Lumber prices have fallen to their lowest level in more than 2 years back to the cost it was before the pandemic building boom.
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Q: How do you think the invasion of Ukraine will affect real estate? Peter, Englewood, NJ A: Any war, especially one where civilians are explicitly targeted brings unfortunate death, destruction and displacement. Interest rates often go down in times of uncertainty, like they did during the initial Covid pandemic lockdowns because investors usually place more capital into safer assets like bonds. This would lead to declining mortgage rates or at a minimum a slowing of mortgage rate increases. It is also possible that a prolonged war in Ukraine may trigger a recession in the US although it’s too early to tell at this point how the conflict will last or when the conflict will end. During a recession, there are […]
continue reading Q: What should we expect in housing in 2022? Julie, Bayonne, NJ A: The Omicron covid-19 variant looms large over the economy overall in early 2022 and will likely extend the supply chain disruptions we’ve seen throughout the pandemic. Mortgage rates are likely to be volatile this year and if and when mortgage rates increase, it will in turn reduce housing affordability and likely increase rents. Personal incomes are rising massively and will likely continue to increase—personal incomes more than anything else drives housing markets because personal incomes are what allows home buyers to qualify for and pay down mortgages. Home sales are likely to increase in 2022 but at a slower pace than in 2020 or 2021 and home […]
continue reading Q: I’m recently retired and plan to spend most of the winter in Arizona. How can I keep the pipes in my house from freezing during the winter? Joe, Buffalo, NY A: Winter time in many colder places unfortunately means increased risk of pipes in your home or property freezing and bursting. Here are 5 tips to help prevent pipes in your property from freezing: Wrap pipes near exterior walls and in crawl spaces with pipe insulation or with heating tape. Keep your home heated when it’s cold even if you’re going away or leaving the house for a long period of time. Open cabinet doors below sinks to allow heat from the home to circulate. Cover or close […]
continue reading Q: My wife and I bought kitchen appliances and have to wait more than 6 weeks for them to be delivered, I assume because of the pandemic. Is there a way to get appliances faster? Brad, Watchung, NJ A: Real estate is one of many industries that have been affected by supply chain disruptions caused by the pandemic. Many appliance manufacturers have maintained lean inventories for a long time to minimize costs, so recent supply chain disruptions caused by the pandemic have made it difficult for them to keep up with recent increased demand. In addition, manufacturers and suppliers are operating with COVID-19 safety protocols that slow production. Independent appliance dealers are often faster and more reliable now during […]
continue reading Q: Gerald, how long do you think the current seller’s market in real estate will continue into the future? Andy, Greenwich, CT A: While there are certainly many more buyers than sellers in many local real estate markets nationwide, which is why home prices have been going up so fast in so many places, there really is no such thing as a seller’s market because buyers always ultimately determine price. Buyers always determine the price when assets are sold because the person with the money always decides the price. The value of a property is determined by the price a buyer is willing to pay for it. Even when there are many more buyers than sellers as there are now […]
continue reading New Jersey Gov. Phil Murphy has given lower-income tenants in the Garden State protection from eviction until the end of the year, as well as setting aside an additional $750 million in coronavirus emergency rent and utility-payment assistance.
