The Resources Report: 1st Quarter 2020 Market Report

Thomas McCormack Senior Partner - Broker tom@resourcesrealestate.com

Even in times of change and uncertainty, context is helpful. In this moment of constant daily change in the economy, the public health situation and the world as we know it, it seems hardly meaningful to discuss business that occurred “B.C.” (Before Covid) and yet, even in times of change and uncertainty, context is helpful. Market forces that were at work prior to the shutdown do not entirely disappear even while it feels like everything has shifted. With that preface, we present our market report for 1Q2020. While 2019 set new records state-wide for single-family unit sales Monmouth County did not with ²/ ³ of the surveyed municipalities showing fewer sales than the year previous. In first quarter 2020 this situation improved with about half of towns showing flat or increased sales numbers; overall county-wide sales were up by over 4% in both units and average sale price for single-family homes. The increased demand seemed to indicate that our Spring market would be robust especially as inventory was on the rise. While low inventory was at issue in much of the state, we saw total available homes almost twice that of a year ago when many local professionals surmised that sales were down because there were not enough homes to sell. How this will play out throughout 2020 is yet to be seen with many sellers pulling their house from the rotation and many buyers observing the quarantine. The shift may favor buyers, at least in the short term, particularly if negotiating with sellers under pressure to sell. While some buyers previously in the market may drop out due to a change in financial ability, others may choose to enter: changing markets mean changing players. If transitioning to a buyer’s market, investors will likely enter en masse. Historically low mortgage interest rates will also promote a stronger buyer push. The new market will favor some property types (e.g. spacious yards capable of both fun & social distancing) over others (e.g. high density developments) and pricing will -- as always -- be a key factor. One thing is certain: despite all the components of “the new normal”, real estate transactions will continue... Facetime inspections, curbside closings and all. Although initially there is an expectation of downward pressure on property values, this is likely to be temporary -- albeit it may take a year or two to fully rebound. There is also the prospect of a market surge as shelter-in-place restrictions lighten and more parts of our dayto-day world reopen. Whether this is a surge due to the changing conditions or simply a delayed “Spring” market may be hard to gauge but we expect renewed market vigor to come by midSummer or perhaps Fall. Of course, no one has a crystal ball and all will depend on how COVID-19 cases, treatments and vaccines progress. As always, your home and your market is specific and as such requires specific attention. Proper pricing, market preparation and marketing tools to facilitate the new virtual sales process are key and we are here to help with all of the above as well as observe safety protocols throughout. Questions? Whether you are looking to buy or sell, we’ve got answers. Please contact us and let us know how we can help. resourcesrealestate.com Cover image, 88-2 Portland Road, Highlands, new constrution with amazing views, mobile website: bit.ly/88-2Portland