Real Estate Activity Slows Due to Pandemic

On May 1, 2020

New Jersey Realtors housing data for March confirms the market has taken a hit due to pandemic restrictions in the state, but the true picture of the impact likely won’t be clear until the April and May data becomes available.

“When the restrictions began to be implemented in the beginning of March, there was still a lot of business in the pipeline,” said New Jersey Realtors Chief Executive Officer Jarrod Grasso. “You can tell from the data that this is not a typical March when we normally begin to see the spring selling season kick off.”

In the entire New Jersey market, new listings are down 28.3 percent over March 2019. For comparison, March 2020 had 12,956 new listings and March 2019 had 18,073. March pending sales were down 11.1 percent over last year and closed sales were down 5 percent, the difference of 427 sales.

In a member poll conducted in March, more than half of New Jersey Realtors said Covid-19 posed a large threat to their personal financial situation. Six-in-ten members said housing prices are about the same as a year ago, with only 16 percent saying prices are higher, a change in opinion from previous waves of the survey. While the hard data shows that sales prices have risen, Realtors on the ground are reporting prices have not immediately retreated in the shadow of the crisis.

A broad majority of members have indicated they have had clients hold off on buying or selling because of the outbreak, but prior to the pandemic, the housing market was strong. Year-to-date pending sales were up 2.8 percent, a good indication of how much business was in the pipeline prior to the state’s stay-home orders. The median sales price for March 2020 was $312,500, up 11.6 percent over last March, and a good gauge that prices should not suffer too much once the economy fully reopens.

Inventory has been a top-of-mind concern for the past few years and the pandemic did no favors to that number. Just 37,041 homes were for sale in March 2020, down 28.9 percent, as March 2019 had 52,116 homes for sale. When polled, 58 percent of members saw inventory as a serious or very serious problem.

On March 20, Gov. Phil Murphy clarified Executive Order 107, saying, “Realtors can operate and show houses to prospective buyers on a 1-on-1 basis or to immediate families. There is still a prohibition on open houses.” Since then, New Jersey Realtors has urged members to exercise extreme caution with clients and encourage the use of virtual tools, masks, and social distancing.

“There are still buyers who need to buy and sellers who need to sell,” said 2020 New Jersey Realtors President Angela Sicoli. “There are plenty of clients who are in a position where they need to complete a transaction for financial, health, or familial reasons that either existed before the pandemic or arose because of it. Our members are safely doing their best to serve those who need that service right now.”

Transactions have continued to close following social distancing recommendations as agents and their industry partners find new and innovative ways to serve clients in need during a difficult time.

“We continue to urge agents and clients to use any virtual tools available to them,” said Sicoli. “But, especially right now, the importance of ‘home’ cannot be overstated.”

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