June 21, 2021
School’s Out – But Does it Matter?
For most students in New Jersey, this week marks the end of a school year that has been unlike any other. And in the past, this had a direct impact on home sales.
There was traditionally a bump-up in the number of homes that went under contract in the spring, and subsequently closed in July, June and August – in that order. This volume was attributed to the need for families to get moved in and settled before the new school year began in September.
Will this same buying pattern hold true in this semi-post-pandemic world? Like most questions about the residential real estate market that have been asked during the last year and a half, there is no clear-cut answer.
In some ways, it already has. More residential properties went into contract in March, April and May of this year than had in previous months. This is the same pre-pandemic pattern that we have been seeing for some time.
But are the dynamics the same? In other words, is “getting settled before school starts in September” the REAL reason that properties have been selling this spring? Or is it the ongoing increase in home prices and interest rates that is spurring on the buyers in this market?
What we’re seeing is this: buyers who are in the know understand that, in this market, they should buy sooner rather than later. More and more, homes are getting beyond the reach of entry-level buyers. The powerful punch of higher prices and higher finance costs are relegating more non-homeowners to the ranks of renters – and sadly, we think they may remain there for some time to come.
We will have to wait and see if this furious market activity abates in the fall when school is back in session (and hopefully remote learning is a distant memory.) Regardless of what happens, chances are we’ll be asking the same kinds of questions. Did the start of the school year have any bearing on the market? Or is it just crazy-low interest rates and climbing prices that are continuing to drive today’s real estate sales?
