Looking to sell or buy a home for your primary residence or looking for an investment house in Bergen County, New Jersey? Well, you need to keep reading, because in this article I’m going to give you all the important info you need to make the right decision.
Overall the New Jersey market has taken quite the hit over the last ten years. Buyers have been looking across the bay to New York for their real estate needs, which is quite confusing from a financial perspective. If the real estate market has shown us anything over time it is that things always average out.
And things are starting to do that now, with all the attention targetted across the river on the New York market, millennials and first time home buyers are wisely taking advantage of this attention averted market in Bergen County and snatching up the lower-priced and entry-level houses. In an article from Northjersey.com, it says (For those wading into the residential real estate market for the first time, it will be tough to gain a foothold, said Crocco of Bergen County Realty.
“It’s a difficult time to be a young buyer right now,” Crocco said. “We have buyers that made several offers on several houses offering the asking price or more, and they’ve been turned down.”
Average Home Buyers Out Matched in Bergen County
Entry-level buyers are being forced into bidding wars and facing rising mortgage interest rates. The average rate on the 30-year fixed is at its highest level in more than four years and is not expected to fall back, as it did last year.
Higher mortgage rates usually cool home prices, as buyers can’t afford as much and sellers have to accommodate. The difference in today’s market is that there is so much pent-up demand from the largest generation, and the economy and employment are improving. That dynamic could outweigh higher rates, although at some level there has to be a breaking point, especially for young buyers with less cushion in their wallets.
“Affordability continues to slip away from the average buyer. Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis even worse,” said Frank Martell, president, and CEO of CoreLogic. It’s a good time to buy a home in New Jersey.
Another article from this month confirms this information that its tough on Millenials to buy a home in Bergen County. They may have waited longer than previous generations, but millennials are now showing a strong desire to become homeowners, especially older millennials. That is strengthening overall demand for the limited supply of homes for sale, and consequently reigniting the fire under home prices.
Home price gains had been shrinking over the last year, but the increases turned higher again this summer. Home prices were up 3.6% in July compared with July 2018, according to CoreLogic. That is stronger than the 3.4% gain in June. CoreLogic is now predicting an even larger 5.4% annual gain by July 2020.
“Sales of new and existing homes this July were up from a year ago, supported by low mortgage rates and rising family income,” said Frank Nothaft, chief economist at CoreLogic. “With the for-sale inventory remaining low in many markets, the pick-up in buying has nudged price growth up. If low-interest rates and rising income continue, then we expect home-price growth will strengthen over the coming year.”
Millennials Are Expressing An Interest In Buying Homes
More than a quarter of the nation’s largest generation said they were interested in buying a home in the next 12 months, according to a survey conducted by CoreLogic with RTi Research during the first half of this year. The problem is there is still precious little for sale, and supplies are falling once again. At the end of July, the inventory of homes for sale was nearly 2% lower compared with a year ago, according to the National Association of Realtors. There was just a 4.2-month supply of homes for sale. A six-month supply is considered a balanced market between buyers and sellers.
“A growing number of millennials are expressing an interest in buying homes, reinforcing the theory that this cohort is continuing to engage within the housing market,” said Frank Martell, president, and CEO of CoreLogic. “But, with so few homes available for sale, the imbalance has created an affordability crisis that is getting worse every day. Demand exceeds supply and we’re unsure of when the two will balance out.” Grim, 2019. And here is some information on why there are so many New Jersey entry-level buyers right now (New Jersey’s job market was flat in July, but even if employers were in hiring mode, they’d have a tough time finding workers to fill the jobs.
That’s because the state’s unemployment rate dipped to 3.3% in July from 3.5% in June, the state’s Department of Labor and Workforce Development reported last week, setting a new record low.
“We’re in the recreational business, and the economy is strong,” said Kevin Carlin, a spokesman for Micro-Air Inc., an Allentown-based company that makes electronic circuit boards and is trying to hire two employees.
The monthly unemployment report last week was mixed. It showed New Jersey lost 500 jobs with losses in leisure and hospitality and gains in fields like professional services and manufacturing.
