#FocusDisruption is a collaboration of all media within the Montclair State College of Communication and Media. Our goal is to report stories that highlight the impacts or upheavals of the past two years and the solutions that have resulted. All aspects of everyday life have changed, but we will focus primarily on how mental health, education and the workplace are changing.
The Great Migration is a trend that inspired the younger generation to take action and uproot themselves and their lives for the better. It could mean quitting their job in search of something more fulfilling or packing their belongings in a car and moving 1,000 miles. But how can college students and recent graduates prepare themselves to enter the highly turbulent world of real estate?
In 2020, the real estate market has transformed in an unprecedented way. Some would say the market was similar until 2008, before the economic crash. As the threat of Coronavirus (COVID-19) spreads across the world, people have found themselves abandoning their homes in crowded cities and returning to the suburbs with their families. College students across the United States have been forced to leave half-empty dorms and end the semester at home.
With more and more people leaving the cities, the demand for real estate was high. Meanwhile, due to high unemployment and incentives from the government, mortgage rates were low, giving more incentive to people who didn’t invest in real estate to start.
Anthony Petruziello, Director of Sales for Cross Country Mortgage Company, has been in business for more than 20 years. He has seen his business and the market in general transform dramatically over the past couple of years.
“We saw a lot of activity [in the market]Petrosillo said. “Unprecedented rises in terms of transactions, purchases and refinancing. Interest rates have fallen significantly during [COVID-19]. So even if you’re not moving around and you live in your own home, it would have been worthwhile for you to take a look at your current mortgage, refinance, and save some money.”
Demand for homes was high, causing inventory, prices and purchases to increase. This level of activity has been the perfect storm for sellers, but not so much for buyers, who now have to constantly compete with others for a response to their home offers.
Even the rental market has completely transformed. This is where many students and alumni find themselves landing, often as their first independent purchase.
As homeowner loan rates double from 2.75% in 2020 to nearly 5.8% in 2022, according to Petruzziello, many people aren’t looking to move out of their recently purchased or refinanced homes. Therefore, the tenants who are looking to buy are staying in their rentals and reducing the stock of new rents for the young people looking to start their journey in real estate.
Giovanni “John” Apicella is a real estate agent with Keller Williams and a graduate of Montclair State University 2020. Before the pandemic, he, too, was preparing to enter the real estate market, but not as a consumer.
While graduating from college, he took courses to get his real estate license. It encourages those interested in getting their own license to follow this path as it can be beneficial in the long run.
“After Montclair, I was trying to figure it out,” Abichela said. “[The license] A great thing to have. You can sell one house a year or do some rentals [as a secondary income]. Then maybe you want to take it full time and turn it into a career.”
Although starting a business was not always easy, the market has shifted due to COVID-19 and guidance from his family helped him become successful. He states that not doing this alone helps one get through this unstable climate.
“Getting started can be tough,” Abichela said. “You really don’t know anything and it’s basically trial and error. Joining a team can be beneficial because they provide you with potential clients and help you learn. But being young is not always a bad thing because [we] It has advantages with marketing and social media. “
For college students looking to move off campus as an undergraduate or recent graduate looking to take their next step into adulthood, it is important to prepare yourself financially and mentally to enter this crazy market.
“Clearly, credit is important,” Petroziello said. You want to keep that [credit card] 50% or less credit from available [credit limit]. This will help with your credit score. The other thing is that you want to make sure you don’t have too many, too many things on your balance — and not too much debt. And in this market [having] Flexibility in terms of where you want to live.”
Apicella echoes this statement and recommends saving as much money as possible before buying or renting your home, given how volatile the market can be.
“If you can wait, save a bit, or maybe move in with the family, you’ll be better off when it comes to buying. [or renting]Abichela said.
Going forward, the best way to prepare yourself is to plan ahead. The real estate market is always changing and knowing what you want and how to get there is only half the battle.
“The whole idea is that you have a game plan,” Petrosillo said. “I have an idea in terms of timing [and] where you want to be. It’s never too early to sit down with a loan officer or real estate broker. Just give them an idea of what you want to do.”
A strategy that might help young people looking to buy is one of the tenets of Anthony Loretta, Realtor and owner of United Real Estate North Jersey.
“I’ll be practical,” Loretta said. “I think first-time homebuyers should buy a multi-family home, if possible. So if you collect rent while you’re still living in a home you own, that’s [will] Fit your needs. Lots of people want to top the market right away. Know your place in the market and build towards this dream home. Let your property work for you, instead of you working on your property. If you learn how to do this, you will never have to save money to buy real estate; House will do it for you.”