Category: Buying Home

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“Our market truly has been one of the very few bright spots of the economic recovery,” said Mike Fratantoni, MBA chief economist. “Millions of homeowners have saved money through refinancing, mortgage servicers have helped over 5 million homeowners stay in their home by offering forbearance, and following a sudden halt in the spring, home sales are booming.”

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Typically this time of year in Randolph, there are 120 to 140 homes listed for sale. Right now there are just 23.

It’s a trend agents and buyers are seeing throughout the state brought on in part by COVID-19 concerns — and the intense competition for the few houses that are on the market.

“The inventory is ridiculously low. Unprecedented,” said Missy Iemmello, office manager for Weichert Realtors corporate sales office in Morris Plains, which has 120 real estate agents doing business in Morris, Sussex, Warren, Bergen and Essex counties.

Throughout the state, there were only 23,011 single-family homes, townhomes and condominiums, and adult community properties available for sale in the month of January. Last January, there were nearly double that amount, 41,005 listed for sale, according to a report from New Jersey Realtors.

The low inventory and high demand are pushing sale prices higher, causing houses to sell for tens of thousands of dollars over the asking price and generating bidding wars.

The median sales price for a single-family home in New Jersey in January was $504,585, a 22% increase over the median price in January 2020.

A lot more buyers have equity in their homes during this surge in the market, unlike back in 2006, said Iemmello. “They’re financially comfortable where they are. Because of the activity and the rising prices, it’s a great time to sell, but where would they go,” she said.

Those who are selling are likely retirees who are moving out of state or people who have a second home, for example at the shore, that they can go stay in and work virtually from. “That’s where we’re seeing people take advantage of this market,” she said.

Another reason for the low inventory is a moratorium on foreclosures and evictions, signed by Gov. Phil Murphy last March.

But Beth Kimmick, Broker manager for ERA Central Realty in Robbinsville, doesn’t think there will be a flood of foreclosure listings hitting the market when the moratorium is lifted.

“Everything I read and hear shows there’s going to be a small percentage of properties that actually get foreclosed on,” she said. “A majority of people will be able to make that up or sell their house and not go into foreclosure.”

So, is this a good time to buy, if you can find a property?

Eric Anderson of Alexander Anderson Real Estate Group in Hackensack says yes — if you’re buying for the long term.

“What goes up, must come down,” he said. “If you’re looking for the short term, you would be better off renting.”

Some other key findings from the latest trends, according to a report from New Jersey Realtors:

• Single-family homes are selling for 100.2% of the listing price, up from 97.3% in January 2020
• Single-family homes are on the market for just 44 days on average, down from 72 last year
• Pending and closed sales on single family homes in January are both up by 14% and 17%, compared to the same time last year

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Are you buying or selling a home in New Jersey? Tell us about your experiences. Allison Pries may be reached at apries@njadvancemedia.com.

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The coronavirus pandemic hit real estate hard in 2020. Initially, existing and new home sales nosedived. And then they rebounded to new heights as the industry learned to deal with the virus and COVID-weary buyers avidly sought larger houses with dedicated working and schooling areas. In the ashes of the pandemic, a booming seller’s market emerged.

But what’s in store for real estate investors in 2021 as the vaccine rollout continues and the economy recovers? New research from Clever Real Estate may help us draw conclusions about the near-term future of real estate in the US.

Good News for Sellers

One of the main issues driving prices higher is the lack of inventory. According to Clever Real Estate’s data, 90% of those who planned to sell in 2020 did not end up selling as planned. However, 77% of homeowners who still plan to sell expect to list their property in 2021.

Clever found that nearly 70% of survey respondents believe it’s currently a good time to buy a home. Mortgage rates today are about 1% lower than they were a year ago, driving many to fast-track their buying plans. And a recent Gallup poll found that 35% of Americans are financially better off a year into the pandemic. Not only did they retain their jobs, their expenses fell and their investments took off. This has created a lot of pent-up demand for one-third of the country — people wanting to travel and make big-ticket purchases such as homes.

