REI INK

The REI Referral Network

Forming Relationships to Enhance Investment Strategies By: Monica Mansfield Now that the real estate investment industry is returning to normal following the COVID-19 pandemic, it is prudent for investors to begin establishing new relationships for acquisition and disposition strategies by enhancing their networks with real estate agents and brokers who have advanced access to the REO and foreclosure assets that are coming to market following mortgage forbearance. Suzanne Andresen, the Chief Revenue Officer at REI INK Magazine and one of the founders of the REI Referral Network, stated six months ago that the pandemic would create more opportunities for investors once we got back to business, and that investors need to be ready. She advised both investors and real estate agents to build their networks and relationships during the down time. By doing so, agents would already be familiar with what their investor clients were looking for and could make sure they got first glance at properties that match their portfolio strategies.  The Impact of Mortgage Forbearance Mortgage forbearance programs caused complications and uncertainty for real estate investors, property management companies, traditional and non-traditional lenders, service providers and renters. And these programs had a “trickle-up” effect on Wall Street. Some private money lenders quit lending temporarily and investors were having an increasingly difficult time sourcing new investments. Some investors have pivoted to Build to Rent initiatives. While this may provide a long-term higher ROI, it requires an extended timeframe to complete the developments. Adding complementary assets to the peripheral will help get the project producing revenues in the short term.  Regardless, for the most part, renters were still paying their rent on time. However, according to Federal Reserve research, as of August 2020, the monthly supply of houses dipped to 4.0. This means it would only take four months to sell all the homes currently listed for sale. This demand for more inventory alerted investors that they needed a paradigm shift. The Referral Network REI INK developed an online network to connect real estate investors, real estate agents/brokers and service providers. Although Andresen did not foresee the pandemic at the time, she did see a hole in the market that needed to be filled. Since its inception, the Referral Network has developed affiliations with national real estate companies, investment companies, asset management companies, lenders, and multiple service providers. Through these affiliations, the Referral Network was made available to thousands of real estate professionals seeking to create new relationships and a new way of doing business…a paradigm shift. And they took advantage of the oppor-tunity. Andresen shared that understanding an investors acquisition appetite will help cultivate the portfolio regardless of the buy & hold or fix & flip strategies. Advance intel of these assets will provide a first look – first purchase opportunity. As a Realtor herself, Andresen saw the value in an affordable online platform that could connect agents and investors. The modest fee, with no contract, is more than paid for in just one deal. Currently, the REI Referral Network is waiving its fee until March 2021 so real estate professionals and investors can recover from 2020 and set a strong foundation for 2021.  Not only does the REI Referral Network help you build your relationships, but it also gives you a premier access at investment opportunities, many of which are not yet listed publicly. This “first look” includes advanced access to the REO and foreclosure assets that have started to come to market following mortgage forbearance. Broadcast Opportunities Each week, the Referral Network sends out a newsletter to over 60,000 people nationwide featuring one of their member’s listings. Not only do investors see the listing, but they also have access to a real-time comparative market analysis for the property, along with information on the market it is located in. Investors can access market metrics directly from the newsletter and then connect with real estate agents/brokers who have expertise in that specific area. The featured asset has a direct link to the listing agent.  Andresen states “We are now taking real estate, a traditionally local business engagement to a national platform. We provide local market intel to the entire national audience.” The REI Referral Network’s mission is to connect agents and brokers with investors and not to take a referral fee. “You may not realize you have a California investor that wants to buy in Albany, NY, and we take that asset and share market metrics. Now your listing is marketed to more than 60,000 people with no marketing fee,” says Andresen. “Real estate is a relationship business, and this is an opportunity to expand your relationships well beyond your current markets. By developing relationships with agents, investors put themselves in a position to get a first look at opportunities that hit the market, oftentimes before they are made public to other real estate professionals.” Agents and brokers can list up to three states and up to 20 counties as areas of expertise on their REI Referral Network profile. This allows agents working in tri-state areas, such as New York, New Jersey, and Pennsylvania, to attract clients interested in their entire market.  REI INK launched the REI Referral Network late last year without any idea of what was on the horizon. Now that COVID-19 has created new opportunities for both agents and investors, the timing could not be better for real estate professionals to engage in this network, especially since the fees are waived until March 2021. REI INK is in a unique position, having relationships with both investors and national real estate brands. “We want to bring everyone together,” Andresen says, “because we have the platform that can do that.” 

