Jersey City is expected to be home to one of the hottest real estate markets in the country for the next ten years.
Although property prices and rents keep rising, this urban area across the Hudson River from New York City is still much more affordable than living in the Big Apple. The City is a great market for rental property owners targeting families and Millennials, with more than 70% of the residents in Jersey City renting rather than owning.
Jersey City is part of the New York City metropolitan area and borders the Hudson River, Upper New York Bay, and Newark Bay. The economy is driven by a variety of business sectors including transportation and distribution, manufacturing, retail, and financial services. In fact, Jersey City has been nicknamed “Wall Street West” and is home to one of the largest banking centers in the country.
Here’s what investors should know about the Jersey City real estate market in 2020.
Surging population growth in Jersey City is a sign of just how attractive the market is here. Nightlife, family neighborhoods and luxury high rises, and relatively affordable real estate are helping to make Jersey City a magnet for singles, families, and businesses of all shapes and sizes.
Key Population Stats:
- Jersey City is the 2nd most populated city in New Jersey and is the seat of Hudson County.
- More than 265,000 people live in Jersey City, while Hudson County is home to more than 675,000 residents.
- Jersey City’s population grew 9.3% over the past 10 years while the number of families increased from 56,997 to 59,886, according to The New York Times.
- Population in Jersey City has grown nearly four times faster than the entire state.
- Business Insider reports that Jersey City will be a booming market over the next decade as more people keep moving to the area.
- Median age in Jersey City is 33.7 years vs. 39.5 for the State of New Jersey.
Jersey City is in one of the top 10 hottest job markets for 2020, according to Yahoo Finance. Job market demand is based on a variety of key indicators, including ratio of job openings to candidates, employment growth, and starting salaries.
Key Employment Stats:
- GDP of Hudson County is about $44.7 billion, according to the Bureau of Economic Analysis (BEA).
- Job growth in Jersey City last year was 1.06% while jobs grew in Hudson County by 1.7%, based on reports from the U.S. Bureau of Labor Statistics.
- Between 2014 and 2017 (using the most recent available data) Jersey City added more than 3,000 private-sector jobs.
- Unemployment rate in Jersey City is 4% and 3.2% in the metro area of Jersey City/Hudson Valley.
- Target industry sectors in the Jersey City metro area include health care and social services, business and professional services, education, construction, and finance and insurance.
- Major private sector employers in Jersey City/Hudson County include the United States Postal Service, UBS Financial Services, publishing company John Wiley & Sons, Goldman Sachs & Co. Inc., Bayonne Hospital, and JP Morgan Chase Bank.
- Companies with headquarters and major operations centers in Jersey City include Verisk Analytics, money management firm Lord Abbett, Computershare, NEX Group, and Fidelity Investments.
- New Jersey City University, Saint Peter’s University, Stevens Institute of Technology, and Hudson County Community College are some of the major colleges and universities in the Jersey City metro area.
- 85% of the residents of Jersey City/Hudson County hold a high school diploma or higher, while 42% hold a bachelor’s degree or advanced degree.
- 41% of the residents of the Jersey City metro area use public transit.
- I-78 (the New Jersey Turnpike) passes through Jersey City.
- Port Newark-Elizabeth is a main container shipping facility and a key part of the Port of New York and New Jersey.
- Newark International Airport, John F. Kennedy International Airport, and LaGuardia International Airport are all less than 25 miles from the Jersey City metro area.
Real Estate Market
Jersey City is the place to be in 2020, according to local real estate experts interviewed for Business Insider’s “Hottest Real Estate Markets for The Next 10 Years”. A growing number of buyers and real estate investors are choosing Jersey City over New York City due to a faster commute, accessibility, and lower prices.
Brokers say the area is also attracting all the right people, including millennials, developers, and investors. The New York Post adds that the variety of housing stocks and price points in Jersey City offer options for almost every buyer’s budget.
Key Market Stats:
- The median listing price of a house in Jersey City is $599,000 while the median selling price is $484,400 according to Zillow (as of January 2020).
- Square foot listing price in Jersey City is $438 vs. $294 per square foot in the New York-Newark-Jersey City Metro area.
- Home values in Jersey City increased by 3.2% last year and by nearly 69% since August 2012 based on the Zillow Home Value Index.
- Average days on market is 126.
- During the listing period 11.8% of the houses for sale in Jersey City have a reduction to the listing price.
- 11.6% of the homes in Jersey City have a negative equity vs. 8.2% nationally.
- 1.5% of the homes in Jersey City have a delinquent mortgage vs. 1.1% U.S. average.
- Neighborhoods in Jersey City with the highest home values include Downtown Jersey City and The Waterfront.
- West Side and Greenville are two neighborhoods in Jersey City with the lowest home values.
