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why are there so many buyers Why are there so many buyers?  Every time you find a house, it seems so do others.  While I know this is frustrating, it’s not going to end soon.  Because it won’t, waiting is not a good idea.  Let me explain it all for you.

We’ll start with traditional reasons why people buy a Bergen County home.  Then I’ll tell you how current market conditions made things worse.

Why People Buy Bergen County Homes

Bergen County is next to not only the largest US city but also one of the world’s major capitals – New York City.  NYC has been an exciting place to live and work.

When the allure of urban life wanes, Bergen County is on the A List of places to go.  This is because of our proximity to NYC, diversity and everything we have to offer.  We are a prime destination for people with school aged children. There are so many award winning school districts.  Recreation is huge too.  Town parks are bergen county everywhere plus there’s a vibrant County Parks Department.  We even have 9 public golf courses and in winter a ski resort.

70 different locations make up Bergen County; there’s something here for everyone.  With great suburban neighborhoods, excellent town and County services plus proximity to NYC, we are an unbeatable combination.  As a result, there is always strong demand for Bergen County homes.

2020 and 2021

While I love NYC, it has become an unwelcoming presence.  There was an absolute panic to get out of NYC last year due to Covid 19 and civil unrest.  This year New York buyers tell me that they no longer feel safe.  It’s become so bad that all Mayoral candidates say they’ll save NYC from the current adminstration.  As a result, more people than you’d expect are moving to the suburbs.

Covid 19 pushed people out of NYC and urban areas in general.  This is because it’s impossible to social distance in any city.  At least in the suburbs you have space, a backyard and privacy.  While 2021 is not the panic we had last year, Covid still has an impact.

There’s the other Covid effect too.  We have learned to work remotely.  It’s no longer essential to be in that Manhattan office.  This is a fundamental and permanent change.  Of course New York offices will open up in the future.  However not all of them will.  As a result, the suburbs will gain significantly.  All of this increases the number of home buyers here.

mortgageLet’s Do The Math

What is the most expensive part of owning a house?  The mortgage loan itself.  It’s the cost of the money you borrow that determines what you can afford.  This cost is at historic lows.

A $400,000 mortgage at 3.25% is $1,736.05 per month.  This increases to $1,902.07 at 4%.  Doesn’t seem horrible, does it?  Well it sure is because you now qualify for 9.5% less house.  Your $425,000 home today is a $385,000 house tomorrow.  Should rates rise 1% you’re really out of luck.  That’s 13% less house or $369,750.

Because people today are so well educated, they “get it”.  As a result, more buyers than ever want to get a home now.

Renting versus Buying

It used to be that renting allowed you to save up for a down payment.  Those days are gone.  Since rents have skyrocketed, this rent vs buying no longer works.  Consider this:  A reasonable 2 bedroom apartment is around $1,850 per month.  This equals a $425,287 mortgage

OK, I know.  Owning a house does cost more.  Let’s see:  $400,000 mortgage = $1,736 + $1,000 taxes/insurance = $2,736 or $886 more per month.  You do get some write off on your property taxes and mortgage interest which helps.  Additionally you get $400,000 or more tax free when you retire.  What do you get by renting?  Zero.

Why Are There So Many Buyers?  You know the answer now.  As you can see, nothing will change soon except rates.  Right now the Fed is keeping rates down artificially.  That day will end and when it does, I expect rates to rise quickly and severely.

Keep reading this blog and tell your friends about it.  I’ll make sure you’re up to date on everything.

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