What is the forecast? An Expert Perspective on the NJ Real Estate Market | survival guide
Although real estate can be as volatile as the weather, especially given the unpredictability of the COVID-19 pandemic, there are ways to better understand the New Jersey residential market. The Princeton Mercer Regional Chamber offers speakers a platform to discuss what lies ahead in its 2022 Central NJ real estate forecast, which will take place Friday, March 4 at the Princeton Marriott Hotel in Forrestal on College Road East in Plainsboro .
Billed as “Central New Jersey’s largest diverse gathering of real estate professionals,” the chamber’s ninth annual Real Estate Business Alliance program runs from 7:30 a.m. to 10:30 a.m. and includes breakfast, networking, comments and estimates on the future of the industry. Cost: $55; $45 for members. Visit www.princetonmercerchamber.org to register or for more information.
Presenters include residential keynote speaker Kevin C. Gillen, senior fellow at the Lindy Institute for Urban Innovation and assistant professor of finance at Drexel University, as well as commercial keynote speaker Gus Milano, president and COO of Hartz Mountain , based in Secaucus. Industries. Milano is also president of NAIOP New Jersey, the state chapter of the commercial real estate developers association.
Aubrey Haines, CEO of Mercer Oak Realty, shares Princeton’s regional forecast with Judson Henderson. Haines is due to speak on the business side of things as Henderson, the Official Broker and Managing Member of Callaway Henderson Sotheby’s International Realty, will discuss residential forecasting.
Henderson is no stranger to the event. As a regular attendee, he sees the program as “a good balance” between local commercial and residential perspectives.
Depending on the keynote or the guests, he continued, the day’s proceedings are indicative of national, regional or even national trends currently affecting the real estate market.
Henderson’s agency is based on Nassau Street, but its reach and exposure goes beyond helping all Central New Jersey residents find the perfect home, even when the process has been complicated by the COVID-19 pandemic. 19 in progress.
“I can talk about not just what’s going on in Princeton or not just what’s going on in West Windsor, but looking a little bit broader, in terms of our area of expertise, which is this central segment of New Jersey in as a whole,” he said. . “Markets generally run out of inventory, and that’s certainly a theme in our region.”
Inventory refers to new listings on the market, which means that if homes aren’t consistently coming up for sale, potential buyers have less land or buildings to choose from.
“It’s no secret there; it’s expensive to live in this area. This is partly due to high property taxes, high state income taxes, etc. “continues Henderson. “But because of that, we don’t have a ton of our rental inventory.”
Using Princeton as an example, Henderson recalls that people who were having trouble selling their homes started renting them out to others as a fallback.
“Well, over the past two years, that’s not been a problem,” Henderson says, with now-profitable sales quickly depleting rental inventory. “[There’s] so much extra pressure on people who come here to buy a house or to rent a house, because even [with] choices from a rental perspective, there’s not a lot of plan B for people right now. There’s no part of this market that hasn’t been completely turned around.
To appeal to a range of potential homeowners, property structures and designs vary from condos, townhouses, single-family homes on smaller postage stamp lots, and larger estates with equestrian facilities.
“It’s really a much more diverse housing stock than people realize, so it’s hard to generalize about that market, in our area, what’s going on across the board, because it’s very specific to individual counties, and even to certain products, within those municipalities. says Henderson.
If a house is in “excellent, turnkey condition” and needs little or no work, adds Henderson, its price is likely higher. Due to the supply issues of the pandemic and inevitable delays, people are more willing to pay a higher amount for a home that does not have or need renovations to function.
The converse of this means that residents who are able to make these improvements have the upper hand, as any successfully completed project is likely to increase the financial value of the property.
“There are values for people who are willing to take on this job because there are fewer people in this position,” adds Henderson. Outside of the pandemic and in a “normal” market, he says, trends vary over time.
“Some of them are desirable and some of them are not,” says Henderson, illustrating his point with details of the 2008 recession. According to Henderson, after the economic crash, people began to prefer smaller, more efficient homes. with minimal walking distances to town.
“Now we’re in a post-pandemic world where they say they’re still desirable, but there’s been a renaissance for properties that have a little more wiggle room and a little more lifestyle within reach. by hand,” he notes.
With the possibility of being “stuck” or working from home more relevant than ever, the pandemic has changed not only what homeowners tend to value, but even minute details such as “floor plan changes that have emerged” in recent years.
At the start of confinement, Callaway Henderson Sotheby’s International Realty, alongside other players in the real estate world, saw everything come to a halt. Then, an explosion of interest revitalized the housing market, creating a surprising, yet appreciated, new reality for the area.
“We were completely inactive for a few months not knowing what was going to happen, and then all of a sudden real estate almost went full 180 where we’re as busy, if not busier, than we were. ever been,” says Henderson, the company was then tasked with managing both the perils of a pandemic and the ongoing risk of exposure to COVID-19.
Going forward, especially in the context of the “2022 Central NJ Real Estate Forecast,” Henderson finds that some market shifts are simply non-negotiable.
“Affordability is always key,” he says. “When house prices are going up as much as they are, the biggest thing that’s going to influence the year ahead is what happens with affordability and interest rates.”
“It’s really starting to have an impact on what people can afford, and that’s going to be key to whatever happens this year,” Henderson said. “Last year when interest rates were so low and the market was in a bullish environment, people were there to afford those homes or at least people were there to pay higher prices. .”
Henderson, who will speak at length about all of his professional expectations, says the projections ultimately revolve around what New Jersey tenants and landlords are willing to tolerate.
“How much more price appreciation and higher interest rates can people really handle?” he asks for tendencies. “People will chase affordability. They will find what they want in terms of housing and then move to a secondary municipality.
Henderson thinks those traditional boundaries may not be as important as they once were, with residents feeling more inclined to relocate for their ever-changing needs.
“If people don’t like what they see in a municipality, they’ll venture into a municipality that’s more affordable,” he says.