I’m a huge fan of The Honeymooners—the classic TV show filmed in the 1950s. That probably shows my age a bit. But, for the younger followers out there, the show involves Ralph Kramden—a Manhattan bus driver played by the legendary Jackie Gleason—who’s either cooking up a get-rich-quick scheme or trying to pull one over on his wife. In one episode, Kramden and his best friend, Ed Norton meet a newspaper reporter on the street outside the fictional Gotham Bus Company. Norton asks the reporter if a recent question caused a lot of controversy. “Oh, that must have been the one on whether or not the United Nations should outlaw the H-bomb,” the reporter says. “No. No,” says Norton. “This one was: Which is more authentic—the Canarsie or the Weehawken style of mambo?”
Only Carney’s character would view a question on opposing Jersey and Brooklyn dance styles as contentious. But, I guess my point is that, for decades, Eastern New Jersey has shared deep ties with the five boroughs in New York. In the real estate world, those links are accentuated by the high-end home prices that trickle across the Hudson River as well. However, New Jersey’s geographic makeup positions the Garden State as much more than a New York City suburb. Rural living can be had in the mountainous northwestern region that borders the Delaware River and the Pocono Mountains in Pennsylvania. In the southeast, Jersey’s noted 141-mile stretch of seashore extends from Long Branch in the north to Cape May at the southern tip. Naturally, the 2019 housing market forecast in New Jersey highlights some appealing neighborhoods in each of these areas for real estate investment—plus one you might want to avoid.
The 2019 New Jersey Housing Market Forecast
Like any other statewide real estate market, the potential to optimize return on investment depends heavily on location. Some regions merit investigation and others simply don’t. Not only will I explore those cities in New Jersey where you might want to buy investment property, but I’ll also uncover a towns that should probably be sidestepped this year. Check it out.
Thumbs Up: Jersey City
One can’t look at the upscale 2019 New Jersey real estate landscape without first examining the effects of the new federal tax laws. The IRS will now only allow homeowners a $10,000 state and local property tax deduction from gross income. While the new code might not impact the business deductions claimed by investors, the actions of the feds just might create some buying opportunities when property owners can no longer use an uncapped exclusion to help defray their costly New Jersey property taxes. As a result, you might be able to scoop up deals in areas where some analysts expect the downturn in luxury home prices to continue—like downtown Jersey City.
And, you won’t have too much difficulty renting the property out. Jersey City appeals to Manhattan commuters for a number of reasons. Primarily, the trip to the financial district from the west bank of the Hudson takes less time than travel from a few of the nearby boroughs. The Port Authority Trans-Hudson, or PATH, train swooshes passengers to One World Trade Center in about 5 minutes. Furthermore, rents in Jersey City price out favorably to its cross-river counterpart. And, New Jersey residents also pay less in sales tax than New Yorkers. These are just a few of the reasons New Yorkers are fleeing to Jersey City and why you might want to invest there.
Thumbs Up: Orange
The number one rule of real estate investing needs to be heeded: location, location, location. The city of Orange sits about 11 miles west of Jersey City and still provides a manageable commute into the Big Apple. Since property values and rental prices are typically buoyed by livability measures, this New Jersey town seems well-positioned. But, crime rates also tend to be one of the key metrics analyzed by prospective residents before they decide to shell out money for a home. So, crime-ridden cities often experience less growth in median sales prices as well as lower rental rates. And, in years past, Orange often surpassed even Newark with respect to violent crime. Luckily for Orange, crime is finally on the decline—and, that has likely helped to raise median home values.
Although skewed by the pullback in the wake of the 2008-09 financial crisis, the appreciation of Orange home values from 2000 through the third quarter of 2017 only averaged a paltry 1.8% annually. So, for a long while, there was little doubt that investors would have realized a greater ROI in other asset classes or in other real estate markets. By the end of 2018, however, median home values in Orange had adjusted upward significantly—so much so, in fact, that list prices jumped by nearly 47%. And, more gains are expected for 2019. That means you might also experience some good gains, too, by buying, renovating, and reselling a distressed property or two in Orange this year.
Thumbs Up: Haddon Heights
If northeastern New Jersey pairs up well with the nation’s largest city, then Camden County to the southwest also acts as a sister-region to Philadelphia, the sixth-largest city in the United States. Haddon Heights, New Jersey residents enjoy the amenities that suburbia offers, along with easy access to big-city life about a 20-minute drive from the City of Brotherly Love. Haddon homes afford New Jersey buyers a chance to acquire properties less expensively than similar neighborhoods in the Philly suburbs. Median list prices in Haddon come in at $262,500. Compare that value to Lafayette Hill in the Philadelphia metro area where median home prices are almost double that and it’s not hard to see the attraction.
Additionally, the New Jersey township enjoyed a double-digit increase in value through all of 2018, making it one of the fastest-growing neighborhoods in terms of home prices in all of Camden County. Rising foreclosure rates throughout other parts of the state have brought a great number of buyers into the market and Haddon Heights’ prices, unlike the remainder of the county, have been buoyed as a result. Much of the town’s appeal springs from the feel that reflects a small slice of Americana, where small family business thrives, single-family houses populate tree-lined streets, and kids play in their yards. It’s no wonder median list prices have been trending upward by 19.4% year-over-year. Your returns could fare pretty well, too—particularly if you buy single-family homes as investment property.
