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January 30th, 2019 by Marco Santarelli
Jersey City Real Estate Market
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 2019 before it eventually becomes too expensive? Let’s look at the 10 best reasons that make Jersey City still lucrative for real estate investors and buyers.
Jersey City Real Estate Market Predictions 2019
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 median home value in Jersey City is $480,900 on Zillow.com. Jersey City home values have gone up 13.8% over the past year and the Jersey City real estate market forecast is that they will rise 7.6% in 2019. The median price of homes currently listed in Jersey City is $585,000. The median rent price in Jersey City is $2,100, which is lower than the New York-Newark-Jersey City Metro median of $2,950.
Jersey City Real Estate Market Trends 2018
Jersey City real estate market trends indicate an increase of $25,500 (6%) in median home sales and a -5% drop in median rent per month over the past year. The average price per square foot for this same period fell to $418, down from $451. Trulia has 442 resale and new homes in Jersey City lined up for you, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.
The median sales price for homes in Jersey City for Oct 24 to Jan 23 was $460,500 based on 342 home sales. Average price per square foot for Jersey City was $418, a decrease of -7% compared to the same period last year. The median rent per month for apartments in Jersey City for Dec 24 to Jan 24 was $1,800.
As per the real estate company named Redfin, the Jersey City housing market is somewhat competitive. Homes in Jersey City receive 3 offers on average and sell in around 56 days. The average sale price of a home in Jersey City was $487K last month, up 5.9% since last year. The average sale price per square foot in Jersey City is $391, down 24.5% since last year. Homes for sale in the Jersey City housing market typically receive 3 offers. Homes sell for about 1% below list price and go pending in around 56 days. Hot homes in Jersey City can sell for about 1% above list price and go pending in around 22 days.
Jersey City Housing Market Summary
There are 762 homes for sale in Jersey City, NJ, ranging from $115K to $5.9M on Realtor.com. 79 of which were newly listed within the last week. Additionally, there are 808 rentals, with a range of $650 to $1.8M per month. There are 9 neighborhoods in Jersey City.
The Waterfront has a median listing price of $788.9K, making it the most expensive neighborhood. Bergen – Lafayette is the most affordable neighborhood in Jersey City, with a median listing price of $379K. There are 116 schools in Jersey City, NJ. There are 36 elementary schools, 29 middle schools, 15 high schools and 36 private & charter schools.
In December 2018 the housing market in Jersey City, NJ was a buyer’s market, which means there were roughly more active homes for sale than there were buyers. Buyer’s markets are generally more advantageous for buyers rather than sellers. In December 2018, the median list price of homes in Jersey City, NJ was $578.2K, trending up 15.9% year-over-year.
The median listing price per square foot was $608. The median sale price was $444.5K. Homes in Jersey City, NJ sold for 3.17% below asking price on average in December 2018. On average, homes in Jersey City, NJ sell after 97 days on the market. The trend for median days on market in Jersey City, NJ is flat since last month, and flat since last year.
On Movoto.com, the median list price in Jersey City is $475,000. The median list price in Jersey City went down 4% from undefined to January. Jersey City’s home resale inventories is 37, which increased 12 percent since undefined 2019. The median list price per square foot in Jersey City is $436. undefined 2019 was $644. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in January.
According to Neigborhoodscout.com, large apartment complexes or high rise apartments are the single most common housing type in Jersey City, accounting for 48.21% 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 ( 35.88%), single-family detached homes ( 8.09%), and a few row houses and other attached homes ( 7.63%). This particular housing mix is relatively uncommon and characteristic of cities that are compact and walkable, and which often have a lively downtown. Jersey City is dominated by renter-occupied one, two, or no bedrooms apartments. 72.42% of Jersey City’s dwellings are rentals.
Downtown Jersey City Housing Market Trends
The Downtown Jersey City housing market had a notable surge in 1-4 family homes coming to market during 2018’s first quarter, with the number listed Downtown increasing 238% from 13 in quarter one of 2017 to 44 in 2018’s first quarter. Downtown also had 17 total sales of 1-4 family homes, a 31% increase compared to the first quarter of 2017.
However, Pure Properties’ latest market report shows that while more homes are for sale, prices haven’t taken a hit. The median sales price for 1-4 family homes increased 2% from 2017’s first quarter to $1.425 million, while condo sale prices dipped 2% year-to-year to $721,000. Rents Downtown have thus far been unaffected by the tax upheaval, staying flat over the year to average $2,600/month.
