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Is Newark The Best Market For Real Estate Investment In 2019?

How is The Newark Real Estate Market 2019?

Buying real estate in Newark can be a worthy investment opportunity. If you are looking at investing in the Newark real estate market in 2019 as a potential investment opportunity, you must read till the end. Whether you’re looking to buy or sell, timing your local market is an important part of real estate investment.

Newark, New Jersey gets a bad rap as the place you live when you can’t even get close to Queens. It has a reputation for relatively cheap real estate and less than ideal living conditions, though the city has made a turnaround. Newark, New Jersey is home to around 300,000 people. It sits in Essex County and is the largest city in New Jersey.

Newark, New Jersey is notable for being one of the oldest cities in the United States, though it is shadowed by the much larger, more famous New York City. Newark is often considered a suburb of New York City, though it is part of the Newark-Union metropolitan area. Its proximity to New York City makes it a prime location for young professionals.

Being a densely populated area, Newark has the most renters in the country, which leads to a strong rental demand that will only increase as the population increases. The Newark housing market is poised for steady price growth in 2019. Is Newark going to be one of the hottest real estate markets for investors in 2019?

To answer this question, let’s take a deep look at the latest Newark housing market trends and find out the prospects of investing in the Newark real estate in 2019.

Newark Real Estate Market

Original Photo via Pixabay

Newark Real Estate Market Forecasts 2019 & 2020

According to Zillow, the median home value in Newark is $264,000. Newark home values have gone up 11.9% over the past year and Zillow’s Newark real estate market prediction is that the prices will rise 6.5% within the next year. The median list price per square foot in Newark is $122, which is lower than the New York-Newark-Jersey City Metro average of $283.

The median price of homes currently listed in Newark is $250,000. The median rent price in Newark is $1,600, which is lower than the New York-Newark-Jersey City Metro median of $2,950.

Here is the Newark real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 6.5% till June 2020.

Newark Real Estate Market Forecast

Graph Credits: Zillow

Newark Housing Market Forecast 2019 – 2021

The Newark housing market forecast for the 3 years ending with the 3rd Quarter of 2021 is also positive. The accuracy of the Newark housing market trend prediction is 88%. Accordingly, LittleBigHomes.com estimates that the probability for rising home prices in Newark, NJ is 88% during this period. If this Housing Market Forecast is correct, home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.

Check this page each quarter for updates to the Newark, NJ Real Estate Forecast.

Newark Real Estate Market Trends

Is Newark the hottest market for real estate investment in 2019? Let us see what do the market trends have to say. Newark real estate market trends indicate an increase of $30,500 (12%) in median home sales and a 6% rise in median rent per month over the past year.

The average price per square foot for this same period rose to $128, up from $115. Trulia has 600 resale and new homes for sale in Newark, NJ, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process.

Newark Real Estate Market Trends

Graph Credits: Trulia.com

The median sales price for homes in Newark for May 1 to Jul 31 was $292,000 based on 136 home sales. Average price per square foot for Newark was $128, an increase of 11% compared to the same period last year. The median rent per month for apartments in Newark for Jun 28 to Jul 28 was $1,587.

As per the real estate company named Redfin, the Newark housing market is somewhat competitive. Homes in Newark receive 1 offers on average and sell in around 63 days. The average sale price of a home in Newark was $240K last month, up 21.2% since last year.

The average sale price per square foot in Newark is $133, up 13.7% since last year. Homes typically receive 1 offer. Homes in the Newark housing market sell for around list price and go pending in around 63 days. Hot homes for sale in Newark, NJ can sell for about 3% above list price and go pending in around 24 days.

Newark Housing Market Statistics

Median Sales Price $292,000 (On Trulia)
Price Per Square Ft $128
Median Rent Per Month $1,587
Median Household Income $36,170
Home Owners 24%
Single Residents 32%
Median Age 33
College Educated 16%
Transportation 62% people commute by car; 29% commute by public transportation

There are 622 homes for sale in Newark, NJ ranging from $34K to $2M on Realtor.com. 56 of which were newly listed within the last week. Additionally, there are 270 Newark rental properties, with a range of $400 to $7,000 per month. The median list price of homes in Newark, NJ was $275K in July 2019, trending up 5.8% year-over-year. The median listing price per square foot was $130.

Newark Housing Market Trends

Graph Credits: Realtor.com

The median list price in Newark, NJ is $234,500 on Movoto.com. The median list price in Newark went up 1% from July to August. Newark’s home resale inventories is 196, which decreased 3 percent since July 2019. The median list price per square foot in Newark is $154. July 2019 was $164. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in August.

