It’s safe to say that spring of 2020 has been one of the most tumultuous in current memory, due to the global pandemic. New Jersey’s stay at home orders only recently lifted on June 9, and businesses are slowly and cautiously starting to open back up. Coming out of a 3-month stay-at-home order, it’s hard to imagine what life and how we conduct business will be like in the near future, and the same goes for the real estate industry.
However, here are some top recent trends – over the last 2-3 months – our team has noticed for the rental and housing market in Northern New Jersey.
Leaving the city for more space
While it’s still too soon to know for sure if this will become a lasting trend (we only have Q1 data to go off of at the moment), our team in New Jersey has seen an influx of calls from people currently living in the city, curious about moving to the suburbs.
“We have been getting a lot of interest from people looking to leave NYC for more space, more outdoor access,” commented Pamela Roman, Station Cities’ managing broker of New Jersey. “Showings are picking up, and Zillow leads are rolling in.”
You’ve most likely read stories of some New Yorkers fleeing to their more rural summer homes once stay-at-home orders were put in place. With New York City being “ground zero” for the United States’ coronavirus cases, it makes sense that those living in the close quarters of the city would start to feel claustrophobic, especially when social distancing is near impossible in certain situations like riding public transportation or picking up items in smaller grocery stores. Now that NYC has the spread of the virus under control, will the suburbs of New Jersey, upstate New York and Connecticut continue to see an urban migration? Only time will tell.
Rent prices are holding steady
While the number of new listings and the average price of those listings have both gone down slightly compared to this time last year, rental prices are holding steady. According to NJMLS, average residential rental list price is slightly up from spring 2019, seeing an increase of 0.8% overall. Average prices in counties vary – while Hudson and Essex Counties have seen a -6.4% and -9.3% drop, respectively, other counties increasing prices make up for the loss.
One reason for the steady (or slightly increasing) rent prices could be the lack of new rental listings compared to spring of 2019. Recently, we’ve seen a 10% decrease in new rental listings overall.
New listings are down
You can probably blame the coronavirus for this trend; stay-at-home orders all but froze life as we knew it for the last 3 months, and that included real estate. While the industry has found innovative solutions for home buyers, such as offering virtual tours, many people are still waiting to list their homes. For Q1, new listings were down nearly 24% compared to the same time in 2019, making it a seller’s market.
An overabundance of eager buyers, low mortgage rates, stable housing prices, and positive employment rates throughout Northern New Jersey has created a perfect storm for those looking to sell. As the economy continues to open back up, expect prices to rise.
Real estate agents are adapting
Unlike other areas of the country, real estate was labeled as an essential business in New Jersey, so agent and brokers have had to make some adjustments while working with clients. Open houses are prohibited for the time being, but agents can still show houses on a one-on-one basis. The National Association of Realtors also recommends wearing PPE such as disposable masks, gloves, and shoe covers by both parties when conducting a showing. To cut down on the number of in-person showings, many agents have taken it upon themselves to create virtual tours for their clients.
While working agents have put all the proper precautions in place for those who had little choice to move during the pandemic, many others chose to wait it out before making any decisions around buying or selling a home. Expect to see a jump in activity once the stay-at-home orders begin to lift.
An increase in delays
Another thing to think about when deciding to buy or sell a home during the pandemic is the potential delays in just about everything from home inspections to closings. Many municipalities are still closed or just starting to open to the general public, which affects closing dates. Home inspections are happening once homes are vacant, with no one but the inspector being allowed in the home. All of this information must then be relayed virtually, instead of in person, further slowing down the process.
Whether you need to move now or choose to wait until the current state of events slows down, our agents are ready! For more information on how Station Cities can help in Northern New Jersey, click here.