This year, the New Jersey housing market has been characterized by bidding wars and a scarcity of inventory. Homebuyers have been ecstatic to take advantage of historically low mortgage rates. All of these factors contributed to many homes in New Jersey selling for more than the asking price in 2021. According to the latest market trends in the state, high prices and a scarcity of inventory continued to dampen home sales in New Jersey in October 2021. While closed sales in the state have decreased slightly in recent months, overall sales are up 4.7 percent year to date.
New Jersey is still a seller’s market. The months’ supply of inventory for single-family homes has shrunk to 2.2 months, down 30.3 percent from last year. It refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Six months of supply has historically been associated with moderate price appreciation, while a lower level of months’ supply tends to accelerate price increases. The median price of single-family homes in New Jersey is $440,000, + 7.3% from last year when it was $410,000.
New Jersey Housing Market Trends (Latest Data)
According to Zillow, the typical value of homes in New Jersey is $430,016. This value is seasonally adjusted and only includes the middle price tier of homes. New Jersey home values have gone up 17.2% over the past year. Last year at this time, ZHVI for New Jersey was $366,000. According to Redfin, New Jersey home prices (statewide) were up 7.0% year-over-year in November. At the same time, the number of homes sold fell 10.4% and the number of homes for sale fell 19.9%.
These are the latest trends in the New Jersey housing market (Source: NEW JERSEY REALTORS®)
NJ REALTORS® provide the most comprehensive data available about the New Jersey housing market. Here’s the summary of the latest market data on a year-over-year basis (October 2021 vs October 2020).
Housing Demand
Single Family Closed Sales were down 22.1 percent to 7,601.
Townhouse-Condo Closed Sales were down 13.4 percent to 2,552.
Single Family Median Sales Price increased 7.3 percent to $440,000.
Townhouse-Condo Median Sales Price increased 2.0 percent to $305,000.
Single Family Average Sales Price increased 4.9 percent to $515,062.
Townhouse-Condo Average Sales Price increased 2.9 percent to $375,444.
Housing Supply
Single Family New Listings were down 26.2 percent to 8,219.
Townhouse-Condo New Listings were down 22.4 percent to 2,742.
Months’ Supply for Single Family was down 30.3% to 2.3 months.
Months’ Supply for Townhouse-Condo was down 43.2% to 2.5 months.
Jersey City Housing Market Trends & Forecasts
Jersey City is the second biggest city in New Jersey. The city is home to almost 300,000 people. Unlike many other “Rust Belt” cities, Jersey City is still growing. Its population grew roughly 9.4% between 2010 and 2017. This is a continuation of the city’s rebound since its 1980 low point. There really aren’t suburbs in the Jersey City housing market, just adjoining cities that are likewise in the shadow of the Big Apple.
Should you invest in the Jersey City real estate market in 2021 before it eventually becomes too expensive? Let’s look at the Jersey City housing market trends which make it lucrative for real estate investors and buyers. Jersey City is raising its profile as an alternative to New York City, given its closeness to the Big Apple and more reasonable housing prices. Located just across the Hudson River from Manhattan’s West Side, Jersey City is being touted by some as the latest alternative to New York City’s sweltering real estate market.
The typical home value in Jersey City is $573,033 on Zillow.com. Jersey City home values have gone up 5.5% over the past year. Jersey City is the second-most populous city in the U.S. state of New Jersey, after Newark. It is the county seat of Hudson County as well as the county’s largest city. These are the latest trends in the Hudson County housing market (Source: NEW JERSEY REALTORS®).
Hudson County real estate market trends indicate an increase of $30,500 (+6.9%) in the median sales price and a -20.7% drop in home sales over the past year. The median sales price for homes in Hudson County for Oct 2021 was $472,500 based on 69 home sales.
New Listings dropped by 14.6 percent year-over-year.
Closed Sales dropped by 20.7 percent year-over-year.
Days on Market Until Sale dropped by 22.7 percent to 34 days.
Median Sales Price rose by 6.9 percent to $472,500.
Percent of List Price Received rose by 0.6 percent to 99.4%.
Inventory of Homes for Sale dropped by 17.7 percent year-over-year.
Months Supply of Inventory dropped by 35.5 percent to 4.0 months.
