A major shift in housing demand has been one of the lead stories of 2020. Spurred by the pandemic, renters and homebuyers alike appear to be fleeing major urban centers for suburbs, ex-urbs, and smaller cities where they can get more for their money and work from home infrastructure means they may never have to commute again. Flawed as this narrative may be, we have seen huge demand in smaller markets through 2020.
New Jersey is full of those smaller markets. The single-family market is booming there and home sales are getting more and more competitive. In New Jersey today it takes a truly standout offer, or a lot of luck, for a homebuyer to secure a single-family property. Two New Jersey mortgage professionals spoke to MPA about how they’ve stayed successful in this market and how they manage client relationships.
“On the purchase side, the issue people are having is not around qualifying,” said Dennis Viera (pictured), loan officer for New Jersey with Philadelphia Mortgage Brokers. “The issue is that when they make an offer, they’re going up against sometimes 20 others. If they’re not putting in ridiculous standout offers, they don’t stand a chance. Sales are coming in at values beyond what the house is worth now because everything is selling higher.”
Viera says Sussex county, the rural northern New Jersey county where he was born, is now seeing rapid increases in home prices as commute times to major urban centers become less of a priority for buyers who can get more for their money in rural areas.
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Bishoi Nageh added that New Jersey is seeing growth across the state. The president and CEO of Petra Cephas: Residential Mortgage Brokers specializes in Northern and Central New Jersey and says that on top of the suburban and ex-urban markets, small cities like Hoboken and Bayonne are getting flooded with offers.
“There’s three drivers behind this market,” Nageh said. “[Buyers leaving] New York is one of them, low rates in general is another…and the bottleneck that COVID created, building this balloon of demand from the people who were trying to buy in February, March, April, and May. You have an almost perfect storm because of those buyers just waiting, and even lower rates.”
Nageh expects rising demand to continue in the New Jersey housing market. He can’t predict the continued pace of growth, but expects we’re unlikely to see a price correction any time soon.
While mortgage professionals like Nageh and Viera are enjoying this boom market in single family housing, partnering with specialist realtors, Nageh believes the industry shouldn’t neglect those multifamily specialist realtors who are struggling a bit more right now. He expects the condo market to turn around as prices drop, which should see demand shoot back up again. He says that market will come back with force and a savvy mortgage pro should be ready for it.
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In the current market’s focus on single-family, Viera is approaching client conversations differently, managing expectations and making the right moves to better help them stand out in this highly competitive environment.
“I try to make sure clients understand the state of the market and the reality of the competition that is there. I make sure they know I’m focused on doing what’s right for them and not trying to fit a square peg in a round hole,” Viera said. “I make sure the deal is something they’re going to be comfortable with over that 30-year commitment, not just forcing them into a house using every dollar they have. When I pre-approve my clients, I take some time and really review their financial profile to make sure they can deliver on what I’m offering them. When we make the right deal, I can make sure they don’t need to worry about their financing and can make an offer that will be accepted. A lot of that detail goes into the offer, too, showing my client as someone who can afford to carry the house. It’s a better system than just throwing offers at the wall and seeing what sticks.”