MILLBURN, NJ — The challenges posed by the unprecedented COVID-19 pandemic have also led to some unique opportunities in the local real estate market.
“After March 15, the housing market froze, and nobody came to see properties, Until the end of April the market was frozen,” said real estate broker Ben Zhang of Western-Eastern Realty in Millburn. “We could not show any properties. It was a very difficult time.”
The market began to change--with some remaining limitations--later in the spring, according to Zhang.
“In May, a lot of people began to take virtual tours of homes on the market,” Zhang said. “Video tours, especially for people from out of town, are an attractive option. It is very difficult to fly here to physically see the property during the pandemic, so a lot more virtual tours were conducted. Before the pandemic, very few people did virtual tours, but now a much larger percentage of people do virtual tours.”
Zhang enumerated several challenges that have arisen in the housing market in the wake of the global pandemic and the subsequent partial shutdown of the economy over the last several months.
Among them, Zhang said, are uncertainty over the state of the economy, a change in the employment status of many, fear of infection and the local controversies over when and whether schools will open for full-time, on-site instruction again.
“Buyers have been hesitating because of not knowing for sure when and where the schools will open,” Zhang said. “That kind of uncertainty makes people hesitant to move. More people will want to move from New York City and places like Hoboken to a good location with good schools once they know schools will be open full time.”
Zhang markets homes throughout Union, Essex and Morris counties, in communities such as Millburn, Short Hills, Summit, Chatham and Madison. He says that the coronavirus ordeal has made suburban communities such as these with easy commutes to the city more attractive to a larger swath of homebuyers now, and the current low interest rates are also luring buyers back into the market now.
“For people in New York City, some want to buy right now to avoid another potential lockdown in the city,” Zhang said. “In the suburbs, you have more activities and more to do in a lockdown, but in a city in an apartment it is very difficult to find anything to do in a high rise during a lockdown. These buildings are 70-80 stories, where are you going to go? And everybody is sharing the same air. In the suburbs, homebuyers can find great schools for kids, and their kids can play in a more spacious area.”
The commute from many of the communities in the area Zhang markets is not complicated.
“Summit is just 35 or 40 minutes from Penn Station in New York, and that’s a shorter commute than it is from Brooklyn or the Bronx,” he said. “Millburn is about 35 minutes to Penn Station in New York, too. And many people are working from home now, too. You have a home here in the suburbs with more space instead of in the city with a one- or two-bedroom apartment. The suburbs have very big advantages.”
Buying in the near term also has some potentially big financial advantages, according to Zhang.
“Buyers can get homes at historically low interest rates right now,” Zhang said. “They can buy a lot more property and pay less. The rate is currently only 3.14% for a 30-year mortgage. That is super low. The rate for a 15-year mortgage is 2.75%. I have never seen it this low before.
Most people need to take a jumbo loan for any home above $640,000. These rates have been this low for about a month. It’s very hard to predict how long that might last. It’s affected by many economic conditions. It will be this low or close to it for maybe a couple more months.
It’s a good time to buy right now.
“And (fewer) buyers because of COVID-19 makes it a good time to negotiate and find a good property in this area at a reasonable price.”