New Jersey has long been the beneficiary of people looking for housing near New York City but not in the City.
Jersey City and Hoboken — the so-called Gold Coast — have been desirable addresses for decades.
But now — after the COVID-19 lockdown allowed professionals to work from home — the trend is to move away from urban living and seek refuge in the suburbs.
After the COVID-19 lockdown allowed professionals to work from home, the trend is now to move away from urban areas and seek refuge in the suburbs. Photo courtesy of Coldwell Banker Realty/Lori Intocchi
While the real estate market in Jersey City and Hoboken remained strong, the boom in housing sales spread across the Garden State.
“I’ve been in this business 33 years, and I’ve certainly seen a big change,” said Angela Sicoli, a Century 21 broker-owner in Nutley and president of the New Jersey Association of Realtors.
“The demand for homes is so high throughout the state,” she said. “Our figures are showing the market is competitive throughout the state.”
How competitive?
“Essex County as a whole is up tremendously,” she said. “The median price is up over 21%.”
In Montclair and Glen Ridge, big, older houses are selling for $100,000 to $200,000 above the asking price, Sicoli said.
In Nutley, she had a listing with an asking price of $525,000 that sold for $75,000 more.
“These are normal, medium-sized homes that the typical buyer would want,” she said. “The properties are going on the market and selling overnight. It’s a win-win situation for everybody.”
In towns such as Montclair, big, older houses are selling for $100,000 to $200,000 above the asking price. Photo courtesy of Coldwell Banker Realty/Janet Sklar
While the initial frenzy to get away from the city has subsided, Sicoli said, the Jersey real estate market remains strong.
For the entire state, the average sale price for single-family houses was up almost 25%, for condos and townhouses it was up almost 10%, for adult community homes, up 18%.
“The prices continue to go up because there are so many buyers for one property,” she said. “They are still coming in from the City. This isn’t going to go away anytime soon. They want to escape — they want the backyards.
“We see it continuing through the spring and into the summer.”
And what’s driving the market is not just the pandemic: Mortgage rates have dropped significantly as the Federal Reserve attempts to stimulate the stagnant economy. The rate for a 30-year mortgage has been as low as 2.75%. Fifteen-year mortgages hover just above 2%.
“People are looking to open their borders a little because they’re not going to the office as much,” said Rob Norman, president of Coldwell Banker Realty, headquartered in Madison, which covers the entire state, with 50 offices and 4,000 agents.
Since vacation travel is out, buyers are looking for park-like yards and walkable neighborhoods, among other features. Photo courtesy of Coldwell Banker Realty/Lori Intocchi
Since vacation travel is out, buyers are looking for amenities — park-like yards, walkable neighborhoods. Lake communities are very desirable, he said.
“We have seen inventory increase, but it’s not the same as last year,” Norman said. “Inventory didn’t come off the market over the holidays like it did last year.” (Editor’s note: Norman noted that in the early months of 2021, buyer demand intensified and inventory significantly decreased. The January market report from New Jersey Realtors showed less than a two-month supply of homes statewide, with six months of inventory considered normal in a balanced market.)
“Pools used to be undesirable for many or a wash at best, but now they’re in demand,” said John Turpin, a broker in Somerset County.
“I think you’re seeing people recognize they need more space, and they need dedicated space,” Norman said. Home offices and space for the children to home-school are being sought.
With the children at home, more space might be needed for a grandparent to move in — or for a nanny.
“I’m working from home, I have a 9-month-old baby, we needed more space,” said Stephanie Shabat, who works in the health insurance industry and lived in Hoboken for 10 years while working in Manhattan.
She, her husband and baby moved to Westfield, which is on the Raritan Valley Line, for the commute to Manhattan.
“It was always our intention to move to the suburbs,” she said. “The pandemic sped things up. It was an opportunity to have more space, space for me to work, a yard.”
In Hoboken, she said, the dense population meant taking precautions such as wearing a mask “to go across the street.”
Properties along the coast, like The Lofts Pier Village in Long Branch, are in high demand. Photo courtesy of Extell Development Co./The Lofts Pier Village
“In Ocean and Monmouth counties, what used to be a secondary market is now a primary market,” said Perry Beneduce, marketing director for Diane Turton Realty, which covers 80 miles of the Jersey Shore. “The whole situation has really flipped. It’s a complete flip on what the consumers are looking for.”
He said he has been getting inquiries from as far away as the Hamptons and Connecticut.
Long Branch has been especially hot, with the median sale price up 26%.
