatest investment since you eventually live mortgage free.
Mortgage interest is tax deductible and makes for a nice tax shelter for income tax. So all of that money doesn't just go out the window. PMI I agree is a ding on the value of the investment. Most people do not stay in the same home for 30 years. Studies show the average stay of a first time buyer of a single family home is 11 years, and it's 15 years for those who are not first time buyers. So those people are selling, paying off the mortgage balance, and using the equity for all closing costs and down-payment on the next home.
My second home cost $250k more than my first home. I paid all closing costs of buying and selling both properties, and furnished the new home without going in my pocket. Sounds like a good investment to me. Look at it this way: you're going to be paying a lot of money each month for your housing expense either way. Might as well pay towards an appreciating asset, so you walk away with something to show for it.
We own a two family dwelling and it costs me about $1,000 a month to live there since the upstairs is rented out. So for $1,000 we get 2 bedrooms, finished basement, landscaped yard, driveway, and a garage in Bergen County. In about a year or two, we will rent out the full home and have a positive cash flow of about $600 each month. This home will pay for itself + a little extra. So real estate can be a positive investment in some cases. Now, when we buy a single family home in a desirable neighborhood, if we do the traditional 30 yr loan, then I don't think that will be a good investment but the school district/neighborhood will be worth it.
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