Monica Tumang knew the house she was looking at on Avenue B in Bayonne near Stephen Gregg Park in August 2021 was the one for her and her husband, Alvin Motos, when it started to rain.
They’d been looking for a home on and off since 2017 and repeatedly got their hopes up only to find that a promising home had mold and water damage. Tumang said she’d started trying to schedule home inspections on rainy days to know for sure there were no leaks.
On the day of the inspection of the Avenue B house rain wasn’t in the forecast, but Tumang prayed for a storm anyway. Halfway through the inspection it started to pour, she said, and stopped shortly after the inspection ended.
“I told Alvin I prayed for that rain. I knew that house was going to be ours,” Tumang said.
A good omen like Tumang’s increasingly appears to be what’s needed to buy a home in Hudson County, which is following the national trend of rising home prices and where homebuyers are turning to more and more competitive tactics to compete.
The New Jersey Realtors’ latest report on Hudson County found that the median sale price for a single-family home was $502,000 in March, up from $415,000 in March 2021 and up from $465,000 just two months earlier in January 2022. The median for the state was $440,000 in March 2022.
The inventory of homes for sale was down 29% in March 2022 compared to March 2021, and the average number of days spent on the market was down 12%, from 59 to 52.
And in March 2022, for the first time this year the average percent of the listing price paid topped 100%, coming in at 100.2%, meaning that the average home is sold for more than the asking price.
The statistics for townhomes and condos were similarly dire for March 2022. And in the rental markets, the situation is little better, if at all.
An April report from rent.com found the average rent for a one-bedroom apartment in Jersey City was $3,847 per month — a 46% increase from 2021. Two-bedroom apartments saw a 29% rent increase.
The increasing competition, now reaching a fever pitch, was also evident when Tumang and Motos were searching late last year.
“The bidding war was crazy,” Tumang said. “We were doing a cash offer and we were bidding $10K higher and we were getting beat because there were ones doing a mortgage and they were bidding $50K higher than us.”
Tumang described the house they eventually landed as a “fixer-upper.” She and her husband invested around $30,000 into remodeling the floors, removing carpeting and wallpaper, and installing new appliances, and they weren’t able to move in until October 2021.
But Tumang isn’t worried about the investment: Based on what similar houses were selling for she estimated that her and her husband’s house has already appreciated at least $30,000 in just the time they’ve been living in it.
“The pace of things in the vernacular might be called crazy. But crazy isn’t really the way to describe it, because it’s very calculated,” said Gene Cordano, president of the New Jersey branch of the realty firm Brown Harris Stevens, explaining that buyers are just doing what they have to do to compete.
Cordano said he’s heard previously unheard of steps like buyers offering to waive inspections and appraisals to speed up sales and make their offers more attractive, and it’s common practice now to open with your highest possible offer just to get your foot in the door with a seller.
“At almost whatever price point you put something on for you have multiple bidders, and by multiple I don’t mean three or four, I mean 10 or 15 or 20,” Cordano said.
Cordano said the market is difficult because of low inventory. Sellers may be reluctant to list their house, Cordano said, because they don’t want to have to compete in the market right now to find a new one.
“The dilemma for that seller is, where do I live after I’ve sold it?” Cordano said.
Other realtors say the market is just resetting to where it should be after the pandemic.
Sawyer Smith, founder and president of Sawyer Smith Residential Brokerage in Jersey City, said he knew of a property near Hamilton Park that his firm listed at the start of the pandemic and withdrew after two or three months of no offers. It listed the property again three weeks ago and it sold over the asking price within two or three days. Smith called it an “example of the market becoming healthier.”
Tactics like making cash offers and offering more than the asking price are more common in the suburbs than in Hudson County, Smith said.
The Federal Reserve raised interest rates last week by half a percent, the sharpest rise in over 20 years, to cut inflation. That move could raise mortgage rates, which already topped 5% nationally, even further and tamp down the housing market in Hudson County by putting the monthly payments needed to afford a home out of reach for more people.
But for those who can get into the market, the rewards are still sweet. Tumang said everyone in her new house has a spot just for them: She has the sunroom, her husband has the family room, their four-year old son has his “toy room,” and even their two dogs and cat have their spots.
Motos works closer now to the computer shop in Bayonne he owns than when he and Tumang lived with his parents in Jersey City. He passes by on the way to meet with clients outside the shop sometimes, Tumang said, and she and their son wave to him from the sunroom.
“I just know in my heart, (this is) the house that we’ve been praying for,” Tumang said.