How first-time buyers survived months of house-hunting in NJ’s frenzied real estate market

Why millennials aren’t buying homes

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First-time homebuyers Lauren Durfee and Sal Corso spent weeks holed up in a tiny hotel room with their two cats and one dog, waiting to move into their new townhouse in Eatontown, when the project got delayed.

Durfee began to have doubts. The couple had been house-hunting for months, ready to plant roots and get married. But their time in the hotel was running out and they had nowhere else to turn.

“We absolutely love (the home),” Durfee said. “But there are so many times where I’m, like, ‘Is it worth it at this point?’ But we also can’t step away. We’re going to start over and do this whole process again?”

Durfee and Corso are among the first-time buyers elbowing their way through Shore’s frenzied real estate market to try to find a home, potentially swinging the fortunes of Monmouth and Ocean County towns that spent recent decades in the shadows of Jersey City, Hoboken, Manhattan and Philadelphia.

But the journey hasn’t been seamless. First-time buyers are encountering slim pickings; sellers who are asking them to waive protections like appraisals and inspections; and competition from investors who are swooping in to buy homes with cash.

a man and a woman sitting at a table: Lauren Durfee and her fiance Sal Corso are shown in their new Eatontown home Thursday, August 12, 2021. The couple wanted to move from New York City to Monmouth County during the pandemic, but it wasn't that simple for the first-time homebuyers. They lost out bidding on two houses. And they waited for their new townhouse to be completed. © Thomas P. Costello Lauren Durfee and her fiance Sal Corso are shown in their new Eatontown home Thursday, August 12, 2021. The couple wanted to move from New York City to Monmouth County during the pandemic, but it wasn’t that simple for the first-time homebuyers. They lost out bidding on two houses. And they waited for their new townhouse to be completed.

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The process can take an emotional toll. And some real estate observers worry that first-time homebuyers — young people trying to put down stakes and build wealth — are being pushed out of the market.

“The danger is you’ve taken the traditional real estate sales market and you’ve turned it into something else,” said Drew Anlas, division manager with NJ Lenders Corp., a mortgage banker based in Shrewsbury. “That’s what I’m trying to get a grip on.”

Trisha Hershberger standing in a kitchen: Lauren Durfee and her fiance Sal Corso are shown in their new Eatontown home Thursday, August 12, 2021. The couple wanted to move from New York City to Monmouth County during the pandemic, but it wasn't that simple for the first-time homebuyers. They lost out bidding on two houses. And they waited for their new townhouse to be completed. © Thomas P. Costello Lauren Durfee and her fiance Sal Corso are shown in their new Eatontown home Thursday, August 12, 2021. The couple wanted to move from New York City to Monmouth County during the pandemic, but it wasn’t that simple for the first-time homebuyers. They lost out bidding on two houses. And they waited for their new townhouse to be completed. On the hunt

Durfee and Corso, both 28, work in technology. They were renting a one-bedroom condominium in Long Island City, New York, with their cats, Paddington and Heaven, and their dog, a Morkie named Cappuccino.

When the pandemic hit in March 2020, they were quarantined in their 600-square-foot home, working all day side-by-side, and they quickly decided they needed more space.

They set their sights on Monmouth County, which had plenty to offer: beaches, restaurants; prices more affordable than, say, Connecticut or Long Island; and an easy commute to their respective offices, Durfee in Jersey City and Corso in Manhattan.

They donned their masks and went house hunting, joining a wave of their cohorts in the millennial generation who moved from Manhattan and North Jersey to the Shore in search of safety from the pandemic.

They were aided by record-low mortgage rates and technology that allowed them to skip the commute and work from home.

The migration picked up speed in 2021. 

Monmouth County had 3,409 single-family home sales through the first six months of 2021, up 19.4% compared with the same time last year. Ocean County had 4,307 single-family home sales during that time, up 16%, according to data from the New Jersey Association of Realtors, a trade group.

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Monmouth County housing prices are on the rise

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    Buyers snapped up homes quickly. Ocean County, for example, saw its inventory plummet from a 6.2-month supply before the pandemic to a 1.7-month supply in June, the Realtors group said, believed to be a record low.

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    First-time buyers, however, have been at a disadvantage. They typically enter the market with less money than other buyers, who can use cash or profits from the sale of an existing home to bolster their offer, said Samara O’Neill, a broker with Porter Plus Realty in Jackson.

    Nationwide, the share of homes purchased by first-time buyers fell from 33% in 2019 to 31% in 2020, the lowest since 1987, according to a report by the National Association of Realtors.

    “You’re coming into a market with cash offers, bidding wars and forgone inspections,” said Samara O’Neill, a broker with Porter Plus Realty in Jackson. “That’s the new normal.”