continue reading Q: Gerald, how will the recent spread of the delta variant affect real estate? Oscar, Bayonne, NJ A: After things on the horizon were looking better for the summer and the rest of the year, vaccination rates plateaued and the delta variant which we knew was more transmissible has been spreading like wildfire. The damage that the delta variant will do both to the economy and real estate will vary from region to region based on vaccination rates and people’s behavior like mask wearing. Places that still have a large majority of unvaccinated residents like Louisiana will be affected more than states that have higher vaccination rates–ICUs and hospitals in unvaccinated areas are full or close to capacity. As we’ve […]
continue reading Q: Prices of lots of things have gone up since the pandemic, should I expect to pay more for my homeowner’s insurance also? Eddie, Holmdel, NJ A: Insurers worldwide are constantly recalibrating the risk they insure for particularly now in the wake of the COVID-19 pandemic, which has changed many things in the world of insurance. The pandemic has reduced the risk of burglaries from happening because people have been home more often. The constant presence of residents also makes them more likely to immediately notice and address any structural problems on their property, which lowers the likelihood of filing claims. At the same time, one unexpected consequence of the pandemic was the rise in sewer backups–sewer backup coverage is […]
continue reading Q: When the foreclosure moratorium finally ends will there be lots of bank owned property opportunities? Rose, Brick, NJ A: There will certainly be more bank-owned properties (aka REOs) than there are now because foreclosure sheriff sales stopped during the pandemic. However, since home inventory is still so low in most places in the US, we should expect banks to be greedy–looking for top dollar for every property they foreclose on and then sell. I anticipate that banks with their REOs will make the same mistakes that many home sellers are making now as home prices continue to climb–overpricing homes hoping someone will pay higher than market price. If and when that happens, it’s important to be patient, because when […]
continue reading Both private and government buyers are finding real estate conversion opportunities with U.S. hotel owners who are reevaluating the highest and best use of their properties due to the COVID-19 pandemic.
continue reading Q: Gerald, I’ve heard you talk about the importance of home zoning reform before. What do you think about the White House’s $5 billion housing proposal? Annabella, Union City, NJ A: There is certainly a big residential housing shortage in the US right now. The number of homes for sale now is less than half the number of homes available for sale 15 years ago. The White House is mulling a $5 Billion plan to ease the national housing shortage by pushing local governments to allow apartment buildings in neighborhoods that are currently restricted to single-family homes. The proposal provides financial incentives to local governments that change zoning laws restricting many neighborhoods to single-family homes. Zoning laws were rare in […]
continue reading Q: As a realtor, I look forward to the spring which is usually the strongest home buying season of the year. With Covid, do you think spring buying will be strong in 2021 like in most years? Gladys, Basking Ridge, NJ A: Great question, Gladys. The reason that Spring is traditionally the strongest home buying season of the year is because it normally takes a few months to close on a property after a purchase offer has been accepted and home buyers with kids ideally want to be in their new homes before the start of the fall school year. The pandemic has disrupted both work schedules and school schedules and likely has also disrupted the predictable seasonality of home […]
continue reading Q: When do you think home prices will fall? Scott, Edgewater, NJ A: Whenever home prices increase faster than incomes, a home price correction is inevitable. Home prices in NJ rose almost 12% in 2020—this huge increase was not the result of local real estate market fundamentals, but rather was caused by fear of coronavirus. Although incomes in general did surprisingly increase in 2020, incomes certainly did not increase as much as NJ home prices. Therefore, sometime in the next few years perhaps in 2023 there will be a downward home price correction as local real estate markets in NJ approach market equilibrium. Thanks for your question, Scott. Good luck. For more real estate tips and information visit my blog […]
continue reading Q: Can we expect lots of foreclosures after the foreclosure moratorium is lifted like during the global financial crisis? Valerie, Edison, NJ A: Although mortgage delinquencies have tripled in NJ in the last year, the current mortgage delinquency rate now in NJ is 5.4% which is less than half the delinquency rate in 2013 after the global financial crisis which was 11.8%. Consequently, I don’t believe the foreclosure rate will be as high when the moratorium is lifted as during the global financial crisis after 2008. Nevertheless, foreclosures will inevitably increase after the foreclosure moratorium is lifted because so many people have lost their jobs and because all the foreclosures that were in process before the pandemic were temporarily postponed […]
continue reading Q: What can we expect will happen in real estate after everyone is vaccinated? Sandra, East Brunswick, NJ A: There are many homeowners who’d decided to sell who then pulled their homes off the market when the pandemic hit because they were concerned about letting strangers into their homes. There are also many homeowners who wanted to sell but didn’t over the last year for the same reason. After we’ve achieved herd immunity, many of these homeowners will put their homes on the market to sell which will provide much needed additional housing supply in local real estate markets nationwide. Thanks for your question, Sandra. Good luck. For more real estate tips and information visit my blog at geraldlucas.com.
