ties. According to Richard Bassuk, president of the New York
City-based Singer and Bassuk Organization, which brokered
the deal, his firm initially talked to various Fannie Mae DUS
lenders and Freddie Mac seller servicers. The nod eventually
went to Wachovia Capital Inc. as the DUS lender representing the borrower with Freddie. Ultimately, it came down to
creativity in this current market.
“Wachovia and Freddie Mac were very responsive,” Bassuk
says. “They provided the proceeds requested by the borrower
on very advantageous terms.”
Beyond rental, of course, there’s the home-sales factor,
which can call the shots for multifamily via the condominium/-co-op market. And condos and co-ops aren’t just for America’s
cities anymore.
In general terms, the
Denver-based Integrated
Asset Services recently
released a report indicating that for the most
recent month, housing
prices dropped nationally
to the tune of 1.7%, projecting an annual decline
of nearly 13%. “Housing
prices at the national level
continue to look bleak,”
says a spokesman.
The biggest declines
year-over-year are coming
in the South and West,
which are looking at
drops of 10.2% and 18.7%
respectively. By, comparison, New Jersey and the
Northeast in general are
estimated to be looking at
225 Grand: Rising with new financial backing.
a year-over-year decline in
the 1.8% range.
Time to buy, and thereby give the market a positive jolt?
The reply is mixed, but a new report from the Center for
Economic and Policy Research in Washington, DC has a four-word response to the price picture: “Let the prices fall.”
Calling it a “straightforward solution to the turmoil in the
housing market,” CEPR’s report, “The Key to Stabilizing
House Prices: Bring Them Down,” asserts that “prices are still
hugely out of line with trend levels in bubble markets,” and
calls for Freddie and Fannie “to restrict the buying of mortgages in these areas.”
Would that lead to fewer loans issued in overpriced markets
and market adjustments?
“Most policy analysts failed the public by missing the housing bubble,” says CEPR co-director Dean Baker, who co-au-
thored the report. “By simply limiting the flow of capital into
bubble-inflated markets, the GSEs have the opportunity to
bring stability back to the housing market by helping prices
return to trend levels.
“If Fannie and Freddie no longer supported the purchases
of homes at bubble-inflated prices, there would be a quick
price decline of 20% to 30% in the most over-valued markets,”
he says. “After this drop, homebuyers need to be less fearful
of further price declines, both boosting demand and reducing
vacancy rates. At the same time, the consequent flow of loans
into non-bubble markets would help prevent a downward
price spiral in these areas and avert the risk of overshooting
on the negative side.”
Price sensitivity or not, if one picks their spots, home sales
are indeed continuing in
certain New Jersey markets. But those markets
can be very specific, because developers continue
to report slackened sales
in many places across the
Garden State. Quarterly
reports emanating from
some of the state’s biggest
homebuilders continue to
bear that out.
Jersey City is one of
those places where home
sales, specifically the
condo variety, continue to
do well. One key factor is
its proximity to Manhattan, to which Jersey City
has emerged as a lower-cost alternative, relatively
speaking. For example,
a spokesman for Metro
Homes, which is joint-
venturing Trump Plaza Jersey City with the Trump Organization, reports that the 55-story tower has sold out 375 of its 444
luxury condo homes in a year.
Another property doing well in the sales category in Jersey
City is The Beacon, the restored former Jersey City Medical Center. It’s a project of the New York-based Metrovest Equities.
On balance, New Jersey multifamily is decidedly a mixed
bag but holding up better than other commercial real estate
categories. Rental properties continue to trade on the investment sales market, though not as they did in the recent
past. Financing is there, if not in great quantity, for properties with the right characteristics. And home sales are off,
although not as much as other parts of the country, and not
in certain niche markets. —RENJ