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How A Biden Administration May Affect Real Estate Investors

A Perspective on Possible New Rules and Regulations By: Rick Sharga, EVP, RealtyTrac In spite of—and in some ways perhaps because of—a global pandemic, one of the most contentious presidential elections in the nation’s history, and even the invasion of killer hornets into the Pacific Northwest, 2020 has turned out to be a banner year for the U.S. residential real estate market. Existing home sales, which suffered due to government shelter-in-place orders during the Spring, rebounded strongly through the Summer and well into the Fall, driven in no small part by historically low mortgage interest rates which improved affordability even as home prices continued to climb. COVID-19, ironically, accelerated a trend that the market had already begun to see, as Millennial renters began exiting urban areas and becoming suburban homeowners in large numbers. With working from home now a viable and probably long-term option for employees across the country, the demand grew for homes large enough to accommodate a home office and with enough space between neighbors to foster a sense of a healthier, safer environment. All of this resulted in a 3% increase in existing home sales, and about a 20% increase in new home sales in 2020 – both well above most analysts’ forecasts at the outset of the year, and a far cry from the disaster many market observers predicted when the pandemic struck in March. It’s possible that the market would have performed even better had it not been for an historical lack of inventory—by October, there was less than 3 months’ supply of existing homes available for sale, compared to the normal level of 6 months. But a market this strong typically provides a very healthy environment for real estate investors. Fix-and-flip investors find a ready market for properties they rehabilitate, and buy-and-hold investors provide rental properties for households unable to find or afford homes to purchase. As the U.S. economy continues to recover from the pandemic-induced recession, most economists believe that the housing market will carry its momentum into 2021. But for investors there’s another variable to factor into the equation for next year: the Biden Administration. What should investors expect as the White House welcomes a new First Family? Will Campaign Promises Become Policy? One of the concerns voiced by investors is that President Biden might actually implement some of the ideas discussed during the campaign by Candidate Biden. Two of these are particularly worrisome for investors: the elimination of 1031 Exchanges, and a tax on flippers. “Biden has talked about removing the 1031 Exchange program, which would discourage real estate investments,” according to Eric Paulsen, CEO of Topside Real Estate in Newport Beach, CA. Section 1031 of the Internal Revenue Code allows investors to defer paying capital gains taxes on investment property sales if they reinvest the proceeds into a similar investment property within a specified time frame. Typically, an investor has 45 days to identify the replacement property and 180 days to complete the transaction. The Biden Plan for Mobilizing American Talent and Heart to Create a 