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New Jersey Housing and Rental Market

March 13, 2023

New Jersey Residential Real Estate Market 2023

New reports show New Jersey may be the leading rental market in the USA for price and  demand.

NJ’s proximity to metro NYC and Philadelphia elevates the interest in its residential real estate stock, and consequently for available rental housing in its many small to medium-sized cities. Are landlord investors interested too?

It’s not much of a surprise to anyone in the Boston/New York/New Jersey/Connecticut region as housing in the Northeast US is at a premium. Stats show this region has the highest rate of renter households thus presenting plenty of opportunity for landlord investors.  Newark, New Jersey registers the highest share of renters at above 79% while 5 other New Jersey cities completed the top 6 for the whole nation.

What’s New Jersey’s Hot Market All about?

For investors outside the region, New Jersey remains a mystery cloaked in complexity, taxation, costs, and high priced risk.  Opportunity exists, yet will investors take this one on?

WinnCompanies is. Their new planned 115 apartment complex of luxury and affordable units is built with the work-from-home buyer in mind. According to a Multihousingnews report, The Alice amenities will include stainless steel appliances, washers and dryers, private balconies or patios, sound-proof walls and flooring, and EV charging spaces. It’s set for a summer 2024 completion.

With work from home employment changes, the nature and beaches of the Atlantic coast might look enticing to homebuyers who never gave this state a chance before.

Prices Among the Highest in the Nation

Even while sales dropped during February, the prices of homes and properties rose.

Like most housing markets in the US, New Jersey’s housing market forecast is clouded by a lack of homes and rental unit supply, along with rising interest rates.

Whichever path the NJ market takes, it’s certain there will be shortages of new construction, current home stocks (new listings down 27%), and rentable properties. Yet, as with all problems in a market, it means opportunity for wise investors. Given NJ is such a hot zone for house rentals and apartment rentals, we wonder if it might provide some of the most rewarding opportunities for landlords and property management firms.

New Jersey Home Prices Rising

Looking at the last 8 years, home prices have risen from $268,000 on average to a new record prices of $440,000 for a New Jersey property according to Zillow Stats. House prices themselves rose from $275,000 in 2014 to a new record of $453,000 in February (+6.3% in last year). Given we’re 12 months into a doubling of interest rates, the government is not seeing what it hopes for in reduced house prices.

The New Jersey Association of Realtors reports 3% YoY rise for house prices and a 10% drop for condos.

Hudson County Residential Sales States.

Hudson County Residential Sales States. Screenshot courtesy of

Using the Hudson County (Jersey City) stats provided via the NJAR publicly available report, we see home sales are down 50% YoY, yet prices are up 3.3% and DOM has fallen 4%, while home inventory is down 19.3%. Fewer homes are available due to rising mortgage rates, which stops sellers from selling, because they’ll have to pursue a new mortgage at above 6% now. As rates rise in 2023, even fewer homeowners and landlords will consider selling. ranks the state of New Jersey 5th in average rent prices at $2368 per month. Only Hawaii, Washington DC, California and Maryland have higher average rents. They rate them higher than NYC rents.

What’s confusing about New Jersey is how it’s viewed as a collection of cities, and not referred to as a geographic region or state. Your own research will lead you to stats about Jersey City, Middletown, Atlantic City, Newark, Paterson, Edison, and many others. The volume of small cities obscures the overall market across the state.

New Jersey Rent Prices

With limited availability combined with reduced new construction along with big demand from NYC and Philadelphia, it seems rents might have some support.

Jersey City, the largest city in NJ has the 4th highest overall rent prices in the nation at an astonishing $2980 per month. Astonishing because New Jersey is not known as a wealthy state. The good news for renters is an 18% rent price drop year over year, yet monthly growth is back at it again, with a 4.8% lift from January. And in Newark NJ, average rents are high as well at $1450 for 1 bedrooms and $1800/month for 2 bedroom units.

2 Bedroom Rent Prices in New Jersey last 8 Years

New Jersey Home Prices History Timeline.

New Jersey Rent Prices, 2 Bedrooms.  History Timeline. Screenshot courtesy of Zillow.