New Jersey has been trying to climb out of an economic hole for the better part of two decades, making the transition to the digital age while navigating obstacles from the end of Atlantic City’s monopoly on gambling to the devastation of superstorm Sandy.
Recent Economic Data Offers Both Glimmers of Hope and Echoes of the Same Old Story
Good news? Wages and salaries in the metropolitan New York area, which includes northern New Jersey, rose 3.9% during the past year, faster than the U.S. average and the strongest performance since the Bureau of Labor Statistics started tracking it in 2006.
Bad news? The state’s personal income, which includes not just wages and salaries, but also government benefits such as Social Security, has grown 1.1 percent during the past year, ranking 42nd nationwide, an analysis by Pew Charitable Trusts found.
The jobs report for New Jersey offered little clarity. Over the year, the state has added 48,300 jobs for a growth rate that ranks 26th nationwide, according to an analysis of data from the U.S. Bureau of Labor Statistics.
“That suggests that … job growth would be higher if there were more people to fill open slots,” Rutgers University economist James W. Hughes said. Grim, 2019.
So what does this information mean exactly? Well, what I gather from it is that young people are realizing the importance of owning a home, and they are buying wisely in New Jersey because the appreciation on these houses will be phenomenal by the time they are older or if they decide to move at some point. Couple this with a better economy and that makes the competition for these houses all the more fierce. So if you find one of these houses that’s fairly priced then my advice would be to snatch it up as quick as possible.
It is very wise to buy right now before these starter home prices get too out of hand, people are starting to wake up to the fact that it is only a matter of time before the New York market floods all of New Jersey.
Of course with all the flooding of the lower-priced houses that leaves the more expensive housing market in New Jersey suffering a bit, all the attention is on the starter homes and that leaves the houses that are over a million dollars with a much smaller pool of buyers. In the same article from Northjersey.com is says (The trend reverses in the luxury housing market, Zamir said. The inventory for homes selling for $1 million and above far outpaces demand, he said.
“We’re seeing more days on the market and less activity,” Zamir said. “The high luxury market is beginning to slow down.”
Home Staging Sells No Matter The Price Range
In Ridgewood and northwest Bergen County, it’s all about appearances, said Jennifer Parsekian, a broker at Keller Williams Village Square Realty.
If a house is staged and looks like it belongs on HGTV, it will sell, she said. Quickly.
“Right now, the visual that the buyer receives when they walk in the door is important. They want the clean, open, airy look that they’re seeing on TV,” Parsekian said. “The homes that might have the color palette from the 90s — the red, yellow and gold — are not selling as quickly, and you may take a price reduction.” Painted walls, fresh furniture and a photo-ready appearance can make some buyers overlook any deficiencies, like the lack of a central air conditioning system, and pay more than they would for a similar home without a shiny veneer, she said.
“For sellers, it is really is in their best interest at this time to stage their home,” Parsekian said. “Staging sells, in all price ranges.”
Buyers looking for homes in the $1.2 million to $1.5 million price range have a good inventory to choose from and can take their time, she said). Shkolnikova, 2018.
So this obviously means that it is tough for sellers of the higher-end houses right now, but in my opinion it is still a great investment to purchase one of these homes because real estate is all about location, and with Bergen County being so close to New York, the only option for the real estate is to keep appreciating.
Why is Bergen County, New Jersey A Good Place To Invest?
So now that I’ve covered basic home buyers lets talk about my favorite subject, Investing! What makes New Jersey and specifically Bergen County a good place to invest? Take a look at all these points from an article in Homeunion.com.
Surging Foreclosures– New Jersey has the highest foreclosure rate in the United States. The recent property tax revaluations could drive the rates even higher. And this is expected to benefit the state’s housing market. Namely, the current revaluation could potentially lead to a significant increase in property taxes, particularly in the downtown area of Jersey City. Many residents could be unable to pay the increased taxes. Consequently, real estate investors who are looking to help distressed property owners would get an investment opportunity. This would also help stabilize the besieged neighborhoods.