21st Century Caregiving and Educational Workforce calls for spending $775 billion over the next 10 years, paid for in large part “by rolling back unproductive and unequal tax breaks for real estate investors with incomes over $400,000.” A senior Biden campaign official more specifically spelled out that a Biden Administration would “take aim at so-called like-kind exchanges,” and would “prevent investors from using real-estate losses to lower their income tax bills” according to Bloomberg.  Paulsen believes that these sorts of actions would “disincentivize” real estate investing in general by taking away many of the benefits of real estate investing, and making it less attractive compared to other “investment classes” such as stocks and bonds. Long-time fix-and-flip investor Tim Herriage, CEO of DFWInvestors.com, believes that market conditions will continue to be positive for investors, but is concerned about a “worst-case scenario,” pointing out that “there has been a lot of talk from Democratic members of Congress about legislating against flippers, including a flipper tax in Bernie Sanders’ campaign platform.” The Sanders Campaign did, in fact, recommend  placing “a 25% House Flipping tax on speculators who sell a non-owner-occupied property, if sold for more than it was purchased within 5 years of purchase.” Besides the questionable grammar, this policy—which would be intended to create more affordable housing—would make flipping much less profitable and probably lead to fewer fix-and-flip investors in the market. That would actually remove a viable sales option for financially distressed homeowners, and inevitably reduce the inventory of homes coming to market, thereby raising the cost of the remaining inventory, making homes even less affordable than they are today. While there’s been no word from the Biden Campaign on implementing such a tax, it’s certainly worth paying attention to as the Federal Government’s deficit continues to balloon, and politicians will search for new sources of revenue. What About the Rental Market? The Biden Campaign has earmarked $640 billion over the next 10 years to address the country’s affordable housing problems. Much of the money, and many of the programs, are geared towards helping renters find and be able to afford safe, adequate housing for their families. The Biden Plan for Investing in Our Communities Through Housing includes a wide variety of programs ranging from rolling back discriminatory zoning laws to enhancing consumer protections from evictions and foreclosures; but it also includes an increased amount of government rent subsidies and investments in new affordable housing units. While details of the programs proposed in the Biden housing outline are still being developed, the focus on providing funding to create more rental inventory and also providing funding to help tenants make their monthly payments both sound like potential opportunities for real estate investors. Ed Renwick, CEO of Raineth Housing, which offers affordable single family rental homes in Ohio, Missouri, and Kansas, believes that a Biden Administration will ultimately be good for landlords. “A Biden Administration will help third-quartile earners—my tenant base—survive the COVID-driven economic downturn,” Renwick