The Redfin’s data shows that the Downtown Jersey City housing market is somewhat competitive. Homes in Downtown Jersey City receive 4 offers on average and sell in around 45 days. The average sale price of a home in Downtown Jersey City was $708K last month, up 7.9% since last year. The average sale price per square foot in Downtown Jersey City is $703, up 2.0% since last year.
Homes for sale in the Downtown Jersey City housing market typically receive 4 offers. Homes sell for about 1% below list price and go pending in around 45 days. Hot Homes in Downtown Jersey City can sell for about 1% above list price and go pending in around 19 days.
Jersey City Foreclosures And Bank Owned Properties
Foreclosures will be a factor impacting home values in the next several years. In Jersey City 2.8 homes are foreclosed (per 10,000). This is greater than the New York-Newark-Jersey City Metro value of 0.9 and also greater than the national value of 1.2. The percent of delinquent mortgages in Jersey City is 1.5%, which is higher than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Jersey City homeowners underwater on their mortgage is 11.6%, which is higher than New York-Newark-Jersey City Metro at 8.5%.
On RealtyTrac, there are currently 659 properties in Jersey City, NJ that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 493. In December, the number of properties that received a foreclosure filing in Jersey City, NJ was 3% higher than the previous month and 48% lower than the same time last year. Home sales for November 2018 were up 0% compared with the previous month, and down 100% compared with a year ago. The median sales price of a non-distressed home was $0. The median sales price of a foreclosure home was $0, or 0% higher than non-distressed home sales.
Jersey City Home Prices And Appreciation Rates
Appreciation rates are so strong in Jersey City that despite a nationwide downturn in the housing market, Jersey City real estate has continued to appreciate in value faster than most communities. Looking at just the latest twelve months, Jersey City appreciation rates continue to be some of the highest in America, at 7.72%, which is higher than appreciation rates in 80.52% of the cities and towns in the nation.
Neighborhoodscout’s data shows us that based on the last twelve months, short-term real estate investors have found good fortune in Jersey City. Jersey City appreciation rates in the latest quarter were at 1.23%, which equates to an annual appreciation rate of 5.02%. Relative to New Jersey, our data show that Jersey City’s latest annual appreciation rate is higher than 90% of the other cities and towns in New Jersey.
10 Highest Appreciating Jersey City Neighborhoods Since 2000: By Neigborhoodscout.com
Should You Buy Jersey City Investment Properties For Cash Flow?
We’re not going to cite waterfront views, a vibrant night life 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 the top 10 reasons to invest in the Jersey City real estate market.
1. 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.
2. Local Employment Is Relatively Strong
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 transportation, 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.
3. 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 to 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.
4. Appreciation Is Strong
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.
5. Taxes Are a Truly Relative Bargain
Property taxes in New Jersey are the highest in the country. However, New Jersey makes up for this with lower income taxes and property taxes. On top of that is New York City’s city level income tax. This gives New Jersey a lower overall tax burden than New York City. If you will be paying income taxes on rental income, the Jersey City real estate market is better than New York City’s.
6. 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 an 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.
7. Families Want to Live Here
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.
8. 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 where renting through AirBnB is allowed. This is an innovative development in the Jersey City housing market.
9. The Disproportionate Student Market Affects 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.
10. The Jersey City Is 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.
Jersey City NJ Real Estate Investment: Summary
If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. You must also learn from successful real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Jersey City, NJ. 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.
The median home price is around $260,000, and the median rent is roughly a thousand a month. That is about 10% higher than the national average, but the average price of a home in Denver passed half a million dollars in 2018. In short, you can buy two homes in Colorado Springs for the price of one in Denver. The double digit price gains in Denver will push people to Colorado Springs, as well, since relatively few earn the $90,000 a year income needed to afford the average Denver home.
Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, 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 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, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Metro for NYC
Unemployment rates / jobs
Wall Street West
More Landlord Friendly
Market Trends and Forecast https://www.zillow.com/jerseycity-nj/home-values https://www.realtytrac.com/statsandtrends/foreclosuretrends/nj/hudson-county/jersey-city https://www.neighborhoodscout.com/nj/jersey-city/real-estate https://www.movoto.com/jersey-city-nj/market-trends https://www.redfin.com/city/9168/NJ/Jersey-City/housing-market https://www.trulia.com/real_estate/Jersey_City-New_Jersey/market-trends https://www.realtor.com/local/Jersey-City_NJ https://jerseydigs.com/hudson-county-real-estate-market-report-1q2018
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