Source: NEW JERSEY REALTORS®
Jersey City Housing Market Summary
According to Neighborhoodscout, Jersey City’s real estate costs are among the highest in the country, with a population of 292,449, 103,225 total housing units (homes and apartments), and a median house value of $518,860, although house prices here do not compare to those in the most expensive New Jersey communities.
Large apartment complexes or high-rise apartments are the single most common housing type in Jersey City, accounting for 50.24% of the city’s housing units. Other types of housing that are prevalent in Jersey City include duplexes, homes converted to apartments or other small apartment buildings ( 35.20%), single-family detached homes ( 7.39%), and a few row houses and other attached homes ( 7.02%). Jersey City is dominated by renter-occupied one or two bedrooms apartments. 71.19% of Jersey City’s dwellings are rentals.
The current trends show that Jersey City is a buyer’s real estate market, which means that the supply of homes is greater than the demand for homes. To put it another way, real estate inventory is high, and there are plenty of homes for sale in this market.
Median List Price: $599,000, flat year-over-year (On Realtor.com)
Price Per Sqft: $520
Median Sales Price: $359,500
Homes in Jersey City, NJ sold for 2.93% below the asking price on average in November 2021.
On average, homes in Jersey City, NJ sell after 85 days on the market.
The trend for median days on market in Jersey City, NJ has gone up since last month, and slightly up since last year.
The Waterfront has a median listing home price of $798K, making it the most expensive neighborhood in Jersey City.
Greenville is the most affordable neighborhood, with a median listing home price of $395K.
As per the real estate company named Redfin, the Jersey City housing market is somewhat competitive. In November 2021, Jersey City home prices were up 1.3% compared to last year, selling for a median price of $585K. On average, homes in Jersey City sell after 48 days on the market compared to 49 days last year. There were 157 homes sold in November this year, down from 166 last year.
Some homes in Jersey City get multiple offers.
The average homes in Jersey City sell for about 2% below the list price and go pending in around 43 days.
can sell for around list price and go pending in around 18 days.
Jersey City Real Estate Market Forecast 2022
The real estate data from Zillow shows that the typical home value in Jersey City is $573,033. From 2019 to 2020, home prices were up by about 7.2%. Over the past year, the Jersey City home values have gone up 5.5% and will continue to rise in 2022. The supply is not very tight but with all the other factors considered, at this time, it is unlikely that the Jersey City housing market will see a price decline in 2022.
The typical home value of homes in New York-Newark-Jersey City Metro is $571,556.
New York-Newark-Jersey City Metro home values have gone up 13.2% over the past year.
Zillow predicts they will rise 10.0% in the next year.
The typical home value of homes in Jersey City is $573,033, up 5.5% over the past year.
The typical home value of homes in Newark is $382,055, up 16.6% over the past year.
Hudson County’s home values have gone up 6.1% (current = $537,557) over the past year and will continue to rise in the next year.
Credits: Zillow
Jersey City Real Estate Investment Overview 2022
Neighborhoodscout’s data shows Jersey City has had some of the highest home appreciation rates of any community in the country over the last decade. Jersey City real estate has appreciated by 114.64 percent over the last decade, equivalent to an average annual appreciation rate of 7.94 percent, placing Jersey City in the top ten percent of all cities nationally in terms of real estate appreciation. If you are a home buyer or an investor, Jersey City has unquestionably been one of the best long-term real estate investments in the country over the last decade.
Jersey City’s appreciation rates have lagged behind the rest of the country over the last year. Jersey City’s appreciation rate over the last twelve months has been 12.25 percent. From the most recent quarter, house appreciation rates in Jersey City were 3.64 percent, equating to a 15.37 percent annual appreciation rate. Notably, Jersey City’s latest quarter appreciation rate was one of the lowest in the United States.
10 Highest Appreciating Jersey City Neighborhoods Since 2000: By Neigborhoodscout.com
Newark Ave / 7th St
Jersey Ave / 2nd St
Pearl St / Washington St
Montgomery St / Brunswick St
Pavonia Ave / Monmouth St
Newark Ave / Jersey Ave
Summit Ave / Magnolia Ave
Marion
Newark Ave / Court House Pl
Wayne St / Chopin Ct
We’re not going to cite waterfront views, vibrant nightlife, or “it’s hip” as reasons to buy Jersey City investment properties for cash flow. Instead, we’re going to focus on serious reasons an investor may want to buy property here, whether to rent out or renovate and sell. Here are some of the reasons to invest in the Jersey City real estate market.