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2020: A Year to Forget For Most, But Not For SFR

The SFR Industry Resiliency By: Adam Stern, CEO, Strata SFR There are some industries that tend to do better than average or even flourish during times of economic downturn. If we look back to past recessions in the US, those tended to be segments of the economy where demand does not much fluctuate based on changing prices; sectors such as basic household staples, healthcare, and consumer goods. The reason these sectors tend to outperform the rest of the economy during times of economic contraction is simple! People’s basic needs and their desire and ability to fill them, regardless of the economy, stay consistent. Other sectors do well for other reasons. Segments such as discount retailers and fast food do well because when times are tight, eating and buying cheaper is more appealing. Since the inception of the Single-Family Rental Industry in early 2008, back when the trend was still referred to as Foreclosure-To-Rental, it was speculated that SFR was going to be a “recession-proof” industry. The rationale made sense too. It was widely proposed that SFR would do well during economic expansion as higher home values would push many to rent as homes became less affordable to many, including cash-strapped millennials with high college debt, and at the same time create good returns for SFR portfolio owners as equity in homes increased creating the opportunity to leverage that equity to foster expansion. The flip side of that coin was if the economy tanked, it would mean higher unemployment and stagnant wages, driving many to rent, and in a shrinking economy, SFR investors would reap the benefits of lower home prices and higher returns.  All of this was speculation until this year. With the proliferation of COVID-19 and its resulting effects on the world economy, I don’t think anyone can argue that SFR has been a beneficiary of some stark economic, demographic and lifestyle shifts that have seen the trending toward people living in Single Family Rental Homes and especially those investing in SFR, to take a swing to the positive. Reasons for the Win How the SFR industry won in 2020 reflected a somewhat atypical recession cycle. The current situation, triggered by a worldwide pandemic, has changed the way many people live and work. It also coincided with one of the most divisive and hotly contested elections in recent memory. From top to bottom, there were many winners along the value chain in the SFR industry and few losers which I will outline briefly below. Let’s start with the incumbent SFR industry players, those that have amassed huge portfolios by steadily buying SFR throughout the mid-2010s. Firms such as Tricon, American Homes 4 Rent, Invitation Homes and others have seen strong appreciation in stock prices as the industry has matured. These firms have proven to Wallstreet that scale and efficiency equate to predictable returns. The steadily increasing Net Operating margins of these various platforms, combined with strong earnings from streamlined operations, have attracted new and cheaper capital. This has allowed publicly traded SFR companies to be competitive in a tightening market. As 2020 unfolded, amid uncertainty caused by the pandemic, many firms pulled back on acquisitions which allowed them to focus on operations. This shift in buying habit did not seem to have hurt them though. If anything, it proved that these firms, through their sheer size and organizational prowess, are relatively safe bets for capital to ride out uncertain times. Mid-Cap and Small Cap SFR firms have also seemed to fare well based on the strategies they chose in the years before the pandemic arrived. These firms, like the larger SFR REITs, focused on reinforcing operations and have chosen asset types and geographies that have held up well during the pandemic. They have seen strong income with little change to delinquency and vacancy rates. As such, many have remained well positioned to attract follow-on and newly raised capital from investors hungry for cashflow and yield. This in turn put them in a good position to expand upon their build acquisition infrastructure to deploy capital. Some segments of this category have struggled however during the pandemic. Firms that chose markets and targeted tenant bases that were exceedingly susceptible to the ravages of the pandemic, such as areas where tenants are in lower rent bands or where wages and jobs were adversely affected by the pandemic, have seen higher delinquencies, evictions (in areas where they remained legal), and stagnant or decreasing rent levels. THE NEW WINNER—B4R A huge winner in 2020 has been the new-construction rental sector or as many know it, Build-For-Rent. As overall inventory levels have reached historic lows in many markets around the country, combined with the seemingly insatiable appetite of renters for newly built, more modern rental housing, Build-For-Rent has seen an influx of investment capital through various avenues. These avenues include incumbent SFR firms and not too surprisingly, new entrants such as multi-family investment firms. Other types of real estate investment companies have come into the space as well. For example, those who have been able to leverage their current operations in other real estate food groups as a way to entice institutional capital to back their play in this asset class that is now competing with the other core commercial verticals. To clarify, Build-For-Rent is the practice of buying land (raw or developed) and engaging with lot developers and builders to construct single family detached homes and townhomes for the purposes of holding as rental properties. There are several strategies players are implementing in this space. Building scatter site new construction homes for example is not a new phenomenon, as many investors bought distressed lots in broken subdivisions that resulted from the downturn and have been buying and building homes for rent on individual lots over the last decade. But the new strategy being employed by many SFR REITS, multifamily investment firms, and newly formed Build-For-Rent operators is the single site SFR subdivision. This new “thing” that many are figuring out has become the

