Market for Condos, Apartments is Small but Growing

In Maplewood, condos and apartments represent a tiny slice of the real estate market. But it’s a slice that is growing, if slowly, despite the economy.

Two years ago, Springfield Commons was completed across from the Hilton Branch of the Library, bringing 18 new condo units to Maplewood. In February, NJ Lofts began offering the 15 condos at Yale Street Commons for sale. And the developer is planning another 15 condo units across the street at the former site of Bumper to Bumper at Springfield Avenue and Yale Street.

But not all condo plans have gone forward. Condos were previously proposed and approved for the Redevelopment Area II on a portion of the former Universal Chain site in the Hilton neighborhood bordering on DeHart Park, those plans were scrapped when the original developer, K. Hovnanian, had to bow out of the project due to market forces and its own financial woes. Now, the Township is looking at possibly approving the development of 124 rental units for that site—a proposal that comes with its own set of questions.

According to the Garden State Multiple Listing Service—the service that is accessible only to licensed real estate agents—Maplewood has 7,406 line items (line items are individual land parcels). That includes every property in Maplewood, whether it’s commercial, residential, governmental or religious. Of those, less than 300 are condos (getting an exact number is difficult as some entries under “condos” are faulty).

Condos currently exist on Highland Place, Springfield Avenue, Ridgewood Avenue, at The Top on South Orange Avenue, on Valley Street next to the News-Record and off Boyden Avenue at the Maplewood Village Condominiums, with some others scattered about town. Winchester Gardens also is technically a condo development, though restricted for those 55 and over.

Why So Few Condos?

Why so few condos in Maplewood? According to one realtor who spoke to us off the record, Maplewood and its neighbor, South Orange, were already built by the time “condos were invented.” Unlike, say, Basking Ridge, there are just not many places to put condos in Maplewood and South Orange.

According to Toni Johnston of NJ Lofts, the developer of Springfield Commons and Yale Street Commons, all of the units at Springfield Commons were sold (though NJ Lofts no longer manages the property). This differs from information from Mayor Vic De Luca, who said that half the units had sold and half had been rented. Johnston would not say how many units had sold thus far at Yale Street Commons. When Patch visited the site in late April, Johnston said that units had only been on the market for the last two months. Clearly the building was still under construction although one apartment was completed and beautifully furnished for show.

Johnston felt there was still a market for condos in Maplewood despite the economy, though she did not elaborate on why. She did say that she herself is a local native and Columbia High graduate and that she had been telling NJ Lofts Principal Dale Caro for years that he should develop properties in Maplewood. Caro has previously purchased and upgraded properties on Springfield Avenue, including the office building at 1550 Springfield Avenue.

The Yale Street Commons Web site touts the units’ luxury finishes, hardwood floors, stainless steel appliances and marble counters. The 2-bedroom units range in price from $329,000 to $369,000. However, the Web site does not sell Maplewood as a location (for example, proximity to jitney/train, local shopping, distance to airport, etc.).

So Who's Buying?

Who is buying condos in Maplewood? Sally Rowe of Remax says that the typical condo buyer is “those people who are dipping their toes in suburbia.” They hail from New York City and Hoboken, and first buy a condo, then upgrade to a house, especially after starting a family.

“It’s a stepping stone,” Rowe said. She noted that conversely, “I’ve had people use them during a divorce until they can go back into a bigger house.” Also, people in the midst of job changes and relocating to the area are yet another market segment for condos. Garden State MLS shows Maplewood condos in the last 12 months selling for a low of $130,000 to a high of $360,000.

Rolin San Juan was a condo owner for years (1999 to 2006) at the Maplewood Village Condos on Meadowbrook Place near the Municipal Pool. San Juan moved when he bought a two-family house behind his business, Bodies in Motion, on Valley Street. “I loved living in the condos," he said. "It’s a beautiful area.” San Juan said he would like to go back to condo ownership at some point in the future.

Local realtors agreed that the condo market is mostly singles and young couples starting out and not empty nesters. They concurred that “people who are retiring and downsizing and who want to own property are moving out of town due to taxes. And they don’t need the train anymore.”

But Sally Rowe of Remax made a clarification: While many empty nesters were leaving town, there was a market for this crowd in very high-end luxury condos such as The Top on South Orange Avenue (which actually is located within Maplewood). There, condos have sold for more than $1 million, with the highest amount paid being $1.8 for a penthouse apartment in 2007. Rowe says that these well-to-do retirees are often “snowbirds” who are looking for luxury units that require little maintenance and that they will occupy for only 6 months a year in order to visit the kids and see the grandchildren.

Rental Market May Have Potential

Realtors had little to say about the Maplewood rental market since, they reported, people tend to cut the “middle man” out of that rental transaction, avoiding fees, and responding directly to ads. Still realtors knew of scattered rentals throughout town and on Dunnell Road (which a friend of the writer calls the “Boulevard of Broken Dreams” due to the number of divorced dads renting there).

Martina Beumelburg provided another view on the Maplewood rental scene. Martina and her husband Christoph came to Maplewood from Germany in March 2006 and rented a single-family house on Oakview Street for three years. Christoph works for BASF and they rented from another BASF employee who was being transferred to Germany. Martina noted that the rental arrangement gave them the flexibility to be transferred fairly rapidly without the need to sell or buy a house.

“In Germany, we are all very much used to renting because not everybody owns a house in our country,” Martina added. Property ownership in Germany is less than 40 percent as compared to the U.S., where it has reached over 60 percent.

Mayor Vic De Luca believes that Maplewood needs more rental properties targeted at older residents.

De Luca says the Township Committee will consider lifting the requirement that the 124 rental units at the Universal Chain site be restricted for 55 and older this summer. The request has been made by the current developer, Elite Properties. De Luca believes the Township Committee may be amenable to this change in this difficult economic market, “but nevertheless we want an affirmative marketing plan to seniors. We want to work hard to identify empty nesters and also target professionals (who would use the jitney and train connections), plus singles and couples.” De Luca says that research shows that the units—which are relatively small 2-bedroom units—should attract few children and therefore not create an undue burden on the school district. He points to Gaslight Commons in South Orange as an example. The 200 rental units there have added about eight children to the district.

Says De Luca, “This is a part of the mix of housing that Maplewood doesn’t have right now.”

De Luca stated that, while the over-55 condo market is weak, at least for non-super-luxury, the market for over-55 rentals is stronger (that age group was a noted target market in discussions over the old police station). He noted that retirees who rent don’t have to deal with property taxes, maintenance issues or the need to sell their property ultimately. They don’t need to build equity. Finally, they enjoy apartment amenities like elevators and garage parking and a building superintendent who shovels snow.