Interview: Chris Wilhelm, Regional

( ) noted by Yardi Matrix, South Jersey’s affordability and strategic location along the Delaware Valley are slated to drive investment activity particularly in market-rate and affordable housing.

“We’re seeing an increase in market-rate multifamily rental projects, but we’re also seeing a lot more activity on affordable housing,” Kitchen & Associates Managing Principal Stephen Schoch told Invest:. “Part of the affordable housing increase is because it’s considered infrastructure. I’m seeing many more opportunities and developers interested in doing things in Southern New Jersey because they know more resources are likely coming to the table and because of the land price. South Jersey is still the bargain of the East Coast and that is an incentive to do affordable housing. There is also a greater sense of urgency on the part of the individual municipalities to make good on their promises on affordable housing that have stalled during the pandemic.”

Residential The COVID-led housing frenzy continues to make its way through the South Jersey market. Double-digit growth in prices and record inventory lows are constant from Burlington to Cape May counties. Demand for homes continues to outpace inventory more than a year after the onset of the pandemic with little reprieve expected in the near future as builders contend with construction challenges that are passed down to consumers.

More than 6,900 home sales were closed in May 2021 statewide, posting a 26.6% increase year-overyear, according to New Jersey Realtors®. Similarly, the single-family median sales price increased 24.3% to $435,000 with an average two months of supply available statewide.

Affordability continues to permeate throughout the South Jersey market with counties such as Camden, Gloucester, and Burlington reporting prices well below the rising statewide figures. Buyers, however, must heed calls to move quickly in pursuit of a home in the current market as inventory levels throughout South Jersey remain much lower than statewide figures.

Considered a suburb of Philadelphia, the Camden County median single-family sales price stands at approximately $267,000 as of May 2021. That is a 27.5% increase year-over-year with a supply of inventory whittled to an average of 1.1 months, according to New Jersey Realtors®. Similar dynamics are present in Gloucester County as median single-family sales prices hit $265,000 with a 20.5% price increase year-over-year and 1.3 months of supply of inventory. Chris Wilhelm

Regional Vice President Gateway Mortgage

How does the mortgage landscape compare to prepandemic levels?

It’s very active. The purchase market continues to be red-hot. The first time Gateway Mortgage had a billion dollars in a month was in April, right after the pandemic started gaining traction. In 2020, we had our best year ever, going from $7.7 billion in 2019 to $11.3 billion as a company. The challenge for the housing market is the lack of inventory. HousingWire recently reported that if everyone put their house on the market, there would still not be enough housing. The lack of new construction over the last 10 years has created the lack of inventory in certain markets. On the refinancing side of the mortgage landscape, there are still people out there who have not yet refinanced their own mortgage.

What key factors are you paying attention to?

The Federal Housing Administration (FHA) is a government insured loan, which allows for 3.5% down, with several guidelines geared toward first-time buyers. As an example, on an FHA loan, you can receive a gift for the entire down payment as closing costs and the seller credit is up to 6% versus conventional with 3% down, and seller credit capped at 3%. Under the FHA mortgage, the monthly mortgage insurance is paid for the life of the loan; under a conventional loan, you are required to carry the insurance until you reach sufficient equity (78% loan to value). There have been discussions within HUD to bring the monthly insurances back to a certain loan to value, to reduce the overall costs to FHA borrowers over the life of the loan.

The other key factor is the appraisal. Fannie Mae and Freddie Mac have been building a database of appraisal information, along with a scoring system for appraisals, to enhance the online decision engines. We’re actually receiving “Appraisal Waivers,” which means an inspection of the property is not required by a licensed appraiser. That cuts down on the borrower’s closing costs (appraisals range from $450.00 to $550.00). This single piece of the process can take the process to close from four-six weeks to three-four weeks.