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Data Analytics in Multifamily Investment

Major Factors Currently Impacting Multifamily Investing By: Dean Kelker, SVP & Chief Risk Officer, SingleSource Property Solutions The statement ‘real estate investing is not for the faint of heart’ rings ever true in today’s climate. Real estate investing has always been an objective practice, leaning directly on ROI and managing risk. The current political and economic environment presents a series of new and unforeseen opportunities and risks. As a result, investors have been increasingly cautious. Despite the climbing concern, investors can rest assured that they can assess every situation using data analytics to match the existing risk vs. their investment goals. The effects of the pandemic and these new factors must be examined to both mitigate new risks and capitalize on unanticipated prospects that did not exist prior to this event. In order to calm the uncertainty of what the future holds and ensure investors make the right investment decisions, we turn to some of the readily available data, to narrow the investment target to those opportunities that possess the greatest yield potential. Let us identify some of those major environmental factors currently impacting multifamily investing. HOUSING AFFORDABILITY Looking at these factors in the context of commonly available data can bring a more definitive focus to an investment decision in the context of moderating risk and enhancing returns. Markets where housing afford-ability is challenging certainly provide increased opportunity for rental properties as there is typically a larger pool of potential renters. RATE OF INCOME GROWTH VS. HOUSING APPRECIATION Housing affordability also directly ties into the relationship between the rate of income growth as compared to housing appreciation. In those markets where there is a significant imbalance between the rate of housing appreciation and income growth (i.e. income growing at a significantly slower rate than the rate of appreciation in housing prices), housing affordability suffers and conversely creates increased rental opportunities. As a related issue, that imbalance also substantially increases the foreclosure risk in the market which will subsequently increase the potential availability of single-family homes obtainable at attractive acquisition prices to be redeployed by an investor as single-family rentals. UNEMPLOYMENT RATE The market unemployment rate becomes a factor both from the perspective of risk of the investment as well as determining the likely rate of return. The current economic environment presents a good window into how the data must be properly analyzed to reveal the fundamental risk/reward in a particular market. In today’s circumstances, many markets have two unemployment rates; the current spot rate which in most cases is higher than normal, and what I will call a persistent unemployment rate. When the economy was shut down in March there was a national upward spike in the unemployment rate that gradually began to moderate. However, that moderation has been uneven across the country as the economic impact of COVID-19 has been uneven from both a business segment and geographic perspective. Let us look at a market such as Las Vegas—a city largely dependent on travel and hospitality for its economic base. Even as the economy began to reopen, Las Vegas has continued to suffer high unemployment as people have not indicated a desire to return to their previous travel behaviors for reasons of personal health and safety. This has driven the unemployment rate in Las Vegas to what has become a persistently high rate that has resulted in lowered personal aggregate incomes for the residents. High persistent unemployment results in pressure on rents due to declining personal incomes. However, for the investor looking for a longer term holding period coupled with having sufficient financial capacity to sustain a period of suppressed income, high persistent unemployment likely presents opportunities to acquire properties at lower than average prices, yielding higher returns in the longer investment horizon when the property is sold. Therefore, the investor needs to decide whether the reduced short-term income is worth longer-term asset appreciation. FINANCING AVAILABILITY A key element of the investment decision is associated with the availability and sourcing of investment funds. The investor must decide if the funds should come from an internal source or one of the various types of external financing, with the external funds coming from conventional market rate sources or subsidized public sources. Certainly, internally generated investment funds for multifamily housing necessarily compete with other investment opportunities, both real estate and non-real estate. Public sources of financing such as FHA or participation in various government housing programs such as Section 8 or LIHTC programs, establish limitations and requirements on the investor regarding the use and income opportunities with any particular property. The investment analysis of such an opportunity needs to account for many of the previously outlined factors, such as: is there a market for subsidized housing and are the attendant returns within the established parameters of the investor. IMPACT OF COVID-19 RELIEF PROGRAMS The current pandemic has created several unforeseen factors around residential investment such as moratoriums on rent collection, moratoriums on foreclosure, and pass-through of financing moratoriums on to tenants of affected buildings. All these issues have degraded the investment value of residential income property. While most of these policy changes were designed to be temporary, they have been extended as the effects of the pandemic have not abated, resulting in a material level of uncertainty as to when they will end and whether the pre-pandemic investment conditions will return. While the intent of the rent moratoriums was to provide a short term deferral in payments and restore the payments streams in the future, the reality is that for many residential tenants, the ability to pay deferred rents in the future timeframe is likely to be doubtful in the context of the general economic slowdown and widespread unemployment. The investor’s analytics now must reflect both the loss in income, which may impair the ability to make financing payments, coupled with the loss in the value of the asset caused by the diminished income that it is generating. Additionally, in the multi-family rental space, the investor must account for increased costs

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Technology Continues to Transform Commercial Real Estate

