Q: Are housing rent prices finally going down? Helen, Hoboken, NJ A: The incredibly high rent price growth that occurred during the pandemic is slowing in many local real estate markets. Normally, rent prices increase at a pace slightly higher than inflation. Between 2010 & the start of the pandemic, most local real estate markets saw rent price increases between 3-4% annually. During the pandemic, rent prices skyrocketed driven by inflation showing double digit annual increases in many local real estate markets. Nevertheless, signs point to rent prices stabilizing particularly in local markets that saw the highest rent price increases during the pandemic due to many factors including temporary migration out of city centers. One factor that is slowing rent […]
continue reading A: Happy Thanksgiving 2022 to everyone in my real estate insider family! Here are 3 recent real estate trends I am thankful for this Thanksgiving: lower inflation Higher housing inventory home prices flattening and housing becoming more affordable
continue reading Q: Why did home prices go up so fast during the pandemic? Sam, Westfield, NJ A: There are several reasons home prices went up so fast during the pandemic, but one overlooked reason is the “investor mania” that was unleashed by speculative home buyers and investors. Many amateur real estate investors and buyers poured into local housing markets during the pandemic in hopes of building Airbnb and VRBO empires. In addition, Institutional investors ramped up their algorithm-driven home buying and rapidly expanded their residential real estate portfolios during Covid. All this increased demand for residential homes drove home prices higher than otherwise probably would have been. Thanks for your question, Sam. For more real estate tips and information visit […]
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Lumber prices have fallen to their lowest level in more than 2 years back to the cost it was before the pandemic building boom.
continue reading The US economy has now recovered 98% of the jobs lost during the initial months of the pandemic. Jobs and personal incomes more than any other factors drive home prices.
continue reading 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: I hear a lot of talk about inflation lately. How will inflation affect homeowners like me? Mike, Rutherford, NJ A: Yes, the pandemic has had a big impact on economies worldwide and has resulted in much higher consumer prices for many items. The good news for homeowners is that historically, real estate has been a great hedge against inflation. In the 1970s when inflation was high, home prices outperformed consumer prices. Since the 70s, home price growth has matched or exceeded consumer price inflation. This is good news for homeowners because the appreciation of the value of your home, which for most people is by far their most valuable asset, in the long run is much more important than […]
continue reading Q: Gerald, I have been a builder for over 20 years and the price of materials and labor are crazy right now. Do you think the price of lumber and other building materials will go down anytime soon? Joe, Point Pleasant, NJ A: After several months of price declines last spring and summer, lumber prices are skyrocketing once again. Lumber prices have almost tripled in the last 4 months. In fact, the latest wave of rising lumber prices adds almost $20,000 on average to the price of a new home which in turn reduces housing affordability especially for first time home buyers. Soaring lumber prices are unfortunately part of a bigger supply chain disruption problem caused by waves of the […]
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: Now that he is vaccinated, my son is moving back to Manhattan. The realtor he spoke with told him to prepare for a bidding war with other tenant applicants. Are there really bidding wars for apartments now? Harriet, Mendham, NJ A: Yes, it sounds crazy but there really are bidding wars now both for city apartments as well as for single family home rentals. After many people fled Manhattan during the pandemic particularly at the outset of when NYC was an epicenter for Covid spread, many people are being called back to work and others like your son, who are now vaccinated are being drawn back to the city for the same reasons they were drawn to cities in […]
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 Q: Gerald, a lot of people moved to suburban and rural areas with more space when the pandemic started. Has that trend continued? Martha, Manville, NJ A: People fled urban areas in 2020 to buy and to rent seeking perceived safety from the pandemic as well as more space for their families and for home office space. That initial trend during the pandemic has reversed itself and as I anticipated people are moving back to urban areas both to buy and to rent. For example, rental demand in Manhattan in summer 2021 was the highest it has been in 10 years. Hudson County, where my Jersey City office is located, has recently been the highest performing housing market for residential […]
continue reading Q: Gerald, I am a landlord who has been having trouble collecting rent since the pandemic started. Are rents headed up or down? Earl, Plainfield, NJ A: In July U.S. rents rose 7% for one bedroom apartments & rose almost 9% for 2 bedroom apartments year over year. As the economy improves, people are moving out of shared living situations seeking their own piece of terra firma. In addition, home prices have skyrocketed recently particularly in 2020 when the pandemic first hit and people were fleeing cities looking for more space. Eventually, as home prices climb, many home buyers, especially 1st time home buyers are priced out of the market, which is another reason rents are on the rise. Where […]
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: 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: I heard they may roll back the property tax deduction limitation from the last tax bill. Is that true? What will the impact be on New Jersey real estate? Henry, Sayreville, NJ A: SALT stands for state and local tax. The 2017 tax reform bill capped SALT deductions at $10,000 so rolling back the SALT deduction limits would impact residential real estate in New Jersey particularly in North Jersey where property taxes are higher. In fact, six NJ Counties have property taxes that on average exceed $10,000 per year. Property taxes aside, the pandemic made many suburban locations more appealing to home buyers and if the SALT Deductibility Act is passed it will restore the pre-2017 deduction. If passed, […]
continue reading Renters have racked up $70 billion in unpaid rent since the start of the economic crisis caused by the pandemic.
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 Apartment tenants who are missing payments on the first of the month are taking longer to catch up, a sign of financial strain in the pandemic that could affect owners and lenders.
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 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.
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