DESIGNATED
REALTOR
®
ISSUE 1: February 2021
2020 Year-End Data Reveals Ever-Changing Market
SINGLE FAMILY
$380,000 +15.2% ADULT COMMUNITIES TOWNHOUSE –CONDO
$285,000 +7.5%
$232,650 +9.5%
MEDIAN SALES PRICE YEAR-TO-DATE
NJREALTOR.COM
I M P O R TA N T D AT E S & D E A D L I N E S
FEBRUARY
MARCH
APRIL
MAY
Black History Month
Women’s History Month
1
2
2
3
2
14
Groundhog Day
Daylight Saving Time Starts
12
17
14
27
Lunar New Year
NJ Realtors® Office Closed—Easter
9
Mother’s Day
13
28
12
Board of Directors Meeting
Holi
Mardi Gras
Cinco de Mayo
Ramadan Begins
Palm Sunday
16
5
12
28
NJ Realtors Office Closed—Presidents Day
National Association of Realtors® Virtual Legislative Meetings
4
Passover Begins
®
Orthodox Easter
Good Friday
St. Patrick’s Day
Valentine’s Day
15
April Fools’ Day
Eid al-Fitr
15
17
31
Tax Day
Ash Wednesday
NJ Realtors® Office Closed— Memorial Day
22
Earth Day
30
Orthodox Good Friday
WHAT’S BUZZING IN REAL ESTATE?
1
According to WalletHub, New Jersey is the seventh best state in the U.S. for families. They compared qualities that matter most to parents and their children such as housing affordability, education, unemployment rates, and more. Read more here.
2
New Jersey Realtors® launched its 2021 consumer advertising campaign in January, Plant Roots with a Realtor®. The campaign highlights the many different and wonderful areas in the Garden State: rural land, cities, beaches, suburbs, and everything in between.
3
5
In January, Houzz released its 2021 Kitchen Trends Survey and revealed most homeowners opt for significant changes to their floor plans during a kitchen renovation. More than two-infive homeowners are changing their kitchen and 38 percent are choosing an L-shaped layout. Read more here.
4
Realtor® Magazine reports there’s plenty of reason for optimism in the 2021 real estate industry. Mortgage rates will continue to be favorable and home sales are expected to rise by as much as 10 percent this year. Read more now.
Once the general public is vaccinated, more homes are expected to go up for sale, according to realtor.com®. Many of the sellers that held off from listing during the pandemic were more vulnerable baby boomers who did not want to risk getting sick through an open house. Read more here.
6
Freddie Mac’s Quarterly Forecast predicts mortgage rates will average 2.9 percent through the end of 2021. Total home sales in the fourth quarter of 2020 reached 7.6 million. Looking ahead, Freddie Mac forecasts 6.8 million home sales in the first quarter of 2021 and average 6.5 million for the full year.
7
The National Association of Realtors® launched a new fair housing simulation training platform to help Realtors® identify, prevent, and address discriminatory practices in their businesses. Experience realistic scenarios in the fictional town of Fairhaven—get started here.
Buyers’ Agents May Have Liability For Responses To OPRA Requests BY BARRY S. GOODMAN, ESQ., NEW JERSEY REALTORS® GENERAL COUNSEL
B
uyers’ agents must be aware there is potential Consumer Fraud Act (CFA) liability for buyers’ agents who obtain information on behalf of buyers that proves to be false or misleading. This includes responses to property document requests under the New Jersey Open Public Records Act (OPRA) that a buyers’ agent provides to buyers that turns out to include incorrect information.
A More Recent Example In a recent unpublished case, a buyer was interested in building on a property they were considering for purchase. The buyers’ agent obtained information from a municipal zoning officer concerning the square footage of a house that the buyer could build. However, the information provided by the zoning officer was wrong.
Buyers’ agents need to exercise caution when obtaining any information on behalf of their buyers.
After the closing, the buyers learned they could not build the house as planned and sued the broker under the CFA for treble damages and attorneys’ fees. The Appellate Division held that the Safe Harbor Provision was unavailable to the buyers’ agent because that provision only protects information obtained by a real estate licensee “by or on behalf of the seller.”