Strong Renters’ Market
More than 70% of the households in Jersey City are renter occupied, even though the City is the 5th most expensive small city to rent in, according to The Jersey Journal. Two of the reasons why there are so many renters in Jersey City is the high cost of buying property and the fact that although rents are high here, they’re still lower than nearby Manhattan and Hoboken.
Although Jersey City does have a rent control ordinance that caps annual rent increases to 4%, single-family rental homes aren’t regulated. The current rent control law in Jersey City applies only to buildings built before 1987 with five or more residential units.
Key Market Stats:
- Median rent in Jersey City is $2,130 per month vs. $2,422 per month for the New York-Newark-Jersey City metropolitan area.
- Rents in Jersey City increased by an average of 1% over the past year, according to RENTCafé.
- 86% of the housing units in Jersey City rent for more than $2,000 per month.
- 71.3% of the households in Jersey City are renter-occupied.
- Cities near Jersey City with the highest rents include Manhattan and New York City where rents range between $3,923 and $4,211 per month.
- Cities near Jersey City with the lowest rents include Yonkers where the average rent is $2,065 and Elizabeth where monthly rents average $1,295.
Historic Price Changes & Housing Affordability
Analyzing the historic change in real estate prices in a market can help investors predict the potential future appreciation of property. Housing affordability is a metric used to estimate the current and future demand for rental property, because in markets where housing isn’t affordable, more people will generally rent than own, as is the case in Jersey City.
Each quarter the FHA releases up-to-date data on the change in home prices for all markets across the U.S. The most recent FHA 2019 Q3 House Price Index report for the New York-Jersey City-White Plains, NY-NJ MSA shows:
- Since Q1 1991 homes prices have increased by 195.36%
- Over the past five years home prices have increased in Jersey City by 23.63%
- Over the past year prices have increased by 2.98%
- Over the last quarter home prices in Jersey City have increased by 0.31%
The National Association of Realtors (NAR) publishes a Housing Affordability Index (HAI) report for all markets across the U.S.
When conducting its analysis, the NAR begins with the median family income in a market and compares that to the median price of an existing single-family home. The report also assumes that people will purchase a home using a conventional mortgage with a 20% down payment.
The Housing Affordability Index from the National Association of Realtors uses 100 as a baseline affordability index number. The greater a market’s HAI is above 100, the more affordable a market is, everything else being equal.
Based on the NAR’s latest report, the HAI for the New York-Newark-Jersey City, NY-NJ-PA MSA was 115.2 in 2018, the most recent year available. This means that the median family has barely enough income needed to purchase a median priced, single-family resale home in the Jersey City metro area.
Quality of Life
It’s easy to mistake Jersey City for the 6th borough of New York City. Located just 20 minutes from the Big Apple, Jersey City is often described as an intimate sophisticated urban community.
Key Quality of Life Stats:
- Forbes has ranked Jersey City as the 5th-best place for Millennials.
- Jersey City receives “A+” ratings from Niche.com for diversity and nightlife, and is also listed as a good place for families.
- WalletHub says Jersey City is the #1 most ethnically diverse city in the U.S. with a melting pot of people and cultures.
- Nearby Ellis Island processed more than 12 million immigrant steamship passengers between 1892 and 1954.
- Powerhouse Arts District in Downtown Jersey City takes urban sophistication to an entirely new level.
- The 1,212-acre Liberty State Park is located in the middle of Jersey City, with nearby ferries to the Statue of Liberty and Ellis Island.
- Climate in Jersey City is moderate with hot humid summers and mild to cool winters.
- Commuting across the Hudson River to NYC is easy with plenty of public transportation.
- Hudson River waterfront in Jersey City is nicknamed “Wall Street West” due to the large concentration of jobs in the financial services and securities sectors.
- Jersey City is home to numerous landmarks and Registered Historic Places including Liberty National Monument, Ellis Island, Colgate Clock, and Loew’s Jersey Theatre.
- Jersey City is the place to be for lovers of New York sports teams including the Mets and Yankees, Nets and Knicks, Giants and Jets, Devils and Rangers.
- Jersey City Medical Center is rated as one of the best hospitals in the region by U.S. News & World Report.
Get Out the Map
Where to begin your search? Roofstock created a heat map of Jersey City based on our Neighborhood Rating, a dynamic algorithm that enables you to make informed investment decisions by measuring school district quality, home values, employment rates, income levels and other vital investment criteria.
DARK GREEN: 4-5 star neighborhood
LIGHT GREEN: 3.5-4 star neighborhood
YELLOW: 2.5-3 star neighborhood
ORANGE: 2 star neighborhood
RED: 1 star neighborhood
Ready to invest in the Jersey City housing market? If you haven't already done so, create your free Roofstock account and set up alerts. We'll notify you when we have a Jersey City investment property that matches your search criteria.