Newark Home Prices Trends

Graph Credits: Movoto.com

Newark, NJ Single Family And Multi-Family Homes

Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate.

Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.

As per the real estate company called Neigborhoodscout.com, the median house price in Newark, NJ is $258,291, which indicates that home prices in Newark are above the national average for all cities and towns in the United States. Duplexes, homes converted to apartments or other small apartment buildings are the single most common housing type in Newark, accounting for 48.50% of the city’s housing units.

Other types of housing that are prevalent in Newark include large apartment complexes or high rise apartments, single family detached homes and a few row houses and other attached homes. The Newark housing market is dominated by renter-occupied one, two, or no bedrooms apartments.

Newark’s median home value rose a whopping 11.9% over the last 12 months and is expected to rise another 6.5% over the next 12 months.

Currently, there are 303 single family homes for sale in Newark, NJ on Zillow. Additionally, there are 51 single family homes for rent in Newark, NJUnder potential listings, there are about 22 Foreclosed and 8 Pre-Foreclosure homes. These are the properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).

Newark, NJ Foreclosures And Bank Owned Homes 2019

According to Zillow’s statistics, in Newark 0.0 homes are foreclosed (per 10,000). This is lower than the New York-Newark-Jersey City Metro value of 0.9 and also lower than the national value of 1.2. The percent of delinquent mortgages in Newark is 6.4%, 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 Newark homeowners underwater on their mortgage is 27.9%, which is higher than New York-Newark-Jersey City Metro at 8.5%.

Foreclosures in Newark 927
Homes for Sale in Newark 293 (RealtyTrac)
Recently Sold 1,368
Median List Price $275,000 (4% ⇑ vs Jun 2018)

There are currently 927 properties in Newark, NJ that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 293. In July 2019, the number of properties that received a foreclosure filing in Newark, NJ was 22% lower than the previous month and 37% lower than the same time last year.

Best Places To Buy Real Estate In Newark, New Jersey

If you are looking to buy real estate in Newark, you should know the best places to invest in. The three most important factors when buying a real estate anywhere are location, location, and location. Location creates desirability. Desirability brings demand. Demand would raise the price of your Newark real estate and you should be able flip it for a lump sum profit.

When looking to invest in Newark real estate, you need to find places where the expected property appreciation forecast is positive. The running costs for owning and managing an Newark investment property should be low. The neighborhoods in Newark must be safe to live in and should have a low crime rate.

The neighborhoods should be close to basic amenities, public services and shopping malls. There should be a natural and upcoming high demand for rental properties and a low supply of income properties. There are 19 neighborhoods in Newark. There are 70 elementary schools, 69 middle schools, 30 high schools and 34 private & charter schools.

Some of the best neighborhoods in Newark, New Jersey are Weequahic, Lower Vailsburg and Upper Clinton Hill. Forest Hill has a median listing price of $382.4K, making it the most expensive neighborhood. Springfield – Belmont is the most affordable neighborhood in Newark, with a median listing price of $172.5K.

Here are the 10 best neighborhoods in Newark to invest in real estate because they have the highest appreciation rates (List by Neigborhoodscout.com).

1

 U of Medicine and Dentistry of New Jersey / Georgia King Vlg

2

 Ave P / Roanoke Ave

3

 N 9th St / Bloomfield Ave

4

 N 6th St / Bloomfield Ave

5

 Lincoln St / Court St

6

 Lincoln Park / Clinton Ave

7

 S 10th St / 16th Ave

8

 Mccarter Hwy / Market St

9

 Spruce St / Barclay St

10

 W Kinney St / Broome St

Should You Invest In Newark Real Estate In 2019?

Is it worth buying a house in Newark, NJ? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a property in Newark is good investment? You need to drill deeper into local trends if you want to know what the market holds for the year ahead.

We have already discussed the Newark housing market 2019 forecast for answers on why to put resources into this market. Although, this article alone is not a comprehensive source to make a final investment decision for Newark but we have collected ten evidence based positive things for those who are keen to invest in the Newark real estate in 2019.

Investing in Newark real estate will fetch you good returns in the long term as the home prices in Newark have been trending up year-over-year. Let’s take a look at the number of positive things going on in the Newark real estate market which can help investors who are keen to buy an investment property in this city.

1. The Newark Real Estate Is Relatively Affordable

You can find jokes about 2000 dollar a month apartments in New York City that are the size of a walk-in closet, and the closet is counted as a bedroom. The Newark housing market is a bargain by those standards. The median home value in Newark hovers around 230,000 dollars.

The Newark real estate market is even a bargain by New Jersey market standards. The state’s median home price is around 330,000 dollars, since properties close to New York cost much more.