The Disproportionate Student Market Affects Rental Demand
A large student population creates a large pool of renters that are relatively insensitive to rent increases. The Jersey City real estate market contains two such pools. One consists of local students attending schools like Saint Peter’s University and New Jersey City University. The New Jersey City University opened a new facility on the waterfront in 2015 intended to train the next generation of financial traders. St. Peter’s is a Jesuit college with more than three thousand students. The other pool consists of all the students who want to go to school in NYC but can’t afford to live there or don’t want to be crammed four to a bedroom. This explains why Rutgers University offers MBA classes at a satellite campus in Jersey City.
About 70% of housing units are renter-occupied households. As of December 24, 2021, the average rent for a 1-bedroom apartment in Jersey City, NJ is currently $1,950. This is an 8% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Jersey City decreased by -7% to $1,718. The average rent for a 1-bedroom apartment decreased by -4% to $1,950, and the average rent for a 2-bedroom apartment decreased by -5% to $2,050.
The average rent for a 2-bedroom apartment in Jersey City, NJ is currently $2,050, an 8% increase compared to the previous year.
The average rent for a 3-bedroom apartment in Jersey City, NJ is currently $2,199, a 10% increase compared to the previous year.
The average rent for a 4-bedroom apartment in Jersey City, NJ is currently $2,499, a 6% increase compared to the previous year.
Jersey City Tolerates AirBnB
Real estate investors want to know that they have a variety of ways to monetize a property. The Jersey City housing market has a major advantage in this regard over New York City – it has formally embraced AirBnB while NYC is actively hostile to it. Yet the proximity of many neighborhoods to NYC makes it popular with home-sharing sites like Airbnb. Hotel taxes are due on these rentals. Compare this to NYC that heavily fines people who rent out a room, even if it is necessary to make the rent. Jersey City takes things one step further and is setting up a “Friendly Building Program”, where developers build entire buildings were renting through AirBnB is allowed. This is an innovative development in the Jersey City housing market.
It Is a Cheap Suburb of New York City
Jersey City has established itself as the go-to for people fleeing New York City. Its growth can be attributed to an influx of highly educated millennials. There are jokes that the apartment is perfect except for the fact it is in New Jersey, and if you’re going to live in New York City, you want to live in New York City. However, given that NYC is one of the most expensive real estate markets on the planet, the coveted title of “New York Resident” is a luxury many working in NYC cannot afford.
This is why Jersey City is considered part of the New York Metro area. And the insane prices of New York real estate are driving many to live here instead. Jersey City is home to the Port of New York and New Jersey. That is a high-paying employer in its own right. However, it creates many transportations, distribution, and manufacturing jobs in the area. This proximity to major markets and ready access to the rest of the East Coast explains why companies like Goya have built facilities here. Jersey City’s unemployment rate is consistently half a point below the New Jersey state average and two to three points below that of Newark.
The Growth of Wall Street West Improves the Local Economy, Too
Wall Street in New York has paid many people incredibly high wages, but businesses don’t want to pay NYC’s insane rental rates for office space. This has led Jersey City to host many businesses that choose to remain close to New York but work in cheaper environs. Thirteen million square feet of office space in Jersey City, New Jersey is utilized by what is called Wall Street West. This industry provides more than a third of the private-sector jobs in the city. Most are in the securities industry while a fifth are in banking and nearly 10% are in insurance. The growth of Wall Street West will fuel demand for both office space and the luxury Jersey City housing market.
There are people concerned that Jersey City is so desirable and seeing so many new residents move in that Jersey City could turn into another Brooklyn, another expensive NYC neighborhood. Between demand by Wall Street West and New York residents who love rent half as high as NYC, the median apartment and condo rate is going up. Downtown Jersey City saw property valuations go up roughly 10% in 2018. The upscale end of the Jersey City real estate market is skyrocketing, pulling up average property values and rents in the area, too.
Jersey City has been renewing itself. Jersey City has been busy redeveloping old neighborhoods, encouraging a mix of new retail, luxury housing, and affordable housing. Jersey City is notable for the major redevelopment on the waterfront, known as the Shore, while properties there enjoy a great view of Manhattan. A number of old industrial facilities are being converted to lofts or simply torn down and replaced, while the city government puts in new parks and offers lower sales tax rates for retailers in areas it wants to blossom. An investor in the New Jersey housing market can look up where these areas are, buy older properties, renovate them and then rent them out or sell them.
