A $3.7 million mansion in Alpine is bought
The owner of a $3.7 million mansion in Alpine that was recently purchased, talks about the reasons behind his purchase.
With the pandemic receding, experts had predicted the housing market frenzy would subside as more homes came on the market.
Not so fast.
The planned relief from the housing crisis in North Jersey never materialized.
In fact, in 2022 the market is more competitive than ever. There are fewer homes on the market, and people who want to live in the suburbs and work from home are buying them up quickly — for a price well above asking — in the hope of buying before mortgage rates drop. increase even more.
Real estate listings fell 21% in Bergen County in January from the same month a year ago. The median price in Bergen County is now $590,000, up 5.4% from $560,000 last January.
“The market has been incredibly competitive,” said Chris LaBadia, sales associate at Sotheby’s International Realty in Montclair. “There were just an astronomical number of people with money to spend.”
And many more potential buyers are left on the sidelines, losing the bidding wars.
The last time René Rydberg was house hunting was 13 years ago. Those were easier times, when buyers could thoroughly inspect a home and think about that big purchase, he recalls.
Rydberg, 45, a single father, moved into his new home in Bloomfield in late November. But it was not easy to buy a house this time. He lost 12 bidding wars before finally winning.
“This time it was very fast and very structured in terms of the competition,” he said. “People pay cash and close in 30 days.”
Rydberg was unable to pay cash. But after losing houses, he knew he had to act fast and bid rather than ask. He asked his realtor to write an offer for $435,000 on the three-bedroom house with an asking price of $360,000.
Now is not the time to wait when it comes to making a decision, Rydberg said. Typically, a home will go on the market on a Thursday with viewings through Sunday. You get a chance to view a home to decide if you want to make that huge purchase by Monday when all offers are due, he said.
The level of competition drives up prices throughout North Jersey. In Essex County, the number of homes listed fell 20% while the median home price rose to $512,000, up 0.5% in January. In Morris County, inventory fell 14.5% while the median price rose 12% to $580,000. New listings fell 10% in Passaic County as the median price rose 3% to $430,000. Sussex County saw a 16% decline in listings with a 6% jump in the median price to $333,500.
“For the past few months, the housing market has been completely illiquid and frozen,” said Max Stokes of the Fox & Stokes team at Compass New Jersey in Ridgewood. “In many markets that I specialize in, including Ho-Ho-Kus, there have only been three or three homes on the market at any given time.”
“A perfect storm” is how Stokes describes the current scenario. Sellers were hesitant to register during the holidays and with omicron, as well as worry about finding a new place to live. Buyers are still feverishly buying houses for more space to enable working from home.
Homes in the Montclair area have sold 12% to 15% above demand over the past two months, LaBadia said. There are even cases where a sale can exceed demand by more than 50%, such as a house on Park Street in Montclair with an asking price of $869,000 that sold for $1.38 million, he said. -he declares.
As mortgage interest rates rise, people are rushing to buy homes. The average rate for a 30-year fixed-rate mortgage rose to 4.05% in mid-February, the highest since October 2019. The Federal Reserve made it clear at its last meeting that it does not consider not inflation as transitory and expected it to start raising interest rates in March.
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Rising interest rates are hurting the market, said Carolyn Morganbesser, senior director of mortgage originations at Affinity Federal Credit Union. People who have locked in lower mortgage rates are rushing to buy before their lockdown expires – and those who don’t yet have a mortgage to buy a home are thinking twice, she said. While interest rates aren’t too high, they haven’t hit 60-year lows in the past two years.
For a buyer who already has an outstanding mortgage application and hasn’t locked in a rate, Morganbesser suggests locking in now because the Fed is expected to raise rates four to five times this year.
Beat the competition
What can a buyer do in this competitive market? Acting quickly is key, Stokes said. Buyers need to understand their finances and the transaction.
As nerve-wracking as making a quick decision, Rydberg did it knowing there was no other way in this market. He enjoys his house with his two sons and does not hesitate to pay extra, believing that the value will increase.
It often takes a buyer a while to see the realities of the current market, Stokes said.
“At the end of the day, buying a home is one of the most important financial decisions people make in their lifetime,” he said. “So tempering emotions and stress in the process is key.”
Mary Chao 趙慶華 covers the Asian community and real estate for NorthJersey.com. To get unlimited access to the latest news from North Jersey, please subscribe or activate your digital account today.
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