SCOTCH PLAINS/FANWOOD, NJ -- During the month of June, The New York Times twice reported on the exodus of New Yorkers from the five boroughs. In an article entitled, The Pandemic Sent Young New Yorkers Packing. Will They Return?, Matthew Haag reported: Young people who came to the city from elsewhere in their 20s and 30s to pursue their dreams have packed up and left in waves. Many of them are unemployed, were furloughed or have taken big pay cuts.
In The Agonizing Question: Is New York City Worth It Anymore?, Alyson Krueger wrote that The pandemic alone, however, poses new challenges for a city that thrives on, and is packed with, people. It also comes at a time when New York is pricing out those who are perfectly capable of working elsewhere remotely.
Manhattan residents, as well as commuters from congested Hoboken and Jersey City just across the river, are flocking to suburbs like Scotch Plains, Fanwood, and Westfield, and they are driving up real estate prices.
Paul Lamastra of ERA Realtors on Second St. in Scotch Plains says that three factors have combined to drive the local market up.
"First is the COVID effect; people are bailing out of the city, and that is driving up demand. At the same time, inventory is low," Lamastra said. "People were not putting their houses on the market in the early spring because they didn't want people walking through their homes."
When demand is high and supply is low, prices soar. The real estate veteran says that the bidding wars are similar to what they were in the mid-2000s. The difference is that today, interest rates are much lower than they were back then.
"You can get a 30-year fixed mortgage at 3.25%. Those rates weren't available in 2005, for instance," added Lamastra, who said that one recent home he sold had 10 offers on it and that many others in the area are being sold for tens of thousands above asking price.
"Homes in the $350,000 to $650,000 range in Scotch Plains and Fanwood are booming, and the market for homes in the $800,000 to $2.2 million range are also good," Lamastra said.
"We see a lot of young families looking to move to the area, many of them are couples with kids under age three," Lamastra explained.
Who is selling?
Many sellers are retirees who are moving to parts of South Jersey, North and South Carolina, and Florida, according to Lamastra.