    Ocean County home prices soar

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    At first, Durfee and Corso’s search seemed easy. They made an offer in November on a house in the Cottage Gate development in Atlantic Highlands that was accepted. They were scheduled to close in January.

    They gave notice to their landlord in Long Island City. And Durfee’s company paid for them to keep their belongings in storage and move to an Airbnb in the Navesink section of Middletown through mid-May.

    But then things went off kilter. The appraisal for the house, done online due to the pandemic, came in below their offer, meaning they couldn’t get a mortgage to cover the entire price.

    A second appraisal came back closer to their offer, reviving the deal. But the sellers made the closing contingent on finding a new house. Durfee and Corso decided it was too risky to wait and kept looking.

    They looked at older homes in Shrewsbury, Little Silver and Fair Haven, but worried the homes would require too much maintenance. In March, Durfee stumbled on new townhouses being built in Eatontown that looked sleek and, priced at less than $500,000, were within their range.

    Durfee and Corso bid on a unit and got it. They planned to close May 15, just when their Airbnb was ending. Durfee and Corso were excited.

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    “We were good to go,” Durfee said.

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    Construction supplies dry up

    They drove by their new home every other week to take a look. But at the end of April, they noticed the work began to slow down. And they began trading what they described as increasingly tense messages with the project’s real estate agent; the closing date kept getting pushed back.

    The development, built by Lakeview Development Townhomes LLC based in Freehold, ran into delays, said Michele Neidle, the project’s real estate agent with Long and Foster.

    “COVID,” Neidle told the Asbury Park Press. “Supplies have been very slow coming in. And the town was shorthanded. People got sick, so it slowed us down.”

    May 15 came and went. Durfee, Corso and their pets moved from the Airbnb to a 250-square-foot room at the Blue Bay Inn in Atlantic Highlands, which at $3,650 a month, cost more than their Long Island City condominium.

    Their offices were still closed due to the pandemic, so the couple worked in close quarters, talking over each other during meetings, unsure how long the holding pattern would last. They needed to buy furniture. They needed to plan their wedding. And the closing date kept moving. To June 1, June 15, June 30.

    “It was just all very, very stressful.” Corso said.

    Durfee and Corso could see the contractors making progress. But they needed to leave the Blue Bay Inn by July 15.

    They searched for more temporary housing, but the Jersey Shore was booked for the summer — before catching a break. A friend of Durfee’s was going to be out of town and offered the couple her apartment for 10 days.

    Eatontown wants young people 

    Out of options, Durfee and Corso reached out to Eatontown Mayor Anthony Talerico to try to speed up the inspection process.

    Talerico stepped in, saying the prospect of young families moving to Eatontown is a welcome sight for the borough. Since Fort Monmouth closed in 2011, Eatontown’s school enrollment has declined by more than 10%, according to state figures.

    “The town is seeing a lot of younger people,” Talerico said. “Remember, we lost a lot of families during (the closing of) Fort Monmouth. We definitely could use more kids in our school system.”

    Real estate agents and lenders, however, say many first-time buyers continue to be stuck in place, sometimes living at home with their parents, other times renting, while they wait for the housing market to slow down.

    Kathi Bernadino Dobin, a real estate agent with Burke and Manna, said she recently sold an entry-level home in Long Branch for $245,000 in cash to an investor who had bought 12 homes that he planned to rent out.

    “The single-family home prices have gone way up,” said Anlas from NJ Lenders. “Houses that used to be $300,000 for first-time buyers are now going for $425,000 and $450,000.”

    “How do you re-engage the first-time buyer when you’ve basically priced them out of the market?”

    a large brick building with grass in front of a house: Lauren Durfee and her fiance Sal Corso's new Eatontown home shown Thursday, August 12, 2021. The couple wanted to move from New York City to Monmouth County during the pandemic, but it wasn't that simple for the first-time homebuyers. They lost out bidding on two houses. And they waited for their new townhouse to be completed. © Thomas P. Costello Lauren Durfee and her fiance Sal Corso’s new Eatontown home shown Thursday, August 12, 2021. The couple wanted to move from New York City to Monmouth County during the pandemic, but it wasn’t that simple for the first-time homebuyers. They lost out bidding on two houses. And they waited for their new townhouse to be completed.

    Durfee and Corso moved into their new townhouse July 24, 10 months after starting their search. 

    They have full-time jobs that allowed them to work from home. They have an employer who helped defray their moving costs. And they survived the stress, which bodes well for their marriage.

    They met a new neighbor, too.

    “She said she’s been in a hotel for 109 days,” Durfee said. “So we’re not the only ones.”

    Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.

    This article originally appeared on Asbury Park Press: How first-time buyers survived months of house-hunting in NJ’s frenzied real estate market

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