The Move from Backgammon to Chess By: Ira Zlotowitz, Founder & President, Eastern Union Everyone who’s been associated with the commercial real estate world over the past 20 years or so has seen technology steadily establish itself within virtually every corner and crevice of the industry. Here are some thoughts and perspectives on the impact that technology has had upon our sector. Some of you may recall Defense Secretary Donald Rumsfeld in 2002 as he discussed factors leading to the Iraq war. The Secretary drew distinctions between “known knowns,” “known unknowns” and “unknown unknowns.” When it comes to our business, technology has essentially transformed commercial real estate from a game with “some knowns” into a game with “all knowns.” Not too long ago, some people knew the facts. Today, essentially, everyone knows the facts. From Backgammon to Chess Our industry used to be a little like backgammon, a game of strategy and luck, where there are both knowns and unknowns. Now our world looks a lot more like chess. We are playing a transparent game where everyone sees very move. There’s no luck involved. There are no unknowns. Who has been taking all of the unknowns off the table: Companies like Actovia, the provider of commercial and residential real estate property, ownership and mortgage data; Reonomy, which analyzes “millions of records to provide the most robust records for every commercial property and owner”; or TEN-X, the “end-to-end transaction platform” that matches buyers with properties that “align with their investment goals.” These tech vendors can tell us just about everything we need to know about an asset in a newly transparent marketplace whose culture has steadily become fairer and more open. And as we survey this newly opened-up landscape, and as we contemplate the long-term impacts of technology on real estate, there is at least one looming fatality: the off-market deal. The Off-Market Deal Why would an owner choose to handle a deal off-market? Typically, the seller initially did not want everyone to know of his or her intentions. Sometimes, such deals would involve a seller who wanted to offload an asset quickly and quietly. But sometimes, off-market sellers also did not have a strong handle on the true value of what they had to sell. If you’re only asking three or four brokers for price offers, you’re not getting much of a read on the asset’s value as assessed through the eyes of the marketplace as a whole. That’s why buyers would often do well in off-market deals. Nowadays, since we are all playing a transparent game of chess, there is little point in keeping your deal off the market. Why do it? Everyone is going to find out anyway. You might as well have the broadest market look at your deal. Now, the entire buyer universe has a chance to chime in on price—and it will. Off-market sellers will no longer run the risk of selling a property below its true value. The price will be vetted by the wisdom of the overall market and final prices will more closely reflect the asset’s true value, unlike during the off-market era. If all brokers have uniform access to just about all the asset information they could want, then what must brokers do to distinguish themselves? What must they do to deliver value to the client? In this market environment, mortgage brokers will often mainly be competing based upon their ability to deliver the lowest cost of funds to the borrower. Unsurprisingly, just as tech has universalized access to property info, it has also enabled mortgage brokers to compile longer lists of lenders. Thanks to this larger array of financing options, brokers are better able to secure financing at a competitive rate. Broaden Your Horizons Another big effect of technology’s rise has been the expansion of the pool of available buyers. In the pre-IT days, as a practical matter, sellers used to only be able to deal with buyers in their own neighborhood, city, or state. Today, technology has broadened sellers’ geographical horizons. Indeed, one of TEN-X’s marketing assertions is that it will find you overseas buyers. Another way technology has brought more buyers and investors into the picture has been through crowdfunding platforms. There are people out there with money to invest who had never before considered commercial real estate as an option. Crowdfunding facilitates the process of stringing together a de facto syndicate of buyers, including first timers. Smart companies are presently leveraging IT resources to help build databases of investors capable of bringing new caches of equity to the table. In addition, today’s smart brokerage firms are not shielding their technology assets behind a shroud. Instead, they are going out of their way to open-source their corporate tech resources with their customers. At our firm, for example, we offer clients a free, mobile-based platform that’s downloadable to a Smartphone—and enables buyers, lenders and brokers to fully underwrite a transaction, all in the palm of their hand. It’s also useful to remember that as tech-driven efficiencies penetrate more and more deeply into the broker’s milieu, these same efficiencies are also arising among clients. New and interesting technologies are also being embraced by buyers, lenders, and sellers. The industry as a whole is getting more efficient. All established brokerage firms today are using technology—enhanced by artificial intelligence—to match borrowers and lenders, buyers and sellers, and landlords and tenants. In the investment space, inefficiencies within the deal-making life cycle are being steadily eliminated. Naturally, there will be a human resources impact. With brokers closing more deals in less time because of their increased speed and efficiency, brokerages will inevitably need lower headcounts to get the same amount of work done. Maximize your productivity, your profitability and your competitive advantage by maximizing your mastery of technology. It’s one of the great “known knowns” of our industry.

