March 5, 2020
“Why did you choose Garden State Real Estate Academy to get a New Jersey Real Estate license,” we asked students at our new Robbinsville real estate school recently. The number one answer was, “We want a career where we are in control of our own destiny.”
Then it was the students’ turn. And the number one question they asked was, “Has the real estate market run out of steam, or do you think it is still strong?
We believe the New Jersey real estate market will remain strong in 2020 and that there is never a better time than right now to get a NJ real estate license, because the spring market is about to begin.
The Spring Real Estate Market.
What—or more particularly, when is the spring market? For decades, we have considered the spring real estate market to be late March to late May. Just a few years ago, it was not unusual for REALTORS® to report that a third of their annual volume came from that eight-week period.
Not any more!
The market has become much more evenly spread throughout the year and gradually, the “spring market” has been getting earlier. For the last 3-4 years, February has been a strong sales month and according to a National Association of REALTORS® study, in 2019, the numbers of people looking for homes in January lagged only one percent behind those in February.
Yes, January is the new spring!
Where is the market now?
Coming off a strong 2019, the new year had a somewhat of a mixed start—depending on where you lived. Prices and sales in the Western United States saw a real dip in January. This could simply be an understandable “breather” after several years of crazy sales and price increases. Those sales brought down the overall national statistics, but our area in the Greater Philadelphia market remained strong.
One of the problems has been inventory. There is still a shortage of good homes that are priced right. The NAR report showed an average increase in median home sales prices of 6.8% in January, compared to January 2019.
Where to from here?
All the indicators are flashing green for the spring market in 2020 in the NJ/PA area. Mortgage interest rates are still at historic lows—between 3.5% and 4%. As stated above, the glut of homes for sale that has kept prices down for much of this decade is gone. The basic law of supply and demand proves that when there is a shortage of a commodity in demand, prices will rise. And they have risen in every South Jersey county for every one of the last six months, compared to the same period a year earlier.
When we give sales training tips to students who come to our Garden State as their real estate license school, we point out that there will always be a core market of people who need to buy houses because:
- People are getting married.
- People are getting divorced.
- People are having babies and need bigger homes.
- People are becoming empty nesters and need to downsize their homes.
- People must move for job transfers.
- People pass away and their heirs must sell the decedent’s properties.
- Investors see the value in owning rental properties.
The NAR Profile of Home Buyers and Sellers late last year showed that one-third of all home purchases in 2019 were made by first-time homebuyers.
With employment strong, interest rates low and new housing starts rapidly putting sparkling new homes on the market at a record pace, the 2020 spring market looks extremely promising. The one concern is what will happen with the Coronavirus crisis. We saw the stock market plummet 4,000 points in just four days last week, wiping out billions of dollars from people’s savings and retirement accounts. That could affect their ability to come up with down payments for a new home. It certainly could cause a general uncertainty that makes potential buyers defer their purchases until the pandemic has been resolved and the financial markets have stabilized.
If you or somebody you know if thinking of earning their real estate license—or of stepping up to become a broker—we’d love to hear from you!
David C. Forward is a licensed real estate broker and instructor and was first licensed as a Realtor® 31 years ago. During his career, David and his business partner sold more than 450 homes in South Jersey. He is now School Director of Garden Real Estate Academy, has won numerous awards for real estate sales, is a much-requested public speaker who has addressed audiences on six continents and is the author of 15 books. David can be reached at David@GSREacademy.com