continue reading Q: How will the coronavirus vaccine rollout affect housing? Curtis, Woodland Park, NJ A: As COVID-19 vaccines slowly roll out, people are wondering what the impact will be on local housing markets. The chief economist at realtor.com recently said that “we’re going to settle somewhere in between where we were before COVID and where we were during COVID.” She went on to say that “as the risk of serious illness declines because more people are vaccinated, we expect to see more sellers,” who may have chosen to delay selling their homes during the pandemic. Additional housing supply from previously skittish sellers is critical now after housing inventories hit an all-time low this past December. The expansion of telecommuting amid the […]
continue reading Q: Many people during the pandemic are working from home. What’s going to happen to all the empty office buildings? Sarah, Glen Ridge, NJ A: As more and more office spaces are empty during the pandemic, New York Governor Andrew Cuomo has thrown his support behind a proposal to let commercial landlords convert office and hotel buildings in New York City to residential use. More and more businesses are re-evaluating their office space needs given that remote work has proven to be not only safer for employees but also more productive and less expensive for businesses. Converting unused commercial space for residential use is a very smart public policy development that will help alleviate the residential housing shortage that has […]
continue reading Q: Home prices seem to be going up still even during the pandemic, do you think this will continue? Will, Montclair, NJ A: Great question, Will. Housing demand is far outpacing supply right now which is why home prices in so many places continue to rise in many local real estate markets despite the pandemic and all the economic calamity that has gone with it. In Q3 2020, half of all listed properties sold within 3 weeks down from 1 month a year before and more than ⅔ of all listings went under contract in less than 30 days. However, the basic rules of real estate ultimately supersede short term trends. Right now home price growth is outpacing personal income […]
continue reading High-end, four-and five-star apartment buildings in urban areas have struggled to maintain rents, and in some cases struggled to retain residents, since the onset of the Coronavirus pandemic.
continue reading Q: My wife and I had been planning to sell our home soon but we pulled back when the pandemic lockdowns began. We still want to sell, what’s different about selling now in the pandemic? Ravi, Brooklyn A: Residential real estate has changed since the onslaught of the pandemic–one of those changes is the current foreclosure moratorium, which has effectively reduced the number of available homes for sale on the market. This reduction in available homes makes competition amongst buyers for houses that are currently for sale more fierce. This intense competition among buyers coupled with record low mortgage rates is making it easier for many homeowners to sell their homes right now. In my new book, “How To Sell […]
continue reading Q: My brother who has been working in Silicon Valley moved to Idaho where rents are cheaper and is working from home. Will this trend lower housing prices in cities across the US? David, New Brunswick, NJ A: There was definitely an exodus of people from Manhattan in the early days of the pandemic particularly when infection rates were very high in March and April of this year as people migrate looking for more space–a similar phenomenon occurred in San Francisco. In both Manhattan and San Francisco, which are the two most expensive real estate markets in the US, housing inventory is nearly double what it was last year, as homes are staying on the market twice as long as […]
continue reading Q: Do you think rental properties are still a good investment now during the pandemic? Scott, Nyack, NY A: The strength of any investment depends on the numbers (ROI etc.) vis-a-vis the investor’s goals. The pandemic has certainly affected rental property, particularly multi-family rentals because tenant behavior has changed as a result of the pandemic. For example, now that more tenants are staying home during the pandemic, many of the costs and expenses generated in rental properties have increased for things like water, electricity and gas, trash removal as well as cleaning & disinfecting common areas used by tenants, like stairwells, elevators and lobbies. In addition, with so many more people working and learning from home, rental properties are facing […]
continue reading NJ’s new jobless claims hit low point amid pandemic rebound.
