With two children and a third on the way, Heather and Patrick Healy decided their 1,900-square-foot home in New Providence was just too small. Knowing the real estate market was hot early this year, the couple figured looking in the million-dollar range would give them a cushion. But the market was just too tough.
They lost out in bidding wars for homes in Chatham and Basking Ridge before snaring a Basking Ridge 4,300-square-foot colonial revival built in the 1980s. The purchase price: $1,082,000.
“There’s no room for negotiations,” said Heather Healy, 34. “You have to be willing to pull the trigger right away.”
Welcome to the COVID pandemic real estate market in New Jersey, where homes are selling as soon as they are listed, often with multiple offers. Low inventory — coupled with the increased appeal of suburban living — has created a fiercely competitive market for buyers. Even as COVID restrictions about showing homes lifted, properties are still not coming on the market.
“It’s crazy. It’s really crazy,” said Ann Marie Battaglia, a real estate agent at KL Sotheby’s International Realty in Madison.
Updated Vaccination by Age Range for NJ: Morning of 4/9 vs Morning of 4/12
At Least 1 Dose Total Pop: 8.9m Total 1st Doses: 3.4m – 38% of total pop (Up from 32%) 18-29 – 1.4m population – 306k dosed – 22% 1 Dose (Up from 21%) 30-49 – 2.3m population – 850k dosed – 37% 1 Dose (Up from 35%) 50-64 – 1.9m population – 986k dosed – 52% 1 Dose (Up from 49%) 65-79 – 1.1m population – 952k dosed – 87% 1 Dose (Up from 81%) 80+ – 400k population – 340k dosed – 85% 1 Dose (Up from 80%)
Updated Vaccination by Age Range for NJ: Afternoon of 4/5 vs Morning of 4/9
At Least 1 Dose Total Pop: 8.9m Total 1st Doses: 3.2m – 36% of total pop (Up from 34%) 18-29 – 1.4m population – 288k dosed – 21% 1 Dose (Up from 19%) 30-49 – 2.3m population – 800k dosed – 35% 1 Dose (Up from 33%) 50-64 – 1.9m population – 928k dosed – 49% 1 Dose (Up from 46%) 65-79 – 1.1m population – 896k dosed – 81% 1 Dose (Up from 77%) 80+ – 400k population – 320k dosed – 80% 1 Dose (Up from 75%)
New Jersey employment grew slightly in February, but it was enough for the state to now have recovered more than half of the jobs that were lost by the pandemic.
Preliminary estimates released by the U.S. Bureau of Labor Statistics on Thursday indicate that total nonfarm wage and salary employment in New Jersey increased in February by 10,700, to reach a seasonally adjusted level of nearly 3.88 million. The gains were concentrated in the private sector (12,100) of the state’s economy.
With the totals, New Jersey has now recovered 364,000 jobs, or about 51% of the number lost in March and April 2020 due to the coronavirus pandemic and measures taken in response to it.
Lenders behind the American Dream mega mall project are in the final stages of taking a 49% stake in two other malls owned by developer Triple Five that were used as collateral for a $1.2 billion construction loan in New Jersey, the Financial Times reported, citing people involved in the deal.
The loan that was defaulted on is held largely by JP Morgan, along with Goldman, Starwood Capital, CIM Group, Soros Fund Management, Wafra and iStar. The restructuring, the Financial Times reported Friday, was expected to close as early as “this week,” although the process has been complicated by the number of lenders and could be delayed.
A spokesperson for American Dream declined to comment.
The cash crisis at American Dream came to light earlier this month when Kurt Hagen, senior vice president of development for Triple Five, told a joint meeting of the Bloomington, Minn. city council and its port authority that the pandemic created a “very significant cash flow crisis” for American Dream and that collecting on the collateral was “likely to happen.”
Hagen described the collateral pledge as an indirect ownership interest that does not include any assets or Mall of America property. “It simply means that once we return to profitability, 49% of those profits would go to the American Dream lenders until such time as that collateral is released,” Hagen said.
The developer has also filed a lawsuit against a prospective tenant for breach of contract because it failed to open two eateries. And construction companies have filed nearly $41 million in liens against Triple Five, saying they are owed for work performed at the site.
Low supply and high demand have pushed U.S. home prices to record levels during the Covid-19 pandemic.
The median sale price for a home in the U.S. hit an all-time high of $331,590 during the four-week period ending March 21, a 16% jump compared to the same time in 2020, according to a report Friday from Redfin.
At the same time, active listings plummeted 42% year over year for the month ending March 21, marking the biggest decline since at least 2016, when Redfin began tracking the data.The number of new listings was down 12% in the same time period, while the asking price rose to $349,973, an 11% increase.
“It’s concerning how much home prices have risen during the pandemic,” the chief economist of Redfin, Daryl Fairweather, said in the report. “When the pandemic is over, purchasing a home is going to cost much more than ever before, putting homeownership much further out of reach for many Americans. That means a future in which most Americans will not have the opportunity to build wealth through home equity, which will worsen inequality in our society.”
Homes are also selling faster than ever, according to the report.
“Now is the time for all of our schools to meaningfully move forward with a return to in-person instruction, whether it be full-time or with a hybrid schedule,” Murphy said during his regular coronavirus briefing in Trenton.
The governor pointed to billions in federal funding headed to schools from the American Rescue Plan and said his administration is doing everything in its power “to get as many kids back safely and responsibly into a classroom.”
