Cash transactions, bids above demand, canceled inspections: Homebuyers compete in a fierce market in Hudson County
Monica Tumang knew the house she was looking at on Avenue B in Bayonne near Stephen Gregg Park in August 2021 was the one for her and her husband, Alvin Motos, when it started raining.
They had been looking for a home on and off since 2017 and repeatedly held out hope only to find a promising home had mold and water damage. Tumang said she started trying to schedule home inspections on rainy days to make sure there were no leaks.
On the day of the Avenue B home inspection, rain was not expected, but Tumang still prayed for a storm. Halfway through the inspection, it started raining, she said, and stopped shortly after the inspection was over.
“I told Alvin I was praying for this rain. I knew this house was going to be ours,” Tumang said.
A good omen like Tumang’s is increasingly looking like what it takes to buy a home in Hudson County, which is following the national trend of rising home prices and where buyers are turning to tactics more and more competitive to compete.
New Jersey Realtors’ latest Hudson County report found the median sale price for a single-family home was $502,000 in March, up from $415,000 in March 2021 and up from $465,000 just two months earlier in January 2022. The median for the state was $440,000 in March 2022.
The inventory of homes for sale fell 29% in March 2022 compared to March 2021, and the average number of days on market fell 12%, from 59 to 52.
And in March 2022, for the first time this year, the average percentage of listing price paid exceeded 100%, reaching 100.2%, meaning the average home is being sold for more than the asking price.
The statistics for townhouses and condos were equally dire for March 2022. And in rental markets, the situation is little better, if at all.
An April report from rent.com found that the average rent for a one-bedroom apartment in Jersey City was $3,847 per month, a 46% increase from 2021. Two-bedroom apartments saw their rent increase by 29%.
The growing competition, now reaching fever pitch, was also evident when Tumang and Motos were looking late last year.
“The bidding war was crazy,” Tumang said. “We would bid cash and bid $10,000 more and we were beaten because there were some who made a mortgage and they bid $50,000 more than us.”
Tumang described the house they finally landed as a “superior fix”. She and her husband invested around $30,000 in renovating floors, removing carpet and wallpaper, and installing new appliances, and they couldn’t move in until October 2021.
But Tumang isn’t worried about the investment: Based on what similar homes were selling for, she estimated that she and her husband’s home had already appreciated at least $30,000 in their time there. were living.
“The pace of things in the vernacular could be called crazy. But crazy isn’t really the way to describe it, because it’s very calculated,” said Gene Cordano, president of the New Jersey branch of real estate firm Brown Harris Stevens, explaining that buyers are just doing what they want. they have to do to be competitive.
Cordano said he’s heard of never-before-seen steps such as buyers offering to forgo inspections and appraisals to speed up sales and make their offers more attractive, and it’s now common to open with your highest bid. possible just to get a foot in the door with a salesperson.
“At almost any price point, you’re bidding something because you have multiple bidders, and by multiple I don’t mean three or four, I mean 10, 15 or 20,” Cordano said.
Cordano said the market was tough due to low inventory. Sellers may be reluctant to list their home, Cordano said, because they don’t want to compete in the market right now to find a new one.
“The dilemma for this seller is, where do I live after I sell it?” Cordano said.
Other real estate agents say the market is resetting to where it should be after the pandemic.
Sawyer Smith, founder and president of Sawyer Smith Residential Brokerage in Jersey City, said he knew of a property near Hamilton Park that his company listed early in the pandemic and pulled out after two or three months without an offer. He re-listed the property three weeks ago and it sold above asking price in two or three days. Smith called it “an example of a healthier market.”
Tactics such as making cash offers and offering more than the asking price are more common in the suburbs than in Hudson County, Smith said.
The Federal Reserve raised interest rates last week by half a percent, the biggest hike in more than 20 years, to reduce inflation. The move could raise mortgage rates even further, which were already above 5% nationally, and dampen the housing market in Hudson County by putting the monthly payments needed to afford a home out of reach. a greater number of people.
But for those who can enter the market, the rewards are always good. Tumang said everyone in her new home has a place just for them: she has the porch, her husband has the family room, their four-year-old son has his “toy room,” and even their two dogs and their cat have their places.
Motos now works closer to the Bayonne computer store he owns than when he and Tumang lived with his parents in Jersey City. He sometimes passes on the way to meet customers outside the store, Tumang said, and she and their son wave to him from the veranda.
“I just know in my heart, (this is) the house we prayed for,” Tumang said.