#FocusDisruption is a collaboration of all the media outlets within Montclair State’s School of Communication and Media. Our goal is to report stories that highlight the effects or disruption of the last two years and the solutions that have come out of it. All aspects of day-to-day life have been altered but we will be primarily focusing on how mental health, education and the workplace have changed.
The great migration is a trend that has inspired the younger generation to take action and uproot themselves and their lives for the better. It can mean quitting their job in search of something more fulfilling or packing their belongings in a car and moving 1,000 miles away. But how can college students and recent graduates prepare themselves to enter an extremely disrupted world of real estate?
In 2020, the real estate market was shifted in an unprecedented way. Some would say the market even resembled that of 2008, before the economic crash. As the threat of the coronavirus (COVID-19) spread worldwide, people found themselves deserting their homes in crowded cities and moving back to the suburbs with their families. College kids all across the United States were forced to leave half-empty dorms and finish their semester back at home.
As more and more people left the cities, the demand for real estate was high. And at the same time, due to high unemployment and incentives from the government, real estate loan rates were low, therefore giving even more of an incentive for people who hadn’t invested in property to get started.
Anthony Petruzziello, a sales manager for Cross Country Mortgage Company, has been in the business for over 20 years. He’s seen his business and the market in general shift significantly over the last two years.
“We’ve seen a lot of activity [in the market],” Petruzziello said. “All-time highs in terms of transactions, for purchases, as well as refinances. Interest rates dropped significantly during [COVID-19]. So even if you weren’t moving and you were living in your home, it was a benefit for you to take a look at your existing mortgage, refinance and save some money.”
The demand for houses was high, causing a surge in inventory, prices and purchases. This level of activity was the perfect storm for sellers, but not so much for buyers, who now had to constantly compete with others to even get a response on their house offers.
Even the rental market has completely shifted. That is where many young students and grads find themselves landing and it’s oftentimes their first independent purchase.
Due to homeowner loan rates doubling from 2.75% in 2020 to almost 5.8% now in 2022, according to Petruzziello, many people aren’t looking to move out of their recently purchased or refinanced homes. Therefore, renters looking to buy are staying in their rentals and lowering the inventory of new rentals for young people looking to start their journey in real estate.
Giovanni “John” Apicella is a real estate agent with Keller Williams and a Montclair State University 2020 graduate. Before the pandemic, he too was getting ready to enter the real estate market, but not as a consumer.
While finishing college, he took courses to get his real estate license. He encourages those who are interested in having their own license to follow that path as it can be helpful in the long run.
“After Montclair State, I was trying to figure it out,” Apicella said. “[The license] is a great thing to have. You could sell one house a year or do a few rentals [as a secondary income]. Then maybe you want to take it full-time and make it a career.”
Though starting in the business has not always been easy, the market shifted due to COVID-19 and the guidance from his family has helped him become successful. He mentions that not going at it alone helps one navigate this unstable climate.
“It can be daunting starting out,” Apicella said. “You don’t really know anything and it’s basically trial and error. Joining a team can be beneficial because they supply you with leads and they help you learn. But being young isn’t always a bad thing because [we] have advantages with marketing and social media. ”
For college students looking to move off campus as an upperclassman or recent graduates looking to take their next step into adulthood, setting yourself up financially and mentally for entering this crazy market is important.
“Credit is obviously important,” Petruzziello said. “You want to keep that [credit card] balance at 50% or less than the available [credit limit]. That’s going to help your credit score. The other thing is you want to make sure you don’t have a lot, a lot of things on your credit — not a lot of 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 possibly buying or renting your own home, due to how unstable the market is.
“If you can wait it out, save a little more, or maybe move in with family, you’ll be better off when it comes to purchasing [or renting],” Apicella said.
Moving forward, the best way to prepare yourself is by planning 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,” Petruzziello said. “Have an idea in terms of timing [and] where you want to be. It’s never too early to sit down with either a loan officer or a realtor. Just give them an idea as to what you’re looking to do.”
A strategy that may help young people looking to buy is one of the principles Anthony Laurita, broker and owner of United Real Estate North Jersey, believes in.
“I would be practical,” Laurita said. “I believe that first-time homebuyers should buy a multifamily house, if possible. So if you collect the rent while still living in a home that you own, that [will] suit your needs. A lot of people want top of the market right away. Know your place in the market and build toward that dream house. Let your real estate work for you, instead of you working for your real estate. If you learn how to do that, you’ll never have to save money for real estate; the house will do it for you.”