The COVID-19 pandemic has many city dwellers looking for more space to work from home and live outside. They are finding it in Verona.
August 2020 data on Verona real estate shows that we are clearly in a seller’s market. Houses are going to contract in less than half the time they did in August 2019, and selling for higher prices after getting multiple bids. Brokers are scrambling to get enough houses to list: The absorption rate–a measure of how long it would take for all homes on the market to sell–has fallen to 2.26 in Verona, from 3.44 last year. “The drop is significant,” says Josh Jacobs, the broker of record at Hearth Realty Group.
For Jacobs, the state of the market is summed up in one of his recent listings, on Mountainview Road in the Forest section of town. The home, which was last sold two years ago for $640,000, was recently resold and closed this past week for $784,000. “That was $144,000 higher than two years ago and $105,000 higher than what I listed it for,” Jacobs says. “The whole area is seeing similar market activity.”
Coldwell Banker agent Lynne Mortimer concurs. “It is unprecedented for sure,” she says. “None of us saw it coming.” Back in April, she notes, realtors suddenly found themselves unable to hold open houses or even show listings in person. The year looked as if it would be a wash. But as more potential buyers began to envision working from home for a long time, living outside a city began to seem more plausible.
Suburbs with train stations are the focus of many home searches, Mortimer notes. Verona isn’t one of them, but our proximity to Montclair, and bidding wars there, have caused many buyers to look further west. “The Afterglow is on fire,” she says of the Verona neighborhood that borders on Montclair. “Almost everything there listing in the sevens [$700,000] is going under contract in the eights,” Mortimer adds.
The only thing that seems to be holding Verona back is a lack of inventory. “We’re in desperate need of four-bedroom homes now,” says Lauren Orsini, who leads a team at Berkshire Hathaway Home Services New Jersey Properties. “People need an extra room to work from.”
When sellers tell Orsini that they are thinking of listing in the future, she asks if she can come over now to make a list of what they might need to do to get ready for listing. If their time horizon changes, Orsini has contractors, cleaners and others who can get a house ready for listing in as little as a week. “We even have college kids who can help box,” she says.
Orsini says that Verona’s walkability to schools, recreation and restaurants appeals to potential buyers living and working in New York City, Jersey City and Hoboken. “You can walk from any corner of Verona to the avenue,” she says. Orsini is also seeing another category: Couples who can’t have a wedding because of the pandemic and are buying a house instead.
Hearth Realty’s Jacobs notes that buyers are essentially buying homes in “as is” condition, waiving inspections, waiving appraisals and offering flexible closing terms. Mortimer concurs and adds that a 20% down payment may no longer be enough. “Forty percent or even 50% down alleviates issues with appraisals,” she says. Mortimer believes that current Verona market conditions are likely to last well into next year, and Orsini agrees.
“Buyers are saying, ‘I might never have to go back in the office five days a week’,” she says. “That is letting them consider a slightly longer commute.”