Perfect Location for Global Trade – Strategic location, unmatched transportation infrastructure, and a highly educated talent pool, the Garden State is primed for international trade. In fact, the state is endowed with five strategically located Foreign Trade Zones, as well as two international airports and ports at either end of the state. These include Port Authority, North America’s third-busiest port.
High Rental Demand– Many people in New Jersey no longer qualify for a mortgage. Many previous, financially incapacitated investors have lost multi-family homes to foreclosures. The market is quite promising for real estate investors who can renovate and convert these homes into rental properties.
Weather Disasters– February 2018, New Jersey’s job market added 15800 and its unemployment rate fell to 4.6 percent. The new jobs being injected into the market and the economy recovering since the end of recession contribute to the positive sentiments towards real estate.
Improving Employment Rates– The state of Iowa is prone to floods, many of which have caused agricultural and economic losses worth billions of dollars over the years. Besides direct damage to fields and roadways, floods have a cascading effect that often includes a decrease in property values in the affected areas.
Low Property Crime Rate– New Jersey has a great reputation for cracking down on crime and upholding the safety of her residents. In fact, the Garden State has the third-lowest property crime rate in the United States.
Top Schools– Anyone who wants their children to get a great education should consider moving to New Jersey. The State boasts top-rated schools. It is also home to 63 colleges and universities, which include the U.S. News and World Reports’ top-ranked Princeton University.
Now some more valuable information from the same article for specific areas for investors
Some of the areas in the Garden state exhibiting the greatest potential for real estate investment opportunities include Jersey City, Hoboken, and Newark. For example, Forbes has predicted a 12% rise in home prices in Jersey City over the next 3 three years.
Besides having easy access to New York City, the city is also currently experiencing an inflow of new business development, making it attractive to real estate investors on both sides of Hudson River.
While Hoboken presents high prices of properties, the city boasts the strongest sales in the Garden State. The demand for real estate in Hoboken remains high, thanks to its access to good schools, the influx of new business, and proximity to the Big Apple.
In light of these factors, opportunities for purchasing and selling distressed properties in Hoboken promise to deliver a great return on investment. Newark, on the other hand, is currently enjoying the lowest crime rate in 50 years. The city is also experiencing an influx of new business.
What’s more, Newark has direct access into Manhattan. These factors are contributing to an explosion of the population looking to buy property. If you’re looking to buy and hold, Newark could be the ideal place to invest in.
Growth opportunities also exist in the strongest appreciating markets of East Orange, in Essex County; Chatham, a Morris County borough; Rutherford Township in Bergen County; Maplewood, in Essex County; and Strathmere in Cape May County.
If you’re looking for cash flow, the highest yielding markets include Gloucester City, Willingboro, and Roselle, especially for fix and flip investors. (HomeUnion, 2019)
Specific Bergen County Areas To Target
And now my best tips and specific areas that I think investors should be targeting. So the first area I would be aggressive in targeting would be Hackensack! Why Hackensack? Because home prices there are the lowest in the county, and also the age of the houses are also the oldest in the state. That means for of these homes will need repairing, which is good for flippers, and also the entry point to buy them is lower as well. Which is great for investors who do don’t have unlimited funds to initially get into a property.
- If I was to set up an investment business in Bergen County I would park in Hackensack and start crushing it there.
- If I were an investor/builder I would target the Fort Lee area. Prices for homes are in the upper two thirds as far as Benton County goes, but that means good selling price points while also not breaking the bank to purchase land for the new builds. And for people looking to buy and hold rentals, I would stick with Hackensack and Garfield as my areas to purchase rentals.
- And as always the best advice I can give would be to target older in their 60’s and 70’s who own multiple single-family homes and make strong offers on the best rental house. That is the best way to get in with them and start developing a good relationship so you can purchase multiple properties from the same people. That is a gold nugget, my friends!
My overall thoughts on Bergen County is that it’s a great place to buy and a great place to invest! Stick to the Hackensack area and it will pay off big time in the next 15 to 20 years!
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