Montclair real estate market holds steady in the face of COVID-19
by Andrew Garda
Like virtually every industry in New Jersey, real estate has taken a hit during the COVID-19 pandemic.
While seeing a reduction in sales and inventory, Montclair’s sale prices remain stable according to local realtors.
Nationally, April’s home sales dropped by 17.8 percent from March’s reports, according to the National Association of Realtors. Sales have also decreased 17.2 percent this year, compared to the January through April of last year. Montclair saw just 83 active listings this year, down from 185 in 2019, with 17 under contract versus 70 last year, according to numbers provided in a mid-May email from Stanton Company of Montclair.
Prices in Montclair, however, are still above asking price, going for 103 percent of asking price in April, according to the same email.
Richard Stanton of Stanton Company said the median price of April house sales was $799,500 this year, up from the $679,000 in April of 2019. He attributes this to fewer homes being on the market.
“When inventory is low, the median price of active listings goes up, as they have a longer sales cycle,” he said.
Jane Konzelmann, of Berkshire Hathaway HomeServices, said the Montclair housing market is holding up well.
While there was a stall in mid-March and April due to COVID-19, things have begun to come back as consumers feel better about their finances, job situations and the ability of the state to begin opening back up, she said.
“We are seeing an increase in the number of new listings coming on the market, especially in the last few weeks,” Konzelmann said.
It helps that before the closure, 2020’s local market was already in good shape.
“Before the bottom fell out, we were rocking a 5 percent increase, year over year,” said James Stefanile of Berkshire Hathaway HomeServices, pointing out that was a nationwide trend, not just in northern New Jersey.
Stefanile said that the low mortgage interest rates help as well.
“Interest rates are in the low three percent,” he said. “When my parents put their first house in 1951, that's where rates were also. These are historic lows.”
Another advantage Montclair has had is its proximity to population centers like New York City. Real estate experts are reporting city dwellers are now looking for less populated, more open living. Living under quarantine in tight quarters could be driving this exodus further.
“The big story is that we're seeing a lot of buyers from New York,” Stanton said. “All the different boroughs [as well as] Jersey City, Hoboken. Pretty much any dense urban area.”
“These may be people who were thinking about it. They're going to do it, maybe this year, maybe next year, maybe even the following year and this has just sort of accelerated their decision process,” Stanton said.
Stefanile said the larger homes with amenities are a focus.
“The luxury segment is picking up because people coming out of New York are going to be looking for a large property that has a pool and a tennis court and where they don't have to go around to the public facilities,” he said. “They’ve got everything in their backyard and we're seeing an uptick in that.”
More houses are coming on the market each week. Stanton said that as of Friday, May 21, 32 homes were new listings, compared to 21 in April. Of those 32, 10 have already accepted offers.
All three realtors feel that summer, when the market traditionally is strongest, will be a very good period as well, though it might be slightly delayed due to the stall in March and early April.
Beyond that remains a mystery. The realtors felt that in a best-case scenario, the rest of the year could be very robust, even into 2021.
“[Experts are] predicting by 2021 [nationwide numbers to be] back up above where we were when the bottom fell out,” Stefanile said. “So we'll be back up to six percent of an increase and then that will continue along the normal runs for the next few years.”
Montclair numbers should be even stronger, Stefanile said.
A second COVID-19 wave in the fall — an event some epidemiologists are expecting — could throw the market back off.
“We’ll be better prepared because we've gone through it now,” Konzelmann said. “Our market is a little more resilient than other markets because of our proximity to New York City. We are in a transit village and the community itself is very, very different.”
Even without a COVID-19 return, Stanton thinks there could be a ripple effect down the road due to the economy.
“I'm curious to see what will happen in a year, when we get a trickle down in the economy,” he said. “If your market is $200,000 condos and you've got two people that are in the service industry and just have lost six months [or even], 60, 90, 100 days of wages. I think those markets are going to get depressed as far as purchases go.”