Background In 1997, the New Jersey Supreme Court held that, under the CFA, a real estate broker can be liable for innocently passing along misinformation from the seller to a buyer. This means a broker would be liable even if the broker or the seller did not know the information was false or misleading. If there is a violation of the CFA, a broker is liable automatically for treble damages and attorneys’ fees. The Safe Harbor Provision In response to the 1997 decision, New Jersey Realtors® worked for an exception to the CFA where the listing agent innocently passes along such information. Legislation was enacted limiting the liability under the CFA for real estate licensees under certain circumstances. The provision, known as the Safe Harbor Provision, became effective in 1999 and provides “there shall be no right of recovery of punitive damages, attorneys fees, or both” under the CFA if the real estate licensee communicates “any false, misleading or deceptive information provided to the real estate broker, brokersalesperson or salesperson, by or on behalf of the seller of real estate located in New Jersey,” as long as the real estate licensee satisfies the following two conditions. First, the licensee must not have any “actual knowledge of the false, misleading or deceptive character of the information.” Second, the licensee must have made “a reasonable and diligent inquiry to ascertain whether the information is of a false misleading or deceptive character.” Such a reasonable and diligent inquiry can include but is not limited to information from (1) a person licensed or certified by New Jersey; (2) a government official or employee; or (3) a properly used seller property condition disclosure statement.
In response to this decision, New Jersey Realtors® is seeking an amendment to the Safe Harbor Provision to clarify that it covers all brokers, whether they represent buyers and/or sellers. In the meantime, buyers’ agents should be very careful about obtaining information on behalf of buyers and may want to suggest buyers obtain information from the municipality or from other sources themselves rather than the agent obtaining that information for the buyers. A New OPRA Form for Members As a result of this issue, New Jersey Realtors® has prepared and posted a new form in the Forms Library, Open Public Records Act Notice To Buyers, which explains to buyers that they can obtain documents relating to a property under OPRA. It also includes examples of documents a buyer may want to request, such as open and closed permits, documents about variances, code citations, inspections, certificate of occupancy, a list of off-site conditions that may affect the value of the property and ordinances indicating if the property is in an air safety zone. The bottom line is that it is best to have the buyer obtain such documents but, if you obtain any information on behalf of a buyer, be very careful to ensure that it is accurate. Visit New Jersey Realtors® Forms Library at njrealtor.com/zipform. Currently there is legislation introduced in Senate and Assembly that will address this issue. If you have questions please contact Vice President of Government Affairs Douglas Tomson. Designated REALTOR® | February 2021 | 1
Introducing New Jersey Realtors® 2021 Consumer Advertising Campaign
BUY A HOME. GAIN A COMMUNITY. LEARN MORE AT NEWJERSEY.REALESTATE/ROOTS New Jersey Realtors® is excited to announce the launch of its 2021 consumer advertising campaign—Plant Roots with a Realtor®. From bustling city to stunning shore—no matter what you are looking for, a New Jersey Realtor® will guide you home. The campaign highlights the many different areas in New Jersey—rural, city, shore, and suburb and encourages buyers to use a local Realtor®. All of New Jersey Realtors® display and social media advertisements direct to newjersey.realestate/roots, New Jersey Realtors® consumerfocused website. On the site, consumers can use the Find a Realtor® tool, calculate the costs of purchasing a home, research housing market statistics, and discover why they should use a Realtor® for their home-buying process. You can also share the campaign on your social media accounts through Photofy—sign up at photofy.com/nar. Designated REALTOR® | February 2021 | 2
SPOTLIGHT ON NEW JERSEY: RURAL
SHORE
Even though New Jersey is known to be a densely populated state, seven of the 21 counties are deemed rural, according to the State of New Jersey. These counties are Sussex, Warren, Hunterdon, Cumberland, Salem, Atlantic, and Cape May. COVID-19 shutdowns in neighboring states pushed many residents to buy a home with more space and land—counties like Hunterdon County saw a 29.1 percent increase in closed sales in 2020, according to New Jersey Realtors® 2020 year-end data.
Sometimes putting your toes in the sand for vacation alone isn’t enough, but with 130 miles of coastline, buyers have a lot of options for a permanent residence or second homes. When COVID-19 travel restrictions forced many to cancel their out-of-state travel plans, many looked to the Jersey shore to spend their vacation. Others foresee having more flexible work schedules, which opens up more options such as moving closer to the coast rather than close to their workplace.
With 750,000 acres of land used for farm operations, no wonder New Jersey’s nickname is the Garden State. Whether buyers are looking for more space or access to fresh produce, New Jersey has them covered.