On the flip side, existing home inventory is about half of what it was a year ago. This means that there is a lot of competition this year from homebuyers and real estate investors for half as many homes as there were last year.

Good News for Real Estate Investors?

Fortunately, for some homebuyers, markets adapt to conditions all the time. Rising home prices may entice homeowners off the fence and into the market. If the homeowners who wanted to sell and then put it off decide to list their homes, additional inventory may take some pressure off home prices.

In addition, more than half of those surveyed experienced economic pain that will likely keep them from buying homes no matter how badly they’d like to. Clever found that 61% of renters had planned to buy a home in 2021. But now:

• 62% are holding off
• 22% will continue as planned
• 17% moved up their planned purchase

As long as most would-be buyers hold back, homebuyers and property investors — whether those buying rental properties or fixing and flipping properties with 1031 exchanges — choosing to go forward will have less competition when buying than they otherwise would. And many of those holding back right now will not be able to buy for some time, perhaps allowing the supply to come into balance with demand.

Harsh Reality

The effects of the pandemic will likely continue for months, perhaps years after the economy recovers. Many Americans are not in position to buy a home and won’t be for some time, no matter how badly they’d like to:

• 1 in 4 missed at least one mortgage or rent payment in the last year. That would make them ineligible for mortgage approval under most mainstream home loan programs.
• In addition, 62% currently report living paycheck to paycheck. The implication is that there are no investments to tap and no room for an increase in housing expenses, which also makes mortgage approval unlikely.
• Finally, 43% report having no emergency savings. It is very difficult to get a mortgage with no down payment or reserves.

This is bad news for would-be buyers, especially first-timers — according to Clever’s research, renters bore the brunt of pandemic-related economic problems.

Recovery

The majority of those who plan to list their homes expect to do so in May, June and September of 2021. So while supply and demand won’t completely balance in the near future, prices will probably stop rising as quickly.

In addition, buying power should rise as people get back to work and businesses return to making money. Optimism is not universal, however, and most believe that life won’t return to normal for at least another year. In fact, 59% of those surveyed said that the U.S. economy or their own finances would not get back to pre-COVID levels until 2022 or later.

There is light at the end of the tunnel, however. According to Clever’s research, compared to September 2020:

• 42% fewer people reported being worried about paying everyday bills
• 44% less worried about being able to feed themselves and their family
• 34% less concerned about bankruptcy
• 20% less concerned about investment values
• 18% less concerned about their home value
• 18% less concerned about income/job stability

Interestingly, in much of the country, home prices are skyrocketing at the same time rents have plummeted, according to The Atlantic. The silver lining is that those who are currently shut out of the residential housing market may be able to find cheaper rentals and eventually rebuild their savings with the money they save in rent.

When Will There Be a Buyer’s Market in 2021? Probably Not

There is some good news. The economy is rebounding as we defeat COVID with vaccines and healthier habits. Optimism is rising. But even if everyone who initially planned to sell in 2020 or 2021 listed right now, supply and demand would still not favor buyers — 22% of sellers decided to keep their houses off the market for the foreseeable future.

It’s probably unrealistic to expect home-buying to get cheaper in the near future. But prices should increase at a slower rate. And as incomes rise and we get fully back to work, homes could become more affordable because affordability is not just a function of price — it’s also related to income.

The March Employment Situation Report from the U.S. Department of Labor was encouraging — 913,000 jobs were added back to the US economy, and the unemployment rate fell from 6.2% to 6.0%. However, we must add another 8.4 million jobs before reaching pre-COVID employment. If the recovery proceeds at its current pace, it will be January 2022 before we get there. Something to look forward to, whether we’re buying, selling or staying put.

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Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions, feel free to contact me at 609-915-9665.

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Original Article Appeared at : Source

Are you interested to learn more about the Greater Princeton, New Jersey Market Conditions, feel free to contact me at 609-915-9665.

People also looked for:

• listing agent and selling agent
• buyers agent
• listing agent
• princeton nj real estate agent