Jersey City, sandwiched between Newark and New York, has had an interesting couple of years. This metropolitan area has always been a hot spot for jobs, commuters, college students, and travelers alike. The recent pandemic, however, caused an uproar in the real estate market in these areas, with the cities just now finally seeing a more promising outlook.
Current Jersey City Market Conditions
- Median home prices have seen a steady increase, but rental prices have decreased.
- Although construction costs have continued to rise, builder sentiment and construction jobs also have risen year-over-year.
- There has been an increase in employment but a decrease in households.
Buying a House in the Jersey City area
Jersey City home prices
Jersey City median home value: $635,000
National average: $371,000
Home prices in this area have continued to rise in recent years. With a median home value of $450,000 in 2016, values have increased by almost $200,000 in 5 years. Median prices have gone up 10.4% since just last year. Though national home prices have gone up 22.4% year-over-year, this metropolitan area is already an area of high value, with home prices much higher than the national averages.
Jersey City Housing Supply
The housing supply in the Jersey City metropolitan area is much higher than the national average. Here, there is a 4.8-month supply. Nationally, there is only a 1.1-month supply. Although the housing supply has dropped by half since this time last year, the Jersey City, Newark and New York area still is seeing higher supply simply because of the sheer amount of housing located here and because so many people have left the area because of the pandemic. Working remotely is such an easy and viable option now. People living in the city for jobs have the option to move out to the suburbs or other parts of the United States and continue working or collecting unemployment.
The suburbs are seeing an increase in households, while urban areas like these are seeing a decrease. This metropolitan area alone saw a decrease of more than 180,000 households year-over-year, compared to a decrease of 128,000 households nationally. For buyers and investors, this means it could be a good time to get into this market. The odds of it making a comeback are high, as the pandemic gets further behind us and people go back to in-person work. Sellers will do well because the median price has risen, although there is more competition with a decent amount of homes currently on the market.
Buying a Rental Property in Jersey City
Jersey City, New York and Newark are widely known for their rental markets. The prices vary by location and access to public transportation. With an expensive real estate market, numerous nearby colleges, job changes and lots of tourists, this area generally sees a need for a lot of rentals. Over the past year, though, rental vacancies have gone up, and rental prices have gone down.
Jersey City Rental Rates
Jersey City median rental price: $2,507
National average: $1,704
Over the past 5 years, rental rates have been around $2,500 and stayed there pretty steadily, while on a slight upward trend since 2018. Rates began to increase more in 2019, heading to more than $2,700. In mid-2020, there was a notable dip in prices. But, rental rates are on an upward trend once again. Rates are down 6.7% since this time last year but are improving. Nationally, rental rates already have been working their way back up, with a 3% increase year-over-year. As travel bans are lessened and people return to their city lives, rental rates will continue to see increases. This means good things for real estate investors looking to purchase rental properties in this area.
Jersey City Rental Vacancies
Jersey City rental vacancy: 6.5%
National average: 6.8%
Rental vacancies were at an all-time low for Jersey City in April 2020. From there, it has continued to rise rather quickly. Vacancies are up 3% year-over-year for the Jersey City area. Nationally, rental vacancies also have risen but just 0.08% in the last year. While Jersey City vacancies are up, they have reached a plateau since January 2021. This is great news for investors, as there is a good chance that vacancies will fall after this plateau. Purchasing a rental property right now may be a little sketchy though. Home prices have increased, rental prices have decreased, and vacancies have increased. Although the vacancies are still low and have plateaued, it may take a little time to really see the increase in rental prices that investors are after.
Jersey City Foreclosures
Jersey City foreclosure rate: 1.2%
National average: 0.3%
Foreclosure rates have continued to drop in the last 5 years both nationally and in this metropolitan area. They have both seen a decrease of 0.1% year-over-year as well. With the foreclosure rate this low, it means that there isn’t an abundance of foreclosures in the area. For this market, it’s a good thing because there aren’t a lot of vacant, distressed homes. For investors, it means it’s even harder to score a great deal.
Jersey City Neighborhoods
The Dudley Street and Warren Street area is the most expensive neighborhood in Jersey City. With a median sale price of just less than $1 million, this neighborhood is more expensive than 96.3% of other neighborhoods nationwide. Rentals here go for a whopping $5,655 per month. Qualifying as urban because of population density, this wealthy area is made up of mostly newer apartment buildings and high-rise apartments ranging from studios to 3- or 4-bedroom homes. More than half of these residents commute to work on a train, while 12.6% travel on a ferry. Occupations of these residents are mostly professional and executive-level jobs.
A much more reasonably priced part of Jersey City is Bergen. These homes are priced around $462,093 with rentals just over $2,000. This urban neighborhood is made up of mostly older apartment buildings and high rises. Many were built before 1939 and are considered historic. While nearly half of these households do not own a car, public transportation is heavily relied upon for commuting to their place of employment. Residents here hold jobs in executive and professional occupations as well as sales and service jobs. A culturally diverse neighborhood, Bergen is considered middle class with a substantial amount of poverty.
West Bergen is a densely populated urban neighborhood in Jersey City. Median home prices are lower, at $355,483, while the rental prices are higher at $2,313. This is a well-established neighborhood made up of smaller apartment buildings and single-family homes. There is a mixture of owners and renters here, with a 7.6% vacancy rate. West Bergen is an ideal location if you are looking for walkability and easy access to public transportation. It’s actually in the top 5% of U.S. neighborhoods when it comes to walkability. There is a wide range of occupations among residents here. They range from professional and clerical to tech support and fast-food workers. Nearly 20% of the households are supported by single mothers.
Jersey City Economic Condition
Employment rates are continuing to soar this year, showing a healthy and promising outlook for the coming months. The number of jobs is up 966,700 year-over-year, though the unemployment rate has risen slightly but has been declining since February.
Jersey City Unemployment
Jersey City unemployment rate: 8.8%
National average: 6.1%
The unemployment rate had been declining in the years before 2020. After the spike in unemployment as a result of the pandemic, this area is still struggling with getting numbers down to where they were before. It actually has seen a 4.7% increase year-over-year and is just now beginning to head back down. Unemployment rates nationally have had a similar run over the last few years. Since this time last year, however, the national average has seen an 8.7% decrease in unemployment. While the unemployment rate in Jersey City is still higher than desired, it is trending downward.
Jersey City Top Employers
Many people that reside in Jersey City work in New York City. They commute by trains, buses and the ferry. It’s worth it to live in Jersey City when you take into consideration the less expensive apartments with the beautiful views of Manhattan and easy commute.
Financial and banking services are the largest companies in this metropolitan area. JPMorgan Chase & Co. (NYSE: JPM) employs almost 250,000 people in its multinational business. It’s the largest bank in the United States and has assets worth more than $2.5 trillion. Citigroup (NYSE: C) is the next largest employer with 219,000 employees. Like JP Morgan Chase, it also offers investment banking services and impressively holds more than 200 million customer accounts.
Additionally, there are several major hospitals, universities and airports in the Jersey City area that contribute to the increase in employment opportunities. Some popular ones are New York-Presbyterian Hospital, Cornell and Columbia universities and Newark Liberty International Airport.
The Bottom Line on the Jersey City Real Estate Market
After a tough year, the Jersey City real estate market is getting back on track. Median home prices are higher than in recent years, and employment opportunities are on the rise. In time, the rental market and number of households should even out again. Big cities like this were hit hard from the pandemic, but are expected to make a comeback.
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