2021 was a historic year for real estate. Pandemic boom towns brought remote workers out to the suburbs, starting bidding wars that brought home prices to record highs.
Our two main markets, Staten Island and The Jersey Shore, are attractive for buyers leaving New York City. Combine this trend with the lowest borrowing rates in a lifetime, add in constrained new construction inventory, and this past year was a roller coaster to say the least!
Across the US, new construction has not kept up with shrinking inventory. Supply constraints pushed up home prices nationwide. But each market is different, as we found when serving clients in the New York Metro area and the Jersey Shore area.
Year Over Year Comparison:
Home Sale Price
Nationally, home prices rose by nearly 20% in 2021 - the biggest year over year increase in about 45 years. In Staten Island and New Jersey, prices rose as well, though at a slower clip. Pandemic boomtowns were hot spots for remote workers, notably out west in cities like Boise, ID and Salt Lake City, UT. Boise saw the largest jump in the nation at 37%.
Staten Island home prices increased a healthy 8% year over year. The average home sold for $663,186 last month, up from $612,047 in December 2020. And while the percentage increase may be smaller than other metros, Staten Island was ranked in the top ten most expensive midsize counties in the US. Richmond County saw its biggest price increases in 2016-2017.
Monmouth and Ocean Counties enjoyed a 10% appreciation for home prices for 2021. The average sale price rose from $492,477 to $541,514. But home prices moved all over the map each month, proving more volatile than Staten Island.
Staten Island: $612,047 to $663,186 (+8%)
New Jersey: $492,477 to $541,514 (+10%)
Sold to List Price Ratio
Home buyers usually expect a discount and bid a few thousand dollars under list price. Thus, the sold-to-list price ratio is almost always under 100. The national average has stayed around 98.0% over the past few years before 2021. The national average has now cracked the ceiling and reached 100.3%.
In Monmouth/Ocean Counties, the SP/LP ratio broke 100 not once, but for the past 8 months straight. At its height of 103.2% in June, growth has slowed a bit to 101.0% in December. Staten Island’s SP/LP did rise consistently over the last 12 months, from 96.9% to a respectable 98.5%.
Staten Island: 96.9 to 98.5
New Jersey: 99.7 to 101.0
Inventory is the reason we won’t see a housing crash anytime soon. Explosive growth in home prices has many people speculating that we’ve entered a real estate bubble, but things are quite different this time around. There are currently fewer homes available than buyers who need them.
Staten Island and New Jersey both have marked inventory declines over the past year. Staten Island now has just 1,414 available homes, down 28% from the 1,975 listed one year ago. Any single county with less than 1,500 is a dramatic shortage. Much of the problem here is that sellers cannot afford to move because surrounding homes are also too expensive for them.
But New Jersey takes the cake here. Monmouth and Ocean Counties combined have just 2,514 homes for sale. Housing stock fell by 48% in this market from December 2020 - December 2021. It makes total sense that Jersey Shore homes sold for 103% of list price this summer. They sold like hotcakes!
Staten Island: 1,975 to 1,414 (-28%)
New Jersey: 4,821 to 2,514 (-48%)
Days on the Market
Another important marker of health is days on the market. The average Staten Island home now takes just 67 days to sell, down 25% in one year from 90 days. New York real estate closings are more tedious than most states, usually taking more than a month to go into contract. Historically speaking, 67 days is an impressively fast turn around.
The Jersey Shore, though, was the one to beat. The average home sold in only 30 days here, compared to 36 days one year ago. This means the typical Monmouth/Ocean County home gets listed, shown to buyers, and receives an offer accepted by the seller in less than a month. Some of our New Jersey listings sold in less than two weeks!
Staten Island: 90 to 67 (-25%)
New Jersey: 36 to 30 (-17%)
The Staten Island and New Jersey Shore are both suburban markets that share a proximity to the New York Metro area. But these two housing markets are very different too.
As a borough of New York City, Staten Island offered pandemic buyers close access to the city and a better quality of life during lockdowns. Prior to the pandemic, Staten Island enjoyed higher population growth than other NYC boroughs due to its relative affordability in the city. And also as part of the city, home values have enjoyed steady, robust growth over the past decade. Last year’s growth was less pronounced than in prior years.
The Jersey Shore, on the other hand, saw a huge boost from pandemic moves. Since the beginning of 2020 (right before lockdowns set in) Monmouth and Ocean Counties have seen a stunning 42% price increase in real estate. During the same time frame, Staten Island home prices grew just 14%.
One explanation for this would be the growth of remote work. Many Staten Islanders are city commuters, while the Jersey Shore has been more of a vacation spot. Enticed by low interest rates, larger yards, and beach access, buyer’s interest was really stoked during this time.