Tales of a Seasoned Broker
After reading repeated articles in a few of the country’s most respected news sources reporting housing stock dropping to all time lows, I wanted to more clearly understand the context as to how exactly this “low inventory” phenomena was affecting our hyper local market. Before we jump into the numbers, though, let’s remind ourselves how we have arrived at this situation in the first place. Post Covid lockdown, a large segment of the nation’s population that either resided in cities or in rentals made a major push to secure themselves a single family home in the suburban neighborhoods of America. This resulted in the never before seen “line around the block” at our local open houses, where by the end of the day multiple offers would come in with many above asking price. This buying frenzy really has not let up until just recently, due to a second phenomenon that has been named the “Golden Handcuffs.” The numbers are staggering when you consider their ramifications. Approximately 85% of homes in the US have loans on them with a rate that is in the 3% range or lower. The handcuffs are of course the low mortgage rate handcuffing people to their existing homes. The current interest rate decreases one’s purchasing power almost in half when comparing monthly payments v.s sale price. With such decreased supply the demand, it seems, is finally getting the message and starting to let up. When comparing activity for the month of July last year over the same time period with the month of July this year the numbers are striking. There are less than half the amount of homes on the market in Teaneck, Bergenfield and New Milford and the amount of homes that have sold over this time period is close to 40% less. All eyes are now on the Fed who holds the key, it seems, to release the real estate market from its handcuffs.
Nechama Polak is the Broker of Record and Owner of V&N Group LLC located at 1401 Palisade Avenue in Teaneck, New Jersey. Send your thoughts and comments to firstname.lastname@example.org or call 201 826 8809