Last 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. But according to the latest market trends in the state, growing home prices and high mortgage rates continued to dampen home sales in New Jersey in May 2022. The closed sales in the state decreased by 8.7% as compared to the same month of the last year.
The year-to-date sales in New Jersey state were 28,320, down 14% from last year. New Jersey is still a seller's market. The months' supply of inventory for single-family homes has shrunk to 2.4 months, down 4 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 $490,000, a 12.6% gain from last year when it was $435,000.
New Jersey Housing Market Trends 2022 (Latest Data)
According to Zillow, the typical value of homes in New Jersey is $461,990 as of May 2022. This value is seasonally adjusted and only includes the middle price tier of homes. New Jersey home values have gone up 15.8% over the past year. Last year at this time, ZHVI for New Jersey was $399,000. According to Redfin, New Jersey home prices (statewide) were up 11.1% year-over-year in May 2022. At the same time, the number of homes sold fell 7.8% and the number of homes for sale fell 10.6%.
These are the latest trends in the New Jersey housing market (Source: NEW JERSEY REALTORS®)
NJ REALTORS® provides 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 (May 2022 vs May 2021 ).
- Single Family Closed Sales were down 8.7 percent to 6,430.
- Townhouse-Condo Closed Sales were down 6.5 percent to 2,306.
- Single Family Median Sales Price increased 12.6 percent to $490,000.
- Townhouse-Condo Median Sales Price increased 9.1 percent to $349,000.
- Single Family Average Sales Price increased 12.8 percent to $621,816.
- Townhouse-Condo Average Sales Price increased 11 percent to $448,288.
- Single Family New Listings were down 8.8 percent to 10,269.
- Townhouse-Condo New Listings were down 8.7 percent to 3,175.
- Months' Supply for Single Family was down 4% to 2.4 months.
- Months' Supply for Townhouse-Condo was down 17.2% to 2.4 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 $606,537 (ZHVI). Jersey City home values have gone up 8.3% 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 $45,000 (+9.1%) in the median sales price and a +31.8% growth in home sales over the past year. The median sales price for homes in Hudson County for May 2022 was $540,000 based on 87 single-family home sales.
- New Listings of single-family homes dropped by 5.1 percent year-over-year.
- Closed Sales of single-family homes increased by 31.8 percent year-over-year.
- Days on Market Until Sale increased by 10 percent to 44 days.
- Median Sales Price rose by 9.1 percent to $540,000.
- Percent of List Price Received rose by 0.8 percent to 101.2%.
- Inventory of Homes for Sale dropped by 24.2 percent year-over-year.
- Months Supply of Inventory dropped by 19.4 percent to 2.9 months.
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, 103,880 total housing units (homes and apartments), and a median house value of $556,051, 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: $645,000, trending up 8.4 year-over-year (On Realtor.com)
- Price Per Sqft: $586
- Median Sales Price: $359,000.
- Homes in Jersey City, NJ sold for approximately the asking price on average in April 2022.
- On average, homes in Jersey City, NJ sell after 68 days on the market.
- The trend for median days on market in Jersey City, NJ has gone down since last month, and slightly down since last year.
- The Waterfront has a median listing home price of $947,000, making it the most expensive neighborhood in Jersey City.
- Journal Square is the most affordable neighborhood, with a median listing home price of $360,000.
As per the real estate company named Redfin, the Jersey City housing market is somewhat competitive. In May 2022, Jersey City home prices were up 7.5% compared to last year, selling for a median price of $630K. On average, homes in Jersey City sell after 26 days on the market compared to 43 days last year. There were 226 homes sold in May this year, up from 221 last year.
- Sale-to-List Price was 100.7%.
- 40.7% of Homes Sold Above List Price.
- 15.8% of Homes were sold with price drops.
- Some homes in Jersey City get multiple offers.
- The average homes in Jersey City sell for around the list price and go pending in around 26 days.
- Hot listings can sell for about 3% above the list price and go pending in around 11 days.
Jersey City Real Estate Market Forecast 2022
The real estate data from Zillow shows that the typical home value in Jersey City is $606,537. From 2019 to 2020, home prices were up by about 7.2%. From 2020 to 2021, home prices were up by about 5.2%. Jersey City home values have gone up 8.3% over the past twelve months 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 $609,114.
- New York-Newark-Jersey City metro home values have gone up 13% over the past year.
- The New York-Newark-Jersey City metro housing market forecast ending with May 2033 is positive.
- Zillow predicts that New York-Newark-Jersey City metro home values may grow by 6% by May 2023.
- If this forecast is correct, New York-Newark-Jersey City metro home prices will be higher in the 3rd Quarter of 2023 than they were in the 3rd Quarter of 2022.
- The typical home value of homes in Jersey City is $606,537, up 8.3% over the past year.
- The typical home value of homes in Newark is $408,152, up 15.1% over the past year.
- Hudson County's home values have gone up 8.9% (current = $577,120).
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 119.82 percent over the last decade, equivalent to an average annual appreciation rate of 8.19 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 14.70 percent. From the most recent quarter, house appreciation rates in Jersey City were 5.62 percent, equating to a 24.44 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
- Downtown Northwest
- Harsimus Cove West
- Hamilton Park
- Harsimus Cove
- Magnolia Ave / Baldwin Ave
- Hamilton Park East
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 July 05, 2022, the average rent for a 1-bedroom apartment in Jersey City, NJ is currently $3,314. This is a 77% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Jersey City decreased by -3% to $2,585. The average rent for a 1-bedroom apartment increased by 5% to $3,314, and the average rent for a 2-bedroom apartment increased by 17% to $3,990.
- The average rent for a 2-bedroom apartment in Jersey City, NJ is currently $3,990, an 81% increase compared to the previous year.
- The average rent for a 3-bedroom apartment in Jersey City, NJ is currently $2,600, a 24% increase compared to the previous year.
- The average rent for a 4-bedroom apartment in Jersey City, NJ is currently $2,999, a 35% 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 where 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 in 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.
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.
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