People aren’t just flocking to the Jersey Shore to sit by the ocean or take a stroll on a boardwalk.
They’re buying houses.
But the inventory of available homes for sale isn’t keeping up with demand, so real estate agents say buyers are on a mad dash to put in offers, knowing they will lose out if they’re not ready to act fast.
“If you’re not quick to jump on something, it’s going to be gone before you have a second to think,” said Jim Mesveskas, director of company development for RE/MAX in Lavallette, Brick, Little Silver and Red Bank.
Several real estate agents said buyers say they are looking to get out of crowded areas because of the coronavirus pandemic, and sellers want to take advantage of record low mortgage rates to get into a larger place that can accommodate work-at-home changes.
“After 9/11, the same thing happened,” said Maria Rizzo, an agent who covers Monmouth and Ocean Counties for Coldwell Banker Rivera Realty in Forked River. “We had everybody fleeing the busy areas and coming to the other places where there is a little more space. A lot of my buyers don’t want to be in townhomes. They want the space around them.”
But hopeful buyers are faced with few choices in Shore communities and other parts of the state.
“High traffic, low inventory, bidding wars,” Rizzo said.
In Ocean County, the inventory of homes for sale in June was down 55.9% compared to the same period a year ago, according to New Jersey Realtors, an industry group.
Over the same time period, inventory was down 32.7% in Cape May County, 43.2% in Monmouth County and 20.2% in Atlantic County.
Home prices are reflecting the lack of supply, with the median sales price up 19% compared to last June 2019 in Atlantic County, 36.7% in Cape May County, 9.2% in Monmouth County and 7.9% in Ocean County.
Then there are historically low mortgage rates.
The Mortgage Bankers Association said buying activity in the last week alone was 21% higher than a year ago, and for the past 10 weeks, activity has outpaced year-ago levels.
The average rate for 30-year fixed mortgage is 3.14 percent this week, according to BankRate.com.
Memories of Superstorm Sandy’s damage and threats of future hurricanes aren’t putting a damper on the attraction of the Shore, agents said.
“I don’t even think it is on people’s minds. It seems like ages ago,” said Caroline Gosselin is the team leader of Gosselin Group for Prominent Properties Sotheby’s International Realty in Short Hills. “There is no talk or trepidation related to Sandy among my clients,” she said of her buyers who are interested in Shore properties.
BIDDING WARS, FAST SALES
Agents said there are several reasons why sales are skyrocketing right now.
The pandemic may have slowed business in the early spring, they said, but the realities of coronavirus shutdowns and the ability to work at home has changed where people are willing to live.
Some people rode out the pandemic in Shore homes and decided that’s where they wanted to stay, said Allan Dechart, a past president of New Jersey Realtors who works in Avalon, Stone Harbor and Sea Isle City.
He said his greatest number of clients are from the Philadelphia area, but others are from New York City or North Jersey, and bidding wars are the norm.
“When you see a property you like, we tell them you need to make a move now,” Dechart said. “Some people think it’s B.S. or a sales pitch but it’s no lie. Especially in today’s world, buyers are looking online and once something comes on the market, bang! It’s over so fast.”
And then there are the prices. Not only are sellers listing homes at higher prices than usual, buyers, afraid they will lose a home, are willing to pay more so they can put forth the strongest possible offer.
“We’ve had some agents with homes going $30,000, $40,000, $50,000 over the asking price,” Mesveskas said.
He said he’s seeing houses with 20 to 25 showings in the first 24 hours, and because of the coronavirus distancing guidelines, there are lines of people waiting to get a look at a property before it’s gone.
Rizzo said newly listed properties are in hot demand.
“The cars are lined up and as soon as an agent comes out of a home, another comes in with a new client,” Rizzo said. “You can spend a lot of time just waiting.”
SELLING WITHOUT A LISTING
The market is so hot, real estate agents said buyers are being proactive, trying to sniff out homes that may soon be for sale but are not yet listed.
That’s how Jodi Topitz, an interior designer whose primary home is in Branchburg, sold her second home in Beach Haven.
After losing her husband Kenneth Spinner to cancer 18 months ago, Topitz decided it was too hard to keep the home, known locally for its red railings that were installed by the couple and its roof deck with 360-degree views.
“The beach house meant a lot to us,” Topitz said. “We put so much love into the house and when he passed away, it was too much too painful to keep.”
She said she hoped a family would buy it and “pick up the love vibe” and create their own memories.
Topitz hired real estate agent Gosselin to handle the sale, but the home never went on the market.
While a contractor was getting the home ready for sale, a passerby left a note, asking if the home was for sale, Gosselin said.
In just two hours, the buyer purchased the house for the full asking price of $1.399 million, and the deal closed in three weeks.
Topitz said she knew she could probably start a bidding war on her home by listing it, but she didn’t want to go through the drama.
“That morning when the lady left the note, I woke up with the heaviness of having to get rid of the house and I said out loud, ‘Kenneth, please sell this house for me today,’” Topitz said. “Hours later, it was done.”
SALES BEYOND THE SHORE
The hot market isn’t limited to the Shore, agents said.
“We are seeing this up and down New Jersey, from the Gold Coast to the Shore and westward along the train lines,” said Gosselin, who works mostly in Essex, Morris and Union Counties. “It has been a feeding frenzy for a couple of months – even during the lockdown.”
She said homes are selling on average with four to six offers, leading to bidding wars.
For example, she sold a renovated small three-bedroom home in Essex County that was walking distance to the train. She couldn’t hold a traditional open house because of the coronavirus, but she booked non-stop 30-minute appointments that lasted from 9 a.m. to 7 p.m. on a Friday, Saturday and Sunday.
The next day, there were 20 offers on the house, which sold for a whopping $150,000 over the asking price, she said.
HOW LONG WILL IT LAST?
Lots about the future is uncertain because of the pandemic, but experts say homeowners are looking at their properties — and their priorities — differently.
Agents said they expected a bump in sales when the state started to reopen, but many said the market is even hotter than they anticipated.
It’s going to continue, Mesveskas said, because there is still a large demand that hasn’t yet been met.
“As long as interest rates stay low, the demand will be higher than average,” he said. “I do think it will be six to eight months before we see not a dip, but a correction, to pull the industry back to where it would normally be at that time.”
Rizzo said her contracts for July are up over June, though it may be starting to level out.
But that could just be because there are more buyers than homes available.
The work-at-home trend is going to persist for some time, and the virus continues to impact how people think about their lives.
“I have some saying everything is going wrong, so it’s time for us to do what we should have done a long time ago,” Rizzo said.
And the aftermath of the virus may have a lasting impact on homebuyers going forward.
“The pandemic scared the living hell out of New York City dwellers – especially those with kids. They felt vulnerable, confined and wanted out,” Gosselin said. “Home has taken on a whole new meaning.”
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Karin Price Mueller may be reached at [email protected].