“The sales market is very strong. There’s a lot of interest, a lot of activity,” said Moshe Botnick, vice president of Extell Development Co., which is building The Lofts Pier Village in Long Branch.
“A lot of people are pushing to get in, he said. “People are interested in having another place to go.”
Botnick said older owners looking to downsize also are snatching up rentals at Barnegat 67, another Extell property just inland from Long Beach Island.
“A lot of those people are looking to rent,” he said. “There’s a lot of development going on in Barnegat. It’s a popular place to be; people are moving down.”
The trend toward the suburbs has resulted in bidding wars for available properties. Buyers want turnkey properties — they want to move quickly.
“The biggest problem we have is low inventory,” Beneduce said. “The bidding war seems to be the standard. People are willing to spend huge amounts of money to get out of the city. They want land, they want larger homes, they want space on the coast.”
Pools have become an in-demand amenity now that people are looking to plant roots in the suburbs. Photo courtesy of Coldwell Banker Realty/Ellen Monarque
Turpin, broker-owner of Turpin Realtors, which serves Somerset, Morris and Hunterdon counties, said he believes the trend toward the suburbs already was under way when the pandemic hit.
“We were at the very beginning of the trend, and COVID just ignited it,” he said. After a decade or so of a “conveyor belt” of people moving to urban areas, “we’re seeing people from the suburbs moving farther west. It’s amazing, the reversal.”
He said even very high-end properties — $2 million and up — are “ticking up” in value.
Lisa Candella-Hulbert, president-elect of the Women’s Council of Realtors in Mercer County and a broker for Berkshire Hathaway HomeServices Fox & Roach in Princeton, said 2019 saw a consistent, solid market. “It was steady, and then COVID happened.”
“It’s been an interesting journey,” she said. “Your three- to five-year plan has become a three- to five-month plan. People are not wasting time.”
She said she had clients who told her they wanted to sell their New Jersey house and move to North Carolina. In six weeks, they had done it.
“If you put your house on the market at an entry-level price — $375,000 — you’re going to get multiple offers, and it’s probably going to go in no time,” Candella-Hulbert said.
She said a house that went on the market for $500,000 received 15 offers in a weekend.
“I have clients looking for homes, and they just can’t win,” she said.
“It can be frustrating,” Sicoli said.
Purchase contracts have become creative, adding escalation clauses: Buyers put in writing that they’re willing to pay $5,000 more than the highest offer, for example.
Real estate experts have noticed that buyers want turnkey properties, and they want to move quickly. Photo courtesy of Coldwell Banker Realty/Michele Wingle
The spark that lit the market didn’t happen overnight. When the lockdown struck, people at first were reluctant to have potential buyers in their homes. Real estate agents had to become creative.
“It was interesting because it took a little time to evolve as an industry, and we evolved successfully,” Norman said. He thinks the usually hot spring market was delayed about three months into early summer in 2020.
“We have to deal with a number of new challenges we haven’t had to deal with before,” he said.
Even during the early spring lockdown, life events — marriage, birth, retirement — led people to seek new housing.
Meanwhile, technology became a principal selling tool. Virtual, even 3D, house tours became standard. Buyers could do a drive-by and get a link from the “for sale” sign.
“The technology is helping people,” Norman said. “It has been a great benefit to the homeowner.”
3D house tours are now an option for some potential homebuyers because of COVID-19. Photo courtesy of Getty Images
Potential buyers could look at dozens of homes without going inside any, narrowing down their choices. Old listings often had only a picture of the outside of the house.
Candella-Hulbert said she knew of a buyer who made an offer on a house without ever going inside.
“Now is the time to make a move,” she said. “The quarantine changed the urban living mindset.”
When home tours restarted, agents wore masks and booties when entering a house.
Many of these innovations are expected to continue beyond the pandemic, but in the short term, there is no end in sight to the stampede to the suburbs.
“Right now, buyer demand has outpaced listings,” Norman said. “Money is cheap, you’re working from home — why stay?
“You’re kind of seeing a perfect storm with what’s going on in these markets. This market is good — it’s a great time to sell, and it’s a great time to buy because interest rates are low.”
Sicoli advises buyers to take their time.
“Look at comparable prices for the last month,” she said. “They have to be prepared to know they are not going to get that home at that asking price.”
Joe Bakes is a veteran of more than 40 years as a reporter and editor for New Jersey newspapers, including 24 years for The Star-Ledger. He has taught journalism at Seton Hall and Montclair State and Kean universities.
This article originally appeared in the Spring 2021 issue of Jersey’s Best. Subscribe here for in-depth access to everything that makes the Garden State great.
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