Family office investor and commercial broker Francis Leung on the heated suburban real estate markets from Covid-19

Posted by Wei Min Tan on July 15, 2020

Francis Leung is a family office investor and commercial real estate broker.  In this interview, he talks about his personal house hunting experience in the suburbs of New Jersey.  The suburbs are experiencing a buying frenzy from New Yorkers wanting more space and lower density.

Tell us about yourself

Thank you for taking the time to interview me.  I grew up in East Hanover, New Jersey which is located in Morris County.  I grew up in a family of entrepreneurs which has taught me to follow my own path.  I operate a Real Estate Family Office and also work as a Commercial Real Estate Sales and Leasing Broker at Okada and Company.

As I got married last year, my wife and I have been searching for a second home outside of New York City.  We cherish and love our city due to the unique environment, but we needed to find a weekend getaway which still allows us the quick accessibility to drive back in a relatively reasonable time.  Our timeline to buy the home was the next 3-9 months.

Where have you been looking?

The search was mainly focused on the suburbs of Redbank/Fair Haven/Little Silver/Oceanport in New Jersey.  We wanted to be able to have quick access to the ocean and beach.  There were other factors that contributed to our decision to look in these neighborhoods.  They include factors like quality schools and surrounding business districts.

Tell us about the search experience

Our search began in February 2020, prior to the beginning of COVID-19 becoming an issue.  As we started our search, we began to understand that suburban houses do not see huge appreciation unless they are new development or have been gut-renovated.  After looking through numerous homes and making a few offers, we got a better feel for seller sentiment.

At the beginning of COVID-19, shutting down of the economy disrupted the normal flow of business.  We saw that many homes were delisted from the market.  This coupled with the fact that companies started implementing Work-from-Home policies and we started to see families move out of NYC by purchasing or renting homes outside of the NYC metropolitan area.

We started to see that sellers were looking for a 20% – 30% premium for homes they bought only a few years ago.  Due to COVID-19, there has been an uptick in home purchases in the suburbs.  Every house that we have looked at and placed a bid on, sellers have held firm on their pricing.

Have you bid on any property?

This has turned most of the suburban market into a sellers’ market as there has been a lack of inventory and an influx of demand.  This is great for sellers but as a buyer it creates a market where I could be potentially overpaying for a home.  The current market environment mixed with low interest rates have helped create buyer demand that is insatiable, creating multiple offers on most homes.

What is your overall view of the suburban market now, post lockdown?

As a buyer, I feel today’s suburban market is overpriced.  That being said, my wife and I have slowed down our search and are going to wait until the market changes so that buyers have an advantage in the suburban markets.  We hope to finally get our opportunity to find the perfect home in the near future.

About Francis:  Francis Leung manages a family office and is also Vice President at Okada & Company where he advises clients on commercial transactions, mortgage note sales and leasing strategies.  Previously, he was at hotel development firm The Lam Group, in charge of acquisition management, design, construction, and project management. 

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