2. It Is Attractive to Millennials

One point in favor of Newark real estate investment is that the area is favorable to Millennials. It isn’t just that they can afford a two bedroom apartment. It is also the fact that the area is accessible. The walk score for the area is 78 out of 100.

The city is well-served by public transit, including connections to high paying jobs in New York City. That’s why the median age in Newark is 33, well below the national average.

And because so many people moved here to raise families, there’s a new generation coming up that will drive future demand in the Newark real estate market.

3. The Decent ROI on Newark Rental Properties

The average rent in the Newark area is 1200 dollars a month, though that’s for small apartments. Rental rates vary wildly by location. For example, average rent in Vailsburg is just over 900 dollars a month while rent in West Side

Newark is twice that, coming in at 1800 dollars a month. For a three bedroom home, rents go for around 1700 a month, while four bedroom homes command around two thousand dollars a month.

Snap up a home whose owners are “mortgage burdened” and struggling to make the payments or on the edge of foreclosure, and you’ll see significant returns on a property where the rental rates and property values are going up.

4. It Is More Landlord-Friendly than New York

The Newark housing market is often going to be compared to New York. New Jersey like New York has somewhat favorable tenancy law, but the eviction process is more favorable to landlords.

When someone hasn’t paid the rent, they receive one notice and then have ten days to prepare for the courts that regularly issue eviction notices. There is rent control in the Newark housing market, but it isn’t as severe as NYC. Rental increases are allowed at the CPI-U percentage.

5. The Newark Rental Market Is Huge

An estimated two thirds of residents are renters, though some estimates put this as high as 80 percent. Newark is dominated by older buildings, so roughly half of these renters live in small apartment buildings with two to four units.

One reason for the wide variation in estimates is discrepancies in counting someone who owns the building, living there while renting out two to three other units. This creates an unusual opportunity for investors in who want to buy rentals in the Newark real estate market.

A four-plex is much cheaper than a 50 unit apartment building, and there are far fewer regulations that apply to you, as well. You also have the opportunity to buy these smaller apartment complexes from landlord-owners who need to move or want to retire.

6. The Tax Differential Drives Demand for Rentals

New York state has one of the highest tax burdens in the country, and New York City levies a city income tax on top of that. This is one reason why so many people choose to work in NYC but live in the Newark real estate market despite the commute.

If you do have to pay taxes because you commute, New Jersey lets you count that as a dollar for dollar credit against your (lower) New Jersey tax bill. This dramatically increases the number of renters in the Newark housing market.

7. The Property Tax Situation Can Benefit Landlords

New Jersey has the highest overall property tax rate in the country – 2.44 percent. This does mean that there are far more opportunities to snap up a Newark real estate investment property via tax lien investing as well as bankruptcies and foreclosures.

However, we need to point out that the more affordable Newark real estate market makes the property tax bill comparable or lower than what you’d pay in New York City.

While the median property tax bill for the entire state of New York is around 5000 dollars versus 8000 in New Jersey, you’d be paying a 1.7 percent property tax on a 750,000 dollar condo in the NYC suburbs versus 2.44 on a 250,000 property in the Newark housing market.

This results in a total property tax bill half that of the NYC property. Conversely, the higher property tax rates than other areas combined with the general public’s relative lack of financial knowledge mean many would rather rent than buy. They don’t want to have to save up and pay the property tax bill.

8. There Are Opportunities for Bargains

New Jersey has become less business friendly over the past few years. The slowly increasing tax burden has driven many residents to surrounding states, as well. This has contributed to a rental vacancy rate and homeowner vacancy rate much higher than the national average.

The homeowner vacancy rate, for example, is 5.2 percent, more than twice the 1.7 percent national average. This means you might be able to find distressed sellers eager to sell a home just to get out from under the payments.

Then you could rent out the Newark real estate investment property with a much higher profit margin, or you could offer it to those in dire need of affordable rentals.

9. There Is a Decent Student Market

Students are an ideal market segment to serve. A Newark real estate investment property catering to students will be able to charge relatively high rents to people who won’t be tempted to move into a single family home any time soon. Furthermore, the Newark housing market has several opportunities for investors.

The New Jersey Institute for Technology, Rutgers University Newark Campus and Seton Hall University School of Law all attract students from across the area. The Rutgers University Newark Campus by itself has nearly twelve thousand students.

10. The Newark Housing Market Is Healing

The Newark real estate market took a beating during the Great Recession. Housing prices fell about 13 percent. However, the property market has rebounded. Local demand due to proximity for jobs is one factor, but the sheer influx of NYC residents who can’t afford to live in NYC is another.