New Jersey Is (Relatively) More Landlord Friendly
We’re back to comparing New Jersey to New York, this time in terms of landlord friendliness. New Jersey allows landlords to file for evictions when a tenant is only a few days late on rent. Compare that to the long, arduous process of eviction in New York and especially NYC. However, you cannot simply evict someone because their lease is over. You cannot collect late fees or attorney’s fees from eviction unless the proper clauses are written into the lease at the very start.
Landlords have to keep receipts of the rent payments, must follow strict legal disclosures like those related to lead paint, and you have to pay interest on deposits. This makes renting to tenants in the Jersey City real estate market relatively easier but not as easy as more landlord-friendly states. Cities like Los Angeles, Seattle, and New York attract young adults. The high price of real estate drives those who want to have families to the suburbs or cheaper areas like the Jersey City housing market. New Jersey has an added point in its factor to NYC refugees – better schools.
The Jersey City real estate market is bolstered by much higher high school graduation rates and college attendance rates for the average student; that parents don’t have to pay for private school tuition on top of insane rents is another point reason to move. That attracts families to the area who stay here for years, and it increases the odds their own children stay. This explains why the median age of Jersey City residents is around 33 versus the state average of 39-40. That demographic momentum will sustain values in the Jersey City real estate market for years to come.
Summary
The Jersey City real estate market is seeing significant growth because it is close to New York City but isn’t NYC. It has a number of points in its favor, too, like a good job market and local amenities. Renters and buyers alike are taking notice and helping to make Jersey City the fastest-growing metropolitan area in the state. Apart from the Jersey City real estate market, you can also invest in Columbus, Ohio. The Columbus Ohio real estate market is a bright spot in a declining region.
It mixes smart redevelopment, quality of life, and growth to create a stable, slow-growing market that will be thriving well into the foreseeable future. There are many neighborhoods to consider for buying properties in Columbus. Properties in Worthington and downtown Columbus have higher than average median home prices, and their relatively low crime rates add additional appeal. Places like Victorian Village, where home prices remain higher than many other places in the city, support a strong local market, and they can signify a lower level of risk.
Another market that we suggest is the housing market in Colorado Springs, CO. The Colorado Springs real estate market contains several large populations of renters, many practical reasons for people to move here from the surrounding area and across the country, and long-term factors that will drive growth for years to come. Forget the Mile High City and invest in the Colorado Springs real estate market. The Colorado Springs real estate market is notable for how affordable it is compared to many other cities in the Rockies.
Let us know which real estate markets you consider best for real estate investing! If you need expert investment advice, you can fill-up the form given here. One of our investment specialists will get in touch with you. Norada Real Estate Investments helps take the guesswork out of real estate investing. We can help you succeed by minimizing risk and maximizing the profitability of your real estate investments.
Remember, caveat emptor still applies when buying a property anywhere. The information contained in this article was pulled from third-party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
References
Market Trends and Forecasts
http://njar-public.stats.10kresearch.com/reports
https://www.zillow.com/jerseycity-nj/home-values
https://www.neighborhoodscout.com/nj/jersey-city/real-estate
https://www.redfin.com/city/9168/NJ/Jersey-City/housing-market
https://www.realtor.com/local/Jersey-City_NJ
https://www.zumper.com/rent-research/jersey-city-nj
Airbnb
https://ny.curbed.com/2017/5/25/15692798/airbnb-jersey-city-urby-ironstate-development https://newyork.cbslocal.com/2015/10/12/jersey-city-airbnb-deal
Redevelopment
Jersey City Redevelopment Agency Plans to Buy Bergen-Lafayette Property
Jersey City Approves $170 Million Bond For 8,000 Unit Bayfront Project
More Landlord Friendly
https://focusedlaw.com/four-new-jersey-eviction-laws-you-should-know-as-a-landlord
https://www.rentcafe.com/blog/renting/states-best-worst-laws-renters
https://www.avail.co/education/laws/new-jersey-landlord-tenant-law
Metro for NYC
http://worldpopulationreview.com/us-cities/jersey-city-population/
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