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The Ins & Outs of New Jersey Real Estate

New Jersey offers excellent opportunities for real estate investors. It doesn't matter if you want a single-family home in the suburbs or an urban, high-rise dwelling. New Jersey offers a vibrant market for real estate, which saw an uptrend between the 2009 end-of-recession and mid-2018.

The state boasts gorgeous beaches, serene national parks, and rich culture deeply ingrained in its 21 counties and 52 municipalities. The state’s largest cities include Trenton, Newark, Jersey City, Peterson, and Elizabeth. 

For international commerce, New Jersey is a strategic location. The state has more than 2,800 miles of highway, about a dozen commuter railroad lines, and approximately 1,000 miles of freight lines. These make it possible for goods and people to easily travel between New Jersey and the rest of North America.

The state also has an excellent infrastructure with great healthcare options right at its residents’ doorsteps. It is home to numerous industries and corporations, along with 112 hospitals and 71 acute hospitals, resulting in and allowing for a steady stream of people coming to the state looking for employment in these corporations.

Whether you search for a house or plan to invest in New Jersey’s real estate offerings, it is undoubtedly a great place to call home.

New Jersey real estate investment considerations

In February 2018, New Jersey saw an increase of 15,800 jobs and a drop in unemployment to 4.6 percent. New jobs created a more positive look at purchasing real estate, which has increased economic recovery since the recession.

The Garden State is the perfect place for global trade. It's strategically located, with unmatched transportation infrastructure, a highly educated talent pool, and five Foreign Trade Zones. Additionally, there are two international airports or ports at each end. Port Authority is North America’s third-busiest port.

Anyone who wants their child to receive a top education should consider New Jersey. It is home to 63 colleges and universities, among which are top-rated schools, including Princeton University, ranked number one by U.S. News and World Reports.

Negatives of the New Jersey real estate market 

High demand and low supply have driven property prices to levels not seen since early 2016. The number of new developments is still below the historical average, causing upward pressure on prices. Despite improvements in real estate sales, the Garden State still ranks among the top performers in foreclosures and mortgage problems. According to academics, the state's real property market and economy are still hampered by foreclosures.

Besides the bidding wars, buyers at the entry-level are also affected by rising mortgage interest. The state’s 30-year fixed-rate average is the highest in over 20 years and shows no signs of falling.

New Jersey's flood risk is also high. Numerous flooding events have led to economic and agricultural losses of over $1 billion. Floods cause direct damage to roads and fields and cause a cascading effect that often leads the affected areas to lose their property value.

The top markets for investment within New Jersey

Jersey City, Hoboken, Newark, and other areas of the Garden State offer the best real estate investment opportunities. Forbes estimates that Jersey City will see a 12 percent increase in home prices over the next three years.

It is easy to get to New York City from New Jersey in various ways, and the city is also experiencing new business developments. New York City, as a result, has become even more attractive to real-estate investors on both sides of the Hudson.

Hoboken's property prices are high, but the city sees the highest sales in the Garden State. Hoboken continues to be a hotspot for real estate because of its accessibility to top schools, influxes of new business, and its proximity to Manhattan.

Hoboken's opportunities for buying and selling distressed properties will undoubtedly bring a significant return on your investment as well.

New Jersey real estate agents

Two real estate agents will usually be involved in property sales in New Jersey. The seller's agent, also called the listing agent, is responsible for representing the home seller.

The buyer's agents represent the buyer of the property and determine the home's final sale price. This payment, known as real estate agent commission, is included in the final price for your home when it sells. New Jersey averages 50.0% commission to the listing agents and 50.0% to buyers' agents.

Are 2022 and 2023 good years to buy a home in NJ?

If you're willing to invest, 2022 may be a great year for buying a home in Jersey. However, it can be the wrong time if you're not ready to set aside the money for a purchase. Don't let housing market events dictate your buying decisions.

These are your qualifications to buy a home, no matter what happens in the market:
  1. You're debt-free.
  2. You should have an emergency fund for three to six months' expenses.
  3. Your monthly home payment will equal 25% of your monthly take-home pay.
  4. A 10-20% downpayment is required.
  5. You can pay for the closing costs upfront.
You don't have to meet these requirements, even if the market favors your case. A home purchase right now could be a curse, not a blessing. Take your time, and make sure you have the financial resources to purchase a home properly.

What does it all mean for a New Jersey home seller in 2022?

Sellers in 2022 can feel pretty confident about their homes. If this describes you, you might consider putting your house up for sale sooner than later. While inventory is low, you can still make a profit. However, you should only do it if your home is ready for sale. Don't let the market dictate your decision!

There may be more competition if you intend to sell in 2022 as foreclosures rise and home prices increase, but the good news? There are still many buyers. You'll be able to maximize your home’s worth, negotiate multiple offers, and ultimately find the right buyer if you partner with an experienced agent. A professional will make it easier to sell your house for a reasonable price.

Are you looking to buy or sell a property in New Jersey?

Should you choose to dive into New Jersey real estate, you will likely be up against heavy competition, high housing prices, and possibly even a bidding battle with more buyers than sellers.

Another problem is that signs indicate that the low inventory issue will be around for a while. Last fall's home inventory rose slightly, reaching a nearly seven-month supply. However, the stock declined to just 1.8 months at the end of last year.

Still, buyers also have a bright side. The interest rates for mortgages look just as good as a blue snow cone on a hot summer day. As we said, they are slowly rising and will likely increase in 2022. You'll still be able to lock in a much lower mortgage rate than the average.

Connect with Emily Lafrinere to get the best real estate investment opportunities in New Jersey. Contact Emily today to find your next home in the Morristown, Mendham, or Bernardsville neighborhoods!


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