From the New York Times:
In Housing Contest, Cities Take the Lead
IF the residential real estate market were a competitive sport, the two contenders in the 2006 Big Game would be the Suburban Single-Family Home team versus the Urban Village Condominiums.
This year, the sideline report on the contest might go something like this: At this point in the season, the Suburbans seem to have lost the edge. They look a little lackluster now against the big-city crew, which has shown surprising resilience during a tough summer and fall. The Urbans are muscling ahead, and their fan base is building, as more and more seem to enjoy a metropolitan style of play.
All right, blow a whistle on the analogy. Still, a number of developers and home builders seem to think there is not enough demand in New Jersey these days for both suburban and urban markets to prosper, and most are betting on city living.
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“The suburban market is still moving along” in New Jersey, Ms. Skarka said, despite the severely slowed sales pace and falling prices of the last six months. People are still buying single-family homes, she said, “but as a company, we’ve been focusing on our urban division for a while now because that’s where things are going really well,” and home values are holding up better, too.At Port Imperial, Lennar and its partner, the Roseland Property Company, converted a rental building to add 344 condos to the mix this year, and most have been sold. Construction also began on 158 new condos: 94 tower residences and 64 four-level town homes. More than half sold before the framing was finished.
“We have done detailed research with focus groups at Port Imperial to see what lifestyle people are looking for,” Ms. Skarka said. “We found that cities are drawing them like a magnet. People don’t want to feel isolated. They want the ability to interact, and to have city lifestyle amenities.”
Next year, work will begin on the Artesian at Port Imperial, designed as a sleek all-glass structure to house 196 high-end condo units. Lennar will also start building Reflections in Atlantic City, a six-story building with 179 “ultraluxurious” condos featuring balconies overlooking the ocean, but those units are most likely to be second homes, Ms. Skarka said.
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On Hoboken’s west side, Tarragon is developing the Upper Grand complex, which will encompass 1,160 condos and 240 rental units in nine buildings covering eight blocks.“The lack of rental units is provoking people who might otherwise have waited to buy to move ahead with purchases,” Mr. Friedman said.
He said he also thought that slow sales of single-family suburban homes might be beginning to sap the strength of the condo market.
For example, in Edgewater, where Tarragon is opening One Hudson Park, a glass condo tower, sales have been slower than expected. Young professionals are signing contracts in the numbers expected, Mr. Friedman said, but not empty-nesters.
“The empty-nesters have to sell the houses they have,” he said, “and they’re having trouble doing that.”