So Long 2020 - It Wasn't What We Expected

 

It certainly was not what anyone expected. We all made the best of a bad situation and hopefully by the end of 2021 we will be celebrating again with our friends indoors and seeing full smiling faces.

 

I don’t think I need to tell you how the market is going. There were enough articles written this year that better described the exodus from apartment living to single-family homes than I ever could. But I can assure you that in Essex, Bergen, and Passaic Counties, the market is booming and very competitive.

 

Covid has very much changed the way we live, and in some cases allowed many people (and companies) to reconsider how they work and where they work from. Businesses may no longer require the full-time presence of their workers (especially if it means reducing overhead), and workers realize they can save two hours a day of their lives otherwise spent commuting.

 

In essence, what we are looking at is not a "City vs Suburb" issue as much as a “space” issue. For NYC residents, who can afford to have enough space for a family, a home office (or two), and a second home with outdoor space, they will largely remain unaffected by Covid’s quarantine requirements. But for most people to experience similar amenities, this means a move to the suburbs (or smaller cities, in fact, smaller cities are seeing a rebirth as their cost of living is more tenable).

 

This sudden demand, combined with a market in which inventory was already tight, helped create this hyper-competitive market. In the 3rd quarter, median closing prices were up in Montclair compared to last year by 34%, 17% in Bloomfield, 35% in Glen Ridge, and 42% in Verona. And in terms of sales price versus list price, every town mentioned is over 100% (Verona with 105%, Montclair leads the pack with 119% of sales price). We are also seeing much more activity in the typically slower high-end market (1.7M +).

Ideally, with the implementation of the vaccine, there will be less pressure on the market. Sellers should not be worried about the market crashing and buyers should not expect a bargain as inventory was already low. But what we, as Realtors®, hope to see is a less frantic market. We also hope to experience a rise in inventory (as older homeowners feel comfortable enough to put their homes on the market) and for demand to return to pre-Covid conditions. For those who bought a home during this time and worried about their investment, unless you are moving in the next 5 years, put your worries to rest. Space is perennially tight in Essex County (new construction of single-family homes is difficult at best) and demand is constant due to the close proximity of NYC.

And for those of you worried about NYC—don’t be. It will be reborn (remember “Ford to NYC: Drop Dead” and how after 9/11 did everyone “flees to the suburbs”? The city will rise again and if you need hope you can read Richard Florida’s article in the WSJ, he is one of the leading voices of urban planning and author of The Rise of the Creative Class (a great read if you have time).