Thumbs Down: Camden
The last time I visited Camden, my nephew and I ventured from Center City Philadelphia to a concert at the BB&T Pavilion on the city’s waterfront. The PATCO train from Rittenhouse Square across the Delaware River to the Broadway stop in Camden took about a half-hour of travel time. But, the scene at the train stop took about a half-year off my life. The bicycle stalls alongside the depot were makeshift homeless shelters. Some young concertgoers were being harassed by a few locals and, not surprisingly, there was no police presence until we got within 300 yards of the venue. I’ve been in some bad neighborhoods in a few notoriously rough cities in the United States—Chicago, Baltimore, Detroit—but, the Camden experience made the others look like Sesame Street. I knew I could never buy investment property there, and I can’t imagine that anyone else would either.
The negative vibe given off in Camden—a stone’s throw from a major attraction no less—likely gives an indication of why investors should scratch Camden off their list of cities in which to purchase properties to rent or renovate and resale. That it also ranks in the top ten murder capitals in the country doesn’t help. Additionally, developers spend a lot of time researching the best places to launch new housing projects. If real estate tycoons are willing to make multi-million dollar wagers in certain locales, individual speculators often follow suit. Despite the best efforts of the New Jersey Economic Development Authority, a seemingly appealing tract of land in North Camden along the river saw little-to-no interest from the big real estate players last year or the year before. No activity on that land seems to be slated for 2019, either. If buyers follow the money, and their instincts, so should you. Unfortunately, Camden doesn’t make the cut for investment.
Thumbs Up: Sea Isle City
Being a lifelong resident of Eastern Pennsylvania, I had taken most of my beach vacations in Delaware or Maryland. So, when some friends suggested we split a house in Sea Isle City, New Jersey, I was a little skeptical but thought, “Why not?” Nestled between Ocean City and Avalon, Sea Isle impressed me for one main reason: walkability. Other than a quick trip to the grocery store and a short drive to dinner in Avalon, I didn’t get in my car all week. My wife, my friends, and I casually ambled everywhere in Sea Isle—beaches, taverns, and a quiet little boardwalk with shops and restaurants. The little seaside town thankfully lacked the party atmosphere of Wildwood, but was a bit livelier than serene Cape May to the south. My main criteria for a thumbs up: Would I return? The answer—a resounding yes.
Beach properties in New Jersey always seem to be sought after, whether as a vacation home or primary residence. And, Sea Isle’s median list prices of $775,000 present a bargain for shore buyers compared to other seaside markets, like Avalon to the south, which doubles the median value of its northern neighbor. A more family-oriented destination than Atlantic City, Sea Isle’s growth in home prices can’t help but continue to be supported by the carryover effect from other nearby beach communities, like Stone Harbor, too. With median days on the market coming in at 53, selling your investment property for decent returns when the time comes should also be a breeze.
Thumbs Up: Atlantic City
Of course, not all Jersey Shore towns have progressed equally and that some have progressed at all may come as a surprise. Granted, the reality television show that heaped attention on coastal New Jersey may have given a bad rap to the whole seaside expanse. And, that’s patently unfair. Nonetheless, there were some areas along the 141-mile stretch that didn’t merit investment for years. Atlantic City, in particular, has taken its lumps both from Hurricane Sandy in 2012 and the fading casino business that suffered at the hands of legalized gambling in bordering Pennsylvania. Still, the city seems to be trying its hand at a comeback. The unemployment rate, for example, may still be higher than the national average, but is a marked improvement from post-Sandy figures and is even better than last year.
Additionally, the 2019 forecast appears a little rosier for median home prices in Atlantic City, which has seen a backslide in all years since 2007 with the exception of 2014, 2016, and last year when the numbers fell flat by some accounts and increased by others. Prices in 2019 may stand out as an exception as well. Developers who helped to revitalize other Jersey shorelines, like Asbury Park, and a host of nearby Philadelphia communities are hoping to turn Atlantic City into an up and comer in New Jersey. Long-abandoned brick buildings are being turned into high-end apartments and gourmet restaurants and hip bars are moving in to serve up more variety to the locals. Stockton University even opened a beachfront campus last year. Home buyers unable to afford property elsewhere, and who want to jump on this transitioning train before it leaves the station, may actually turn to Atlantic City as a viable option for homeownership. And, this is likely to boost median home sale prices—and your returns—if you buy at the right time and the right price. That’s not to say that Atlantic City’s tumultuous past won’t stack future cards against you. But, the odds are looking better.
Finding Leads Across the State
Whether you prefer the Canarsie or the Weehawken style of mambo, there are real estate investment opportunities in New Jersey that will suit your business goals just right. It’s a matter of finding them, however. For that, you’ll need a solid real estate investor lead generation system. I don’t know about you, but I simply don’t have the time to waste on chasing investment fantasies that won’t turn into a real deal. That’s why I became an independently owned and operated HomeVestors® franchisee. The nationally-known “We Buy Ugly Houses®” marketing campaign is known throughout the state, so distressed homeowners know who to call when the need to sell fast.
Contact HomeVestors® today to see how you can make the most out of the fast-paced Garden State real estate market.
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