Yesterday I continued my buyer’s search for an apartment in New Jersey, this time leveraging the Century 21 website. I set filter refinements to focus on Hudson county condos under $150,000, and soon I came across 277 Harrison Ave, Journal Square, NJ 07304: a 1-bedroom and 1-bathroom apartment boasting 561 square feet, all for $129,000.
The next thing I did was to check the commute to two points in Manhattan: one Path’s St. Christopher’s Street; the other is Penn Station. This gives an excellent gauge of how long it may take to get to 90% of Manhattan offices via public transit, and I was glad with what I saw as both showed routs taking under 55 minutes:
Commute from 277 Harrison Ave, Journal Square, NJ 07304 to
I am generally happier with the 30-40 minutes range as you have to factor in morning delays, but I was willing to disregard the longer commute in favor of Lincoln Park: a green island of considerable size offering respite from the overly urban areas around Manhattan. The next step was to calculate mortgage payments, which was easy as I have a preset Google Sheets template that does it for me. With 5% down payment ($6,450) on a conventional 30-year mortgage at 4% interest rate my monthly payment showed as $585.07, the first month’s principal-to-interest split being $176.57 to $408.50. With the PMI of $51.06 this came to under $640 and seemed a great start… but of course, buying an apartment in New Jersey is not that easy.
Crime Rate Spoiler
The first red flag came up when I searched the same apartment on Trulia and discovered it had been listed for sale there for 301 days. Usually this is the end of story because if a property doesn’t sell for that long something has to be wrong. And a quick look on the crime map that Trulia offers gave a clue: the house was in the Hign Crime zone, dangerously close to the Highest one:
Frankly, this should have been end of discussion, but I still played devils advocate, asking myself: does 561 square feet near a park for $640 in monthly mortgage payments outweighs high crime rates and a relatively longer commute to Manhattan (the answer is a no, but remember: we’re buying in NJ!)? Without seeing the place, it was only the numbers I could rely on, and so I did… only to be shocked further.
Taxes and HOA fees
You probably know enough about taxes for me to skip on discussing them here, but HOA fees is what you have to pay, usually monthly, to the apartment building for whatever that building needs to do to take care of itself. Sometimes it includes heat, water and hot water, but it also may not include any of that.
Well the HOA for 277 Harrison Ave, Journal Square, NJ 07304 did include hear, water and hot water. But it was also… $467 monthly. Add to that $257 in taxes ($3,089 in 2017), and you’re looking at $725 before mortgage. Add the mortgage, and we are over $1,350 before electric, Internet, and insurance, but at this point it doesn’t make sense to factor them in: this apartment is a definite “pass”, and even a price decrease of $20,000 may not make it attractive enough.
Conclusions on 277 Harrison Ave, Journal Square, NJ 07304
This is a great example of what kind of rough a home buyer has to dig through in New Jersey before encountering something worth buying. The funny thing is: it is quite possible that, had the HOA fees and taxes been lower, this apartment would not have stalled for over 300 days, but even for $2,000 in taxes and $250 in HOA fees it is still not worth $129,000 for someone who has to commute to Manhattan. Oh, did I tell you the apartment was on the first floor, watching right into the High crime zone… You get the point: when buying an apartment in New Jersey, do you homework at home.