Based on the stats, NJ is up there for strong rents based on demand from the highly employed workforce in the New York/New Jersey region. And the nearby Philly market is doing well.

Demand from high priced New York City and its high taxes, crime, and political tensions, are moving New Yorkers to look into the lower priced neighborhoods of Jersey for relief. Renters are migrating, and perhaps that flow of workers who must rent can’t be easily discouraged. Trends create momentum mindsets that are tough to stop.

If new construction is weak and the economy continues to recover, we can expect New York City rents to rise again. You can’t really talk about New Jersey’s rental market without reference to the New York rental market.

Supporting Demand from New York City

With the Tech sector issues in San Francisco and the Bay Area pulling prices and rents down there, New York now stands alone as the city with the highest priced rents. New York City still tops Zumper’s most expensive cities for renters with 1 bedroom rents hitting a whopping $3550 per month and $4,000 per month for two bedroom units.

Those prices are down 3.8% month to month, yet are still up 14% and 21% respectively year over year.

New York region home prices.

New York region home prices. Screenshot courtesy of FRED.

Despite the small correction last month, the New York market seems well supported with still near record home prices, peaking only a few months ago.

NAR’s Nadia Evangelou, senior economist and director of research at the National Association of Realtors, anticipates a better year in 2023:

It seems that home sales activity has bottomed out, and 2023 will be the turning point for the housing marketWe don’t expect any housing crash” she said in a recent Business Insider article.

While 4 million homes were available nationally for sale after the last recession, only 1 million are available this time. The lack of housing supply in every city is believed to make a market crash unlikely, meaning the outflow from NYC will likely continue and keep prices and rent prices elevated in New Jersey.

Rising prices will keep pressure on New Yorkers to keep searching in New Jersey cities for affordable units.

A report on forecasts better apartment demand in 2023 compared to 2022 with a multi-decade high in lease-ups hitting the market. The report suggests demand is highly unlikely to keep up with supply creating a market shift in favor of renters, and that class B properties should see comparatively more demand than class A properties.

The FED Pushing for a Recession

The big picture factor is the state of the US economy and the possibility of a recession. Most forecasters believe a recession is unlikely yet others speak of a pullback in July 2023.

The FED is hoping to undermine the tight labor market with painful interest rate increases, to curtail demand for homes, furniture, and mortgages, thus suppressing investment in production. Even with lower demand, stagnant supply in the next few years will support higher rent prices.

The financial problems of the US government will play a big role in the 2023 economy too. It looks as though the Biden admin is anticipating a $6 trillion dollar budget spend which would of course add to the inflation the FED is hoping to suppress, yet help the economy avoid a crash.  Without a hard landing and a crash scenario, interest in rental property should remain intact.

If rates climb much higher, will it damage NJ’s housing market or just give it a boost?

Is investing in New Jersey Rental Property a Wise Idea?

High revenue, high cost, high regulations means your automated accounting solution will get a workout.

Mashvisor published its stats on the NJ market:

Monthly Traditional Rental Income: $2,274

  • traditional cash on cash return: 1.82%
  • traditional cap rate: 1.86%
  • price to rent ratio: 22

Mashvisor believes New Jersey home prices will appreciate in 2023. A price to rent ratio of 22 is not ideal, yet it helps to encourage renters to continue renting while leaving the market for the investor class.

Recap of the NJ Market Potential

Although there’s lots of negative sentiment on the NJ market, it seems to have some resilient demand, and so far hasn’t headed downward in 2023, despite 12 months of FED rate increases.

Despite a drop in national rates, NJ home prices are up year over year to new record levels.  Rent prices might be poised to reach last summer’s record levels as the seasonal demand picks up. Last year’s market took off about this time.

Explore more on other housing markets including Atlanta, California, Nashville.  Looking to optimize your property management processes this year?  How about visiting us at the next property management conference?  We’ll be at the Apartmentalize Conference in Atlanta in June, and the CAI Community Association Conference in Dallas in May.  Hope to meet you at our Expo booth!


Explore how the ManageCasa Property Management Platform will help you manage your New Jersey properties more profitably.

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 (* none of the above content should be construed as investment advice and is the opinion of the author, and is not necessarily representative of ManageCasa Inc. and its affiliates and partners)

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