This is why the Newark real estate market saw appreciation in the double digits last year and has appreciated by two thirds in the past five years. Property appreciation in the Newark housing market is expected to be 6 to 7 percent next year.

Newark Real Estate Investment

Maybe you have done a bit of real estate investing in Newark, NJ but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold.

A good cash flow means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt.

Therefore, finding a good Newark real estate investment opportunity would be a key to your success. in If you invest wisely in Newark real estate, you could secure your future. If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate.

The less expensive the Newark investment property is, the lower your ongoing expenses will be. Roughly a $150,000 property is what some experts recommend starting with.

Most investors naturally gravitate to residential property investment. When looking for the best real estate investments in Newark, you should focus on neighborhoods with relatively high population density and employment growth.

Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable.

You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Newark, NJ. The Newark area is seeing significant growth and appreciation because of pressure coming from New York City itself.

This drives up rental rates and property values. The relatively affordable real estate market, more amenable tax and business climate and predictable growth should make it worth further investigation.

Buying an investment property is different from buying an owner-occupied home. Whether you are a beginner or a seasoned pro you probably realize the most important factor that will determine your success as a Real Estate Investor in Newark, NJ is your ability to find great real estate investments in that area.

According to real estate experts, buying in a market with increasing prices, low interest, and low availability requires a different approach than buying in a cooler market.

Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.

NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.

Newark real estate investment

The aim of this article was to educate investors who are keen to invest in Newark real estate in 2019. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.

Other Best Places To Invest in Real Estate in 2019

The other best place to invest in real estate is Richmond, VA. The Richmond area is historic, but it is already a modern city embracing smart growth and development. Richmond is a stable housing market that offers good returns without massive regulation or heavy taxes.

The main reason you would buy a Richmond real estate investment property is for the rental income. However, the more important factor is the return on the investment. In this regard, the Richmond housing market shines. The median rental rate is roughly 1300 dollars a month for an apartment.

Another sizzling market to choose for investment is the Greensboro real estate market. The Greensboro real estate market offers an ideal situation for investors seeking steady, predictable returns. Return on investment is relatively high and not expected to decline, while property itself is relatively cheap.

The job market is strong enough to slowly attract residents and increase pay rates, but it won’t result in a massive influx of new construction to undermine existing property values. The area is large and diverse enough to give investors a choice of property types and markets to serve.

The Greensboro real estate market is incredibly affordable. The median home price is 161,000 dollars. This is one fourth lower than the average home price for the country as a whole. And that’s despite Greensboro real estate having appreciated at four to five percent a year for the past few years.

Let us know which real estate markets you consider best for real estate investing! If you need an expert investment advise, you may fill up the form given here. 

One of our investment specialists will get in touch with you to discuss all facets of searching for, buying, and owning a turnkey investment property.


*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.

References:

Healing/appreciation
https://www.bestplaces.net/housing/city/new_jersey/newark

Huge rental market
https://www.cnjg.org/sites/default/files/files/events/Housing%20in%20Newark%20-%20Status%20and%20Trends.pdf
https://www.bestplaces.net/housing/city/new_jersey/newark

Landlord friendly
https://www.njspotlight.com/stories/18/08/02/interactive-map-eviction-filings-dip-to-lowest-level-in-more-than-a-decade/
https://www.newarknj.gov/departments/rentcontrol

Affordable real estate
https://livability.com/nj/newark
http://www.city-data.com/city/Newark-New-Jersey.html

Attractive to millennials
https://livability.com/nj/newark

Student market
https://wikitravel.org/en/Newark_(New_Jersey)

Taxes
https://pocketsense.com/tax-advantages-new-jersey-vs-new-york-city-9753.html

Property tax
https://wallethub.com/edu/t/states-with-the-highest-and-lowest-property-taxes/11585

Opportunities for bargains
https://www.forbes.com/sites/andrewdepietro/2019/04/16/cities-negative-equity-housing-crisis-2019/#69511ba67189

Rental ROI
https://www.rentcafe.com/average-rent-market-trends/us/nj/essex-county/newark

About Newark
https://en.wikipedia.org/wiki/Metropolitan_Statistical_Areas_of_New_Jersey

Housing Market Data, Trends & Statistics
https://www.zillow.com/newark-nj/home-values
https://www.trulia.com/real_estate/Newark-New_Jersey
https://www.redfin.com/city/13136/NJ/Newark/housing-market
https://www.movoto.com/newark-nj/market-trends
https://www.neighborhoodscout.com/nj/newark/real-estate
https://www.realtor.com/realestateandhomes-search/Newark_NJ/overview
https://www.realtytrac.com/statsandtrends/nj/essex-county/newark


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