continue reading Q: I’m a realtor. Everyone is talking about whether schools will reopen fully this fall because of the Coronavirus shutdowns. Many of my buyers in the past have tried to time their closing so their kids don’t have to switch schools mid-year. Will the school re-openings affect home buying activity this fall? Christina, Summit, NJ A: COVID-19 has disrupted traditional home buying seasonality in a major way. Traditionally, the Spring has the highest home buyer demand as families as you pointed out often try to close on the homes they buy during the summer before the school year begins. The pandemic lockdown in the spring postponed the usually strong spring home buying market and the confusion around school reopenings may […]
continue reading Q: More and more people are filing for unemployment now. How will this impact real estate? Cameron, Essex Fells, NJ A: The job market serves is one of the most important factors that determine how many people will buy homes. In general high unemployment creates lower expected future income and lower demand for housing overall. People who have unfortunately lost their jobs are unlikely to buy homes in the near future. While wealthy buyers may be shielded from the economic downturn that the pandemic has caused, they may be hesitant to spend money on property as we face economic uncertainty. The effect of the coronavirus on the housing market is hard to forecast, a lot depends on how deep the […]
continue reading Q: How has real estate changed because of Covid-19? Gail, Hempstead, NY A: We are still in the early innings of the pandemic but so far the same basic rules of residential real estate still apply (not sure the same can be said about commercial real estate, but that’s another discussion). As was the case before the pandemic, supply and demand affect residential real estate more than any other factor. Here are 3 salient changes I’ve noticed since restrictions in my local market have been lifting: 1. There is pent up demand that is driving sales and even bidding wars 2. Housing supply is even lower than before the pandemic as some property owners have pulled listings off the market […]
continue reading Q: With unemployment so high now, do you think people who sell their homes now should lower their asking price? Kevin, Palisades Park, NJ A: Every local real estate market is different and has and will respond to the pandemic and the economic fallout that results from it in its own way. What I’ve seen so far during the pandemic in north jersey is after the initial lockdown in March and April a rebound in buying activity in May and June due in part because the virus is currently under control in our area. There was pent up home buyer demand and even lower housing inventory than before the pandemic which so far has made home prices in our area […]
continue reading Q: How Will A 2nd Coronavirus Wave Affect Real Estate? Hector, Elizabeth, NJ A: In the US, we are unfortunately still dealing with the 1st wave of the Coronavirus because our preparation and response thus far has been so bad compared to the rest of the developed world. Any spike in Coronavirus will reduce mobility which will ultimately have a negative effect at least in the short term on real estate. If and when there is a 2nd wave of Covid-19, the effect will depend on what time of the year a second wave occurs in each local real estate market. If a second wave occurs during the holidays when real estate activity tends to slow anyway it will have […]
continue reading Q: Is it true that suburban homes are more valuable now than properties in cities because of what’s happening with coronavirus? Stan, Morris Plains, NJ A: So far, in the markets I operate in in North Jersey, there seems to have been a shift in buyer demand–higher demand for vacant homes, homes with backyards, homes with home office space and pools. However, the initial perceived changes in demand caused by the pandemic may or may not continue in their current trajectory. Although many people have already predicted a flight from cities to suburbs and more rural areas due to the initial impact of the virus on cities, right now most of the covid-19 hot spots tend to be in more […]
continue reading Q: Real estate sales have slowed a lot during the virus lockdown. Do you think real estate sales will continue to be slow for the rest of this year? Duncan, Greenwich, CT A: Residential real estate buying is typically seasonal with the strongest sales usually occurring in the Spring. Since most of the US was in Covid-19 lockdown for most of the Spring, it is likely that the Spring homebuying spree will shift to later in the year. This shift in demand may in fact occur this summer in places like NJ where I operate that have effectively contained the virus-at least for now. Coronavirus mitigation will have an inordinate effect on the economy and real estate for the foreseeable […]
continue reading Q: I noticed many big institutional buyers of property are holding back now during the pandemic. How much of an equity cushion do you need when you buy investment property now? Jimmy, Franklin Lakes, NJ A: With respect to residential property, more uncertainty requires more of an equity cushion when you buy to mitigate your risk. Take a note from the actions of hard money lenders (HMLs) recently who are lending at lower LTVs thereby requiring higher down payments from investor borrowers and are also requiring borrowers show much higher reserves from investors. The less certain you are about the true value of a property, the less you should pay for it–as a rule, investors should discount their purchase offer […]
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