SCOTCH PLAINS/FANWOOD, NJ – As it has impacted everything about life since last March, the coronavirus pandemic has caused a seismic shift in the New Jersey real estate markets. The virus led to an exodus from New York City and places like Hoboken and Jersey City to suburban areas like Scotch Plains, Fanwood, Plainfield, and South Plainfield.
City dwellers found that they could get more for their money, a greater amount of space, good schools, and a more serene lifestyle in Scotch Plains-Fanwood. While the sheer volume of commuters taking the train into Manhattan has plummeted – and may not reach pre-COVID levels again as companies allowed employees to work from home – proximity to the train still makes the area attractive.
According to industry veteran Paul Lamastra of ERA Realty on East Second Street in Scotch Plains, the market saw huge demand in 2020, particularly from June to October. During the pandemic, people were reluctant to list their houses and have strangers walk through it. But once the weather got nicer and the COVID numbers went down in July and August, the market became as hot as the summer itself.
Lamastra said it was the perfect storm for real estate: housing prices went up because of great demand and relatively little supply, while interest rates went way down.
“People could spend more on the price of a house because the interest rates dropped so low. That, in turn, drove up the prices,” Lamastra said. “We had bidding wars that we had not seen since the mid-2000s.”
Although the pandemic hit and shut down everything in March and April, after May 1, it was like a switch was turned on, according to Lamastra.
“The inventory was low, buyers got braver, and the mass exodus from NY began,” he said. “Low inventory and pent-up demand brought multiple bids. While I think the market will straighten itself out in 2021, it will be a solid year.”
Lamastra said listing agents would get 7-8 bids on a house up until November, when the real estate market typically slows during the holidays. In contrast to other years, January is getting busy again. He listed a house in Fanwood on Jan. 1 and had ten showings and two offers in four days.
Something unusual has happened in the past year. Empty nesters have been upgrading, rather than downsizing as their children in their young 20s moved back home because they are not working in the city.
Where will it lead? Signs indicate another strong year in 2021.
“Sellers who used to have to put in a new kitchen in order to sell, don't have to do that anymore. Contractors are busy and their prices are going up. Now, you have to ask this question: is it really worth it to upgrade? Three years ago, I’d have said, fix it up and max it out. “
“The pandemic has been a game changer,” Lamastra said. “Now you can get away with not having an updated kitchen. And it might cost too much to get the money back. Good contractors are busy, and they are submitting high bids. If they lose out on a job, they’ve got other work to do.”
“There are no bargains, contractors are calling the shots,” he said.
With Scotch Plains and Fanwood lacking inventory, Plainfield has become one of the hotter towns in the areas.
“People are moving in. Things are hot in Plainfield. It is moving in the right direction,” Lamastra said. “South Plainfield is also hot, but there’s no inventory. I’ve seen 15-20 people fighting over one house.”
Even high-end homes are moving, as people sell their expensive Manhattan apartments, $1 million+ homes in the suburbs are in demand, whereas they were hard to move a year or so ago.
“There are only a few new homes on the market, so there’s not too much to pick from,” Lamastra said. “People are flocking out of the city, and they can afford this area.”
Looking to put your home on the market? Contact Paul Lamastra https://www.era.com/ERA-Suburb-Realty-Agency-867c/Paul-Lamastra-194443a or call (908) 337-4540 (mobile).