The Booming Real Estate Market in New Jersey? Entrepreneur Isadore H. May Weighs In
Lower mortgage rates in the first half of 2019 kicked off a home buying frenzy in New Jersey as low-end buyers sought refuge from the high prices and low inventory of nearby New York City. However, as with NYC, a lull persists in the upper end of the New Jersey market, with million-dollar homes likely to take a year or more to be moved.
New Jersey-based lawyer and entrepreneur Isadore H. May, who founded the local real estate business Garden State Land Company, says the SALT deduction cap of $10,000 that came into effect towards the end of 2017 has suppressed buying on the upper end of the market, though not as much as some had feared.
Nonetheless, sales of million-dollar homes slowed in Queens and Brooklyn in 2018, while sales in Suffolk County, home of the famous luxury vacation spot the Hamptons, fell by over 16%. The number of single-family homes on the market also rose year-over-year in nearby Westchester, Rockland, and Putnam counties as of the end of Q1 2019.
Historically Low Inventory Falling Even Further in New Jersey
While New York home sellers are having difficulty closing deals, their New Jersey counterparts have had no such trouble. Single-family home inventory dropped by 10% year-over-year in the New Jersey counties of Bergen, Essex and Passaic, with a net total of more than 800 homes coming off the market.
With inventory at its lowest point this decade, New Jersey sellers are getting multiple offers on their homes and moving them far quicker than just a couple years ago. Isadore H. May says that days on market in the first half of 2019 for single-family homes was 69, down from 76 two years ago, while condos/town homes fell to 65 from 74.
Median sales prices of single-family homes did decline by 1% year-over-year in Bergen but rose by 1.5% to 3% in the nearby counties of Essex, Passaic, Morris, and Hudson, where bidding wars on the limited available inventory are pricing many first-time buyers out of the market according to Isadore H. May.
The falling prices in Bergen could be explained by the additional seat change needed to get into New York City from Bergen via Metro rail access, which is a growing priority among the region’s home buyers. Two seat changes are needed from the Bergen rail stations, one more than the stations in those other New Jersey counties.
New Jersey Condos Hot, Adult Communities Not
Rising sales prices have been evident across New Jersey as a whole when comparing the first half of 2018 to the same period in 2019, as median sales prices of single-family homes across the state have risen by 4.9% during that time, while average sales prices have climbed by 2.5%.
The New Jersey townhouse/condo market has been even hotter, with sales prices rising by 5.1% and 4.8% respectively despite the number of new listings rising by over 1% during each of the past two years compared to new listings of single-family homes having declined slightly. On the other hand, a 14% surge in new listings of adult community properties in 2019 has pushed the average sales price of those homes down by 2.4%, though median prices ticked up by 0.8%.
Another trend that appears to be picking up steam in the New Jersey market according to Isadore H. May is that move-in ready homes are far more desirable than fixer-uppers, with their prices skyrocketing accordingly. He speculates that it could be due to first-time millennial home buyers not being particularly adept when it comes to making repairs or upgrades to homes. Alternatively, he suggests that they may simply prefer not having to invest their own free time in getting their living quarters up to snuff.