Real Estate Investment in New Jersey

Why Invest in New Jersey?

New Jersey offers decent opportunities to those who are looking to invest in real estate. Whether it is a single-family home in the suburbs, an urban high-rise dwelling, a beachfront cottage, or a commercial property, the Garden State has it all.

One of the most energetic real estate markets in the United States, New Jersey boasts beautiful expansive beaches, national parks, and rich culture. This makes it a perfect home base. The state is home to 21 counties and 52 cities, the major cities being Trenton, Newark, Jersey City, Peterson, and Elizabeth.

Moreover, the state is strategically located for international trade. With over 2800 miles of highway, at least a dozen commuter rail lines, and about 1000 miles of freight line, people and goods can easily move between New Jersey and the rest of North America.

Besides world-class infrastructure, the state is also home to many industries and corporations. Due to this, there is a continuous flow of people moving into the state with employment in these companies.
With 112 state hospitals and 71 acute care hospitals, New Jersey residents can get great healthcare right in their backyard.

From the end of the recession in 2009 through mid-2018, the real estate market in New Jersey was on an upward trajectory.

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Investment Considerations for New Jersey Real Estate

  • Surging Foreclosures– New Jersey has the highest foreclosure rate in the United States. The recent property tax revaluations could drive the rates even higher. And this is expected to benefit the state’s housing market. Namely, the current revaluation could potentially lead to a significant increase in property taxes, particularly in the downtown area of Jersey City. Many residents could be unable to pay the increased taxes. Consequently, real estate investors who are looking to help distressed property owners would get an investment opportunity. This would also help stabilize the besieged neighborhoods.
  • Perfect Location for Global Trade – Strategic location, unmatched transportation infrastructure, and a highly educated talent pool, the Garden State is primed for international trade. In fact, the state is endowed with five strategically located Foreign Trade Zones, as well as two international airports and ports at either end of the state. These include Port Authority, North America’s third busiest port.
  • High Rental Demand– Many people in New Jersey no longer qualify for a mortgage. Many previous, financially incapacitated investors have lost multi-family homes to foreclosures. The market is quite promising for real estate investors who can renovate and convert these homes into rental properties.
  • Weather Disasters– February 2018, New Jersey’s job market added 15800 and its unemployment rate fell to 4.6 percent. The new jobs being injected into the market and the economy recovering since the end of recession contribute to the positive sentiments towards real estate.
  • Improving Employment Rates– The state of Iowa is prone to floods, many of which have caused agricultural and economic losses worth billions of dollars over the years. Besides direct damage to fields and roadways, floods have a cascading effect that often includes a decrease in property values in the affected areas.
  • Low Property Crime Rate– New Jersey has a great reputation for cracking down on crime and upholding the safety of her residents. In fact, the Garden State has the third lowest property crime rate in the United States.
  • Top Schools– Anyone who wants their children to get a great education should consider moving to New Jersey. The State boasts top-rated schools. It is also home to 63 colleges and universities, which include the U.S. News and World Reports’ top-ranked Princeton University.

 

Despite all of these positives, the New Jersey real estate market has some negatives aspects to keep in mind, including:

  • High demand and limited supply have pushed property prices beyond where they were at the beginning of 2016. And new developments are still lower than historically normal levels. This keeps upward pressure on prices.
  • Foreclosures The overall numbers in the real estate may have improved, but the Garden State continues to be among the frontrunners in both foreclosures and troubled mortgages. According to academics, foreclosures continue to undermine the state’s real estate market and economy.
  • Unforgiving Market for Entry-Level Buyers Besides being subjected to bidding wars, entry-level buyers are also experiencing rising mortgage interest rates. In fact, the average rate on the 30-year fixed stands at its highest in over years and is showing no signs of falling back.

What are the Best Markets to Invest in New Jersey?

Some of the areas in the Garden state exhibiting the greatest potential for real estate investment opportunities include Jersey City, Hoboken, and Newark. For example, Forbes has predicted 12% rise in home prices in Jersey City over the next 3 three years.

Besides having an easy access to New York City, the city is also currently experiencing an inflow of new business development, making it attractive to real estate investors on both sides of Hudson River.
While Hoboken presents high prices of properties, the city boasts the strongest sales in the Garden State. The demand for real estate in Hoboken remains high, thanks to its access to good schools, the influx of new business, and proximity to the Big Apple.

In light of these factors, opportunities for purchasing and selling distressed properties in Hoboken promise to deliver a great return on investment. Newark, on the other hand, is currently enjoying the lowest crime rate in 50 years. The city is also experiencing an influx of new business.

What’s more, Newark has direct access into Manhattan. These factors are contributing to an explosion of the population looking to buy property. If you’re looking to buy and hold, Newark could be the ideal place to invest in.

Growth opportunities also exist in the strongest appreciating markets of East Orange, in Essex County; Chatham, a Morris County borough; Rutherford Township in Bergen County; Maplewood, in Essex County; and Strathmere in Cape May County.

If you’re looking for cash flow, the highest yielding markets include Gloucester City, Willingboro, and Roselle, especially for fix and flip investors.

 

Getting Started in Real Estate Investing?  HomeUnion® Can Help

HomeUnion® Investment MapHomeUnion® is the leader in residential real estate investment. With the use of big data and machine learning, we analyze information on millions of single family homes in New Jersey; and across the United States and calculate home values INVESTimate® for every property in New Jersey. If you’re looking for the best investment properties across the country, visit our comprehensive investment site.

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