| The price difference between various real | | | | Brooklyn Heights selling for about $750 a |
| estate markets is what many people try to | | | | square. Since Downtown Jersey City is at |
| profit from. I call this the spread. For | | | | about $550 per square foot, then this would |
| example, Manhattan residential real estate | | | | imply a spread per square foot of $200 ($750 |
| prices are roughly $1000 a square foot. | | | | - $550) between Downtown Jersey City and |
| Downtown Jersey City and other equivalent | | | | Brooklyn Heights. |
| outlying urban areas of Manhattan, such as | | | | |
| Brooklyn Heights and Park Slope, might be | | | | I am looking for those spreads to narrow. A |
| $600 a square foot. That makes the spread | | | | lot of development is transpiring in Downtown |
| between those markets about $400 ($1000 less | | | | Jersey City. This will probably keep prices |
| $600) a square foot. | | | | down in the near term (next couple of years) |
| | | | as a lot of inventory comes on the market and |
| Bond traders or people that trade stocks look | | | | requires market absorption. However beyond |
| for or observe price spreads. Bond traders | | | | the next couple of years as Downtown Jersey |
| refer to the spread in basis point and in | | | | City improves, I believe those spreads will |
| yield to maturity. So if a corporate bond | | | | narrow. |
| yields 8% and an equivalent term US treasury | | | | |
| bond yields 6%, then they would say that | | | | As larger developers further their projects |
| corporate bonds trade at a spread of 200 | | | | and advertise their projects on an |
| basis points or 2% (8% - 6%) to US | | | | international level, more attention should be |
| treasuries. | | | | brought to bear on Downtown Jersey City. I |
| | | | speculate that Donald Trump has every |
| In real estate people reach out to more far | | | | intention of marketing his Trump Jersey City |
| reaching real estate markets in the hope that | | | | beyond the local markets. Plus let's not |
| those markets may mature or improve and that | | | | forget about the new $130 million dollar |
| the price may rise closing the spread between | | | | international golf course over at Liberty |
| that market and another. | | | | State Park. This is all free advertising on |
| | | | the coat tails of these projects and I |
| Example: Brooklyn Heights versus Downtown | | | | further speculate that these projects will |
| Jersey City. | | | | bring international attention to Downtown |
| | | | Jersey City. |
| In Brooklyn Heights versus Downtown Jersey | | | | |
| City, I observed there to be a significant | | | | So expect to see some price spread movements |
| price spread. The selling price per square | | | | between the above mentioned markets over the |
| foot for housing in some comparable | | | | next ten years. Although there is no |
| neighborhoods of Brooklyn Heights can be | | | | guarantee that the spreads will narrow, I |
| significantly higher than in Downtown Jersey | | | | speculate (based on the above circumstances) |
| City. | | | | that the probabilities point to the spreads |
| | | | narrowing rather than widening. |
| Recently I previewed several properties in | | | | |