Will pandemic increase interest in moving to NJ’s suburbs?
Between health fears and job losses and stricter loan policies, it’s a tough time for home sales. Realtors wonder when things will return to something resembling normalcy – and whether the pandemic might create new customers.
Looking ahead to the post-pandemic real estate market, whenever that may come, Jarod Grasso, chief executive officer of New Jersey Realtors, thinks New Jersey could benefit if there is a trend out of places like New York City, where coronavirus hit the hardest.
“I think that those people are going to re-evaluate their circumstances and see if it’s better for them to live in the suburbs. And the more affordable option is to live in New Jersey’s suburbs compared to New York City,” Grasso said.
“I’m hopeful that we’re going to see an influx of people who want to have a change of life and come out to the suburbs will start looking at New Jersey’s real estate market as a viable option,” he said.
The question then becomes: Could that affect parts of New Jersey, too? The concentrations of known positive cases are even higher in Passaic, Union and Hudson counties than they are in New York City.
Data from March shows how the real estate is being slowed by the coronavirus – sales down 5% compared to the previous March, or about 427 transactions, with pending sales down 11% and new listings down 28%. The median sales price was actually up nearly 12%, to $312,500.
April was surely worse, though those numbers won’t be assembled until mid-May.
Grasso said the spring is normally the truest indictor of the strength of the real estate market, as people try to buy, sell and resettle before the next school year.
“We’ve pretty much lost the spring market. It’s going to see how quickly we come out of the pandemic and if we come out of the pandemic quickly and how the summer market carries us into the fall,” Grasso said.
In addition to health-related changes like a suspension of open houses, the estimated 20% unemployment rate of course means there are fewer buyers. Grasso says some bigger banks are also requiring higher credit scores from potential borrowers.
“All this is going to come into play on how quickly our economy gets back,” he said.
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Michael Symons is State House bureau chief for New Jersey 101.5. Contact him at firstname.lastname@example.org.