From its Manhattan-adjacent suburbs like Jersey City and Hoboken that attract New York commuters, to the seaside enclaves of Asbury Park and Cape May, New Jersey gives homeowners a wide variety of housing options. They all have one thing in common, however: they’re getting more expensive by the day.
As of September 2020, the median home price statewide reached $375,000, up 21% year over year. There were also nearly 30% more closed sales and almost 50% more pending sales than the previous September.
Making Moves from New York
Like many other areas of the country, the coronavirus pandemic spurred moves as New Yorkers sought an escape from the cramped quarters of the city. A recent Coldwell Banker poll of New Jersey real estate agents found that the most popular cities for homebuyers in 2020, which include Westfield, Montclair, Wyckoff, and Manalapan, share a common thread of large properties with yards that are conducive to remote work and spending time at home with family.
Many cities seeing an influx of homebuyers are quite far outside of the typical New York bedroom communities. As of July 2020, the counties with the biggest increases in sales contracts — Hunterdon, Sussex, Morris, Monmouth, and Cape May — are all located well beyond convenient commuting distance.
“We have an exodus that I have not seen since the 1970s,” Jeffrey Otteau, of the Matawan real estate valuation company the Otteau Group, told New Jersey Monthly. This demand has only highlighted the housing shortage across the state. Between August 2019 and August 2020, inventory decreased sharply — by almost 40% — while the median average home sale prices rose more than 15% during the same time frame.
Even with new construction underway, this is a problem that’s not likely to disappear overnight.
“Unfortunately, in New Jersey, it takes an inordinate amount of time to get through the development approval process,” Michael Canuso, president of the New Jersey Builders Association, told Jersey’s Best. “And our excessively burdensome regulatory practices continue to drive up the cost of housing significantly. As a result, the problems we have with the lack of supply and affordability aren’t likely to be addressed in the short term.”
Costs Climbing Statewide
In Northern New Jersey, which includes Newark, Jersey City, and Hoboken, the median price of single-family homes has grown more than 18% from September 2019 to September 2020, rising from $439,500 to $520,000. Condos here didn’t see as big of an increase, ticking up 6.9% from $335,000 to $358,000. This is likely due to some of the pandemic-related issues of shared space that plague condo-buyers elsewhere.
The southern part of the state is also seeing high demand. Three towns in South Jersey — Stratford, Somerdale, and Washington Township — recently made Redfin’s list of the hottest neighborhoods in the country for 2021, a list determined by a number of factors including growth in listing views from last year, time on market, and number of multiple-offer situations.
And over on the Jersey Shore, sales were up 25% in 2020 compared with that period of time in 2019. The stock of homes in this area has dramatically decreased as well; during one August weekend in upscale Cape May, where the median sale price recently reached $775,000, there were a mere 17 houses listed, a figure that’s usually closer to the 30–50 range. The former gambling mecca of Atlantic City even saw a 71% jump in home prices in December 2020 from the previous year, reaching a median price of $150,000, and spurring discussions about a potential resurgence for the area in terms of casinos and attractions.
With prices soaring across the state, it could be the perfect time to make the most of your New Jersey home’s value with a home equity investment that gives you cash to pay for what’s most important to you, all without monthly payments or interest.
It only takes five minutes to find out if Hometap might be a good choice for you and your New Jersey home.
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