The first half of this year in real estate has been very strong. We all know this from the media. It seems every week there’s a report about how homes are selling. Bergen County homes have been flying but there are some surprising trends.
Home buyers and homeowners need to know what’s happening. So does everyone else because real estate is so important. It’s still one of the major drivers of our economy.
Think about this for a moment. What happens when a home is sold? People often buy paint, appliances, curtains, furniture, tools to hang pictures, etc. There’s a lot of stuff that goes into a house sale too.
Banks, home inspectors, termite inspectors, tank sweep inspectors, appraisers, title compaies, insurance, attorneys, Realtors are all involved. As a result, every time a house, condo or co-op is sold, people are employed and items are bought. Because of all this, real estate is a key part of our economy.
The First Half of this Year
Last year nearly 8,000 single family homes were sold in Bergen County. The New Jersey MLS has it at 7,836. The first half of this year in Bergen County has 3,870. While this is impressive because we still have major closing months ahead, look at the under contract figures.
This is even more impressive. 2021 has 9,403 to 2020’s 7,933. Remember what happened in 2020? We closed the economy for nearly 2 months. It was 2 months for Bergen County homes. In spite of that, we had a good showing. at 7,933. Additionally, the average price a house went under contract at rose by a whopping 17%.
Let’s compare 2021 to 2019 since there was no lockdown in 2019. Here we see 2019 having 8,583 homes under contract. The gap is a lot smaller here but the price increase since then is 23%. Since we’re 17% ahead of last year in pricing, the rise in 2019 was a lot more moderate. Either way, this has been a great time to sell your home.
Condos, Co-ops and Townhouses
Condos, co-ops and townhouses are put together as one group in the NJMLS data. While I wish this was split up, we still can see trends.
This group hasn’t performed as well although it’s been good. Sales this year are way ahead of 2020 at 3,022 compared to 1,807. The average sales price rose 7%. Under contracts for this period are up 9% – so far we have 3,571 this year and 2,231 last year.
Comparing 2019 to 2021 shows a 10% appreciation and 818 more sales (2,204 to 3,022 this year). While this is strong performace, it’s significantly less than single family houses.
How The Pandemic Influences Bergen County Real Estate
While it’s true that single family homes always outperform condos, co-ops and townhouses, the gap is more than I’d normally expect. I believe that this is due to the pandemic.
Because we are next to New York City, what happens there is felt here. 2019 had people streaming out of Manhattan to find space, quiet and a backyard. Being trapped in a NYC apartment with children was more than parents could handle while trying to work. Moreover, working remotely made living in the city irrelevant. You didn’t have to be close to the office. Other urban areas were likewise impacted although without the safety issues of Manhattan.
2021 continues this trend in many ways. New York City is even more dangerous. Remote working has companies reducing office space or moving to the suburbs. When companies open fully, a great many workers will no longer commute 5 days each week. Home office space is not a luxury because it’s now a necessity. Most condos, co-ops and townhouses aren’t set up for this. What’s happened is that an ongoing trend has accelerated tremendously. As a result, office space has become much less valuable.
It’s not that these properties aren’t doing well. It’s just that the gap in performance has widened. There will always be a strong demand for a Bergen County condo, co-op or townhouse. Always popular, they have a lot to offer and at prices New Yorkers perceive as discounted. Having a condo apartment with a knock your socks off NYC skyline view will always be worth a lot. It’s just that as we are adjusting to our new normal, single family homes will, for a time, outperform more than in the past.