Murphy’s comments come as the number of students with the opportunity to attend classes in person continues to grow. The governor reported 142 school districts, serving 107,498 kids, are now providing full in-person instruction. Another 534 districts, representing 843,394 students, are operating under hybrid schedules.
However, 317,044 students across 98 districts remain in all-remote instruction a full year after most schools initially closed due to the coronavirus pandemic. Parent frustration in many of those communities has long since boiled over, leading to parent rallies, legal battles and even a police investigation into the suggestion of “physical violence” against those keeping schools closed.
Thousands of families forced from their homes. Homelessness at historic levels. A city already devastated by COVID-19 facing yet another crisis.
Newark is on the brink of a housing emergency — hastened by the coronavirus — that could have cascading effects across New Jersey.
More than 14,000 eviction cases are pending in Essex County court — most of them thought to involve Newark tenants — delayed because evictions have been suspended during the pandemic under Gov. Phil Murphy’s emergency order.
But as more people get vaccinated and the state climbs out of the devastation wrought by the pandemic, Newark and other cities could be plunged into an eviction crisis they’re not prepared to face.
“Unless there is something systemically done to address this overwhelming backlog and imminent avalanche (of evictions), I do not think things are going to be back to normal,” said Khabirah Myers, a lawyer in Newark’s Office of Tenant Legal Services. “We’re going to see potential homelessness at historic levels.”
The problem is not confined to Newark. A staggering number of New Jersey residents could be thrown out of their housing unless substantial funding is earmarked for rental assistance for tenants who have fallen behind on rent and evictions are further delayed, experts say.
Around 60,000 evictions are pending across the state, data from the state judiciary shows. Matt Shapiro, president of the New Jersey Tenants Association, said those likely represent only a fraction of evictions that will be filed once the moratorium ends.
“Most landlords haven’t filed evictions because of the lockout moratorium,” Shapiro said. “If we don’t do something, you’re going to see 200,000, 300,000 pending evictions.”
The booming housing market helped stave off economic collapse in 2020. But soaring prices are starting to worry policymakers, who fear the market could lock a generation of would-be buyers out of homeownership.
Home prices in January — typically a slow month for the market — were up 14 percent over the same month the previous year, while sales jumped 24 percent, despite an unemployment rate that was almost twice as high. Demand for existing homes is so strong that the average residence is on the market for just three weeks, and inventory is at a record low after seeing its steepest drop last year since the data was first tracked in 1999.
It all threatens to freeze broad swaths of the population out of the market, leaving millions of Americans in a less secure financial position, widening the racial wealth gap and forcing millennials, already lagging previous generations in building wealth and forming families, to fall even further behind.
“The dream of homeownership is out of reach for so many working people,” said Senate Banking Chair Sherrod Brown (D-Ohio). “Rising home prices and flat wages means that many families, especially families of color, may never be able to afford their first home.”
Brown, who insists on calling his panel the “Senate Banking and Housing Committee,” vowed that these issues will be a top priority in the months ahead as the country struggles to recover from the pandemic-induced recession. Among other things, he said he plans to work with the Biden administration to address the rising cost of housing and expand access to homeownership “so that more families can rent and own homes in inclusive communities.”
The last time the U.S. saw such skyrocketing home prices, the ensuing crash brought down the global economy. Most industry analysts say the current boom is not a “bubble” akin to that frenzy of more than a decade ago, which led to the financial crisis.
In the Philadelphia suburbs, Cherry Hill — with a sale price up over 14% — and Willingboro — up 10.5% — are exceptional.
“In Montclair and Glen Ridge, homes are selling for $100,000 to $200,000 above the asking price — big, older houses,” said Angela Sicoli, a Century 21 broker-owner and president of the New Jersey Association of Realtors.
Recent sales statistics for Montclair show the median home price at $975,000, up almost 30% year over year, and buyers were paying 116% of the asking price. Montclair had 57 new home listings last August, considered an 18-month supply of inventory in normal times.
The pandemic brought with it a number of unexpected economic surprises, among them a booming housing market in much of New Jersey, with low inventory and intense competition among buyers often leading to bidding wars; average home prices are at the highest level in state history.
Contributing to the competitive real estate market, says Morris Davis, the Paul V. Profeta Chair at the Rutgers Business School, is that millennials are reaching the age when they’re starting families and looking for homes. Correspondent Joanna Gagis reports.
The Food and Drug Administration on Saturday authorized Johnson & Johnson’s single-shot Covid-19 vaccine for emergency use, beginning the rollout of millions of doses of a third effective vaccine that could reach Americans by early next week.
The announcement arrived at a critical moment, as the steep decline in coronavirus cases seems to have plateaued and millions of Americans are on waiting lists for shots.
Johnson & Johnson has pledged to provide the United States with 100 million doses by the end of June. When combined with the 600 million doses from the two-shot vaccines made by Pfizer-BioNTech and Moderna slated to arrive by the end of July, there will be more than enough shots to cover any American adult who wants one.
But federal and state health officials are concerned that even with strong data to support it, some people may perceive Johnson & Johnson’s shot as an inferior option.
The new vaccine’s 72 percent efficacy rate in the U.S. clinical trial site — a number scientists have celebrated — falls short of the roughly 95 percent rate found in studies testing the Moderna and Pfizer-BioNTech vaccines. Across all trial sites, the Johnson & Johnson vaccine also showed 85 percent efficacy against severe forms of Covid-19 and 100 percent efficacy against hospitalization and death.