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Morris County, New Jersey

A Strong Market is Nothing New for this Northeastern County. By: Carole VanSickle Ellis Although many aspects of the 2020 U.S. economy are in limbo—if not all-out freefall—the residential real estate sector has remained on relatively firm footing. In markets in suburban and rural areas, single-family housing complete with a little personal space for “outdoor living” has become one of the hottest commodities in the country. This is particularly true in areas with highly concentrated populations, such as New York City, where there are many reports of suburban properties within driving distance of the city receiving dozens of offers within hours of going on the market. Some analysts have gone so far as to compare the current “urban exodus” as “reminiscent of the one that fueled the suburbanization of America in the second half of the 20th century,” wrote New York Times reporter Matthew Haag. While some markets in the area around the Big Apple are experiencing their initial taste of what it means for the community and housing prices when city residents start leaving the city, Morris County, New Jersey already had a pretty good idea of what kind of benefits being within driving distance of New York City but offering all the attractions of a more casual, laid-back lifestyle can bring. Morris County communities regularly make the lists for “happiest people” (White Meadow Lake and Succasunna, The Crazy Tourist), and “Best Places to Live in America” (Parsippany-Troy Hills, Money Magazine). On top of that, the county is home to 33 Fortune 500 companies including Honeywell, Colgate-Palmolive, Pfizer, Novartis, Verizon, and Bayer. So, yes, there is a “real estate frenzy” going on in northern New Jersey, but for Morris County, it just means the market is already prepared to welcome new residents to an established, attractive, and resilient set of communities. “Morris County has always had a good balance that attracts new residents,” said Carlo Siracusa, president of the residential brokerage at Weichert, Realtors. Weichert is a family of 18 full-service real estate-related companies headquartered in Morris County with more than 1,400 employees, and sales associates in 350 markets across 41 states. “The commute to New York City is phenomenal; pricing is just right, and there are lots of different property and lot sizes available. Morris County offers what people are looking for and what they can afford,” Siracusa added. A Strong Location for Commuting & Community Do not make the mistake of thinking the Morris County market is just a “bedroom community” for the Big Apple. Although the train ride from the county to the city is just about an hour and the drive is roughly half that, many residents stay local when they go to work at one of the nearly three dozen Fortune 500  businesses with headquarters, offices, or major facilities in the area. With three universities located in Morris County alone, more than half of the adult population holds a graduate degree, and the academic institutions and associated service sectors tend to insulate the local economy from most types of economic volatility. “This is a great place to work,” Siracusa said. “The companies based here made the decision to be here for specific reasons, including a larger hiring pool of qualified people and close proximity to the city.” Add in the high caliber of Morris County public schools and just how much more square footage a buyer can afford in Morris County compared to an hour away in New York, and the market was irresistible to many even before the “urban exodus” hit. Morris County’s public schools have significantly higher average proficiency scores than school systems elsewhere in New Jersey, and the school system overall ranks in the top 5 percent of New Jersey public schools. The county boasts one of the highest concentrations of top-ranked public schools in New Jersey. “This market offers something for everyone,” Siracusa explained. “Every township has its own flavor and personality.” The result is an array of options for buyers and renters fleeing the urban areas around New York City, which is probably why so many Morris County townships and neighborhoods make “top 10” lists for best places to live. For example, the borough of Madison was recently named one of the top 10 places to live in New Jersey “based on an influx of NYC buyers” according to New Jersey Business magazine. “We are seeing robust activity at all different price points,” observed borough historian and Madison agent Scott Spelker, citing the attractive downtown, train access, and proximity to highways as Madison’s big draws. New listings in Madison increased by nearly 54 percent year-over-year this past August alone. Of course, all work and no play makes a housing market a very dull place to be—especially during COVID-19 lockdowns. Fortunately, Morris County residents are a short drive to the Jersey Shore in addition to being in a prime position for occasional commutes to the on-site office. Furthermore, the county has a full 13,000 acres of land set aside for county parks. Across the 38 specific locations, visitors can enjoy more than 150 miles of hiking trails, multiple options for swimming, boating, fishing, ice skating, snow-shoeing, hunting (in certain designated locations), and even art walks and other local events. The park system also boasts three national historic sites: Cooper Gristmill, Fosterfields Living Historical Farm, and Historic Speedwell. Central Park, the county’s newest recreational development, is the first fully accessible outdoor athletic facility of its kind and includes two hockey rinks, a ball field, volleyball courts, a cross-country course, dog parks, accessible play areas, and more than 11 miles of natural trails. The Truth About the “Urban Exodus” to Morris County Perhaps most positive for real estate investors considering acquiring property in Morris County or transacting shorter-term retail sales, the “urban exodus” trend is definitely real and certainly not new. This is true nationally, but is of particular import in Morris County. “In many suburban markets, the pandemic has, ironically, accelerated a trend we were already starting to see: the

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