SUBURB
CITY
If your buyers have walkability or city life on their want list, New Jersey is home to major cities such as Hoboken, Princeton, Jersey City, Bayonne, and more. New Jersey’s also in a central location between New York City and Philadelphia, making it easy for residents to commute to city for work or pleasure.
New Jersey is a great place to raise a family, and according to Wallet Hub, New Jersey has one of the top education and child-care system in the country. New Jersey’s suburbs have something for everyone—whether you want to hop on a train to see a Broadway show, hit the beach on the weekend, or take a drive through the country. There is a county and town for every price point and preference, and every area in the state has something unique to offer potential buyers. Architectural Digest named Clinton, N.J. the sixth-best small town in America for its picturesque Main Street and famous landmark, the Red Mill Museum. Designated REALTOR® | February 2021 | 3
2020 Year-End Housing Data BY COLLEEN KING OLIVER
A
t the pandemic’s peak, the housing market slowed to a temporary crawl, but every month since then it’s been making up for lost time. The year-end data from 2020 upholds the anecdotal evidence of a very competitive, ever-changing market. Comparing all of 2020 to 2019, pending sales, closed sales, and the median sales price were all up at least 5 percent. Of those categories, median sales price saw the most growth with prices up 14 percent in 2020 to $350,000 for all properties. Other metrics, such as days on the market, number of homes for sale, and new listings were all down compared to 2019. New listings for 2020 were down 8.6 percent, compared to 2019, but closed
sales were up 5.5 percent for the whole year. Those numbers indicate a strong buyer demand throughout the state. Freddie Mac, the Federal Home Loan Mortgage Corporation, forecasts low mortgage interest rates are here to stay through the end of 2021 which will keep median sales prices and demand for homes on the uptick in the first quarter. According to Freddie Mac, as of Jan. 21, the 30-year fixed-rate mortgage is 2.77 percent. “2020 was a market unlike anything we’ve seen before,” said 2021 President Jeffrey Jones. “We saw our membership go from periods of extreme scarcity to booming business within a matter
Year-End Market Overview Pending Sales
Days On Market
2019
(118,727)
2019
(64)
2020
(130,868)
2020
(56)
+10.25%
–12.5%
Closed Sales
New Listings
2019
(117,412)
2019
(179,305)
2020
(123,925)
2020
(163,896)
+5.5%
–8.6%
Median Sales Price
Mortgage Rate
2019
($307,000)
2020
($350,000)
+14% Designated REALTOR® | February 2021 | 4
%
As of Jan. 21, 2021
2.77%
of weeks. We applaud our Realtors® adapting to change and continuing to help their clients even in the most challenging circumstances.” Closed sales were up 37.7 percent last month, with pending sales up 44.3 percent, with many buyers looking to start the new year in a new place. In December, the number of homes for sale was down 40.8 percent, with just 24,396 single family homes, townhouses and condos and adult community homes for sale. Inventory remains a high driving factor of today’s market. The percent change of closed sales in 2020 was highest in Hunterdon County with 1,857 closed sales in 2020, a 29.1
December 2020 Overview
percent increase over 2019. Sussex County came in second with 2,962 closed sales, a 22.9 percent increase over 2019. Cape May County came in third with 2,444 closed sales, a 17.6 percent increase over 2019. This data is reflective of clients looking for more space and not confined to long commutes due to the continuation of flexible work schedules. Market competitiveness will likely not subside until potential sellers around the state are ready to list and help offset the extreme inventory shortage. For the full reports, visit njrealtor.com/data.
Closed Sales in 2020 by County
Closed Sales 2019
(9,508)
2020
(13,089)
+37.7% Hunterdon County Pending Sales 2019 2020
Sussex County
(6,796) (9,805)
Cape May County
+44.3%
Number of Homes for Sale 2019
(41,188)
2020
(24,396)
–40.8%
29.1%
22.9%
17.6%
(1,857)
(2,962)
(2,444)
Designated REALTOR® | February 2021 | 5
DID YOU OR YOUR AGENTS RECEIVE
NJ REALTORS® 2020 CIRCLE OF EXCELLENCE SALES AWARD®? CLICK HERE FOR 2020 ADVERTISING PACKAGES, LOGOS, PRESS RELEASES, AND MORE!
Designated REALTOR® | February 2021 | 4
