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Don’t Discount Northern New Jersey Apartment Construction

Garden State Performance Mimics New York

By Dave Sorter | Tuesday, April 25, 2017


When talking about the massive amounts of new supply identified for the tri-state area around New York City, most of the attention goes to the city. That’s appropriate, since Brooklyn, Queens and Midtown West in Manhattan are all among the top 10 submarkets for new apartments this year.

But don’t overlook the amount of construction in Northern New Jersey. There’s a lot of development taking place across the Hudson River, and the apartment market data shows that it may be having the same effect on performance as it is inside the five boroughs.

Combining the New York metro submarkets closest to the city with the Newark Metropolitan Division, Axiometrics has identified 7,129 new units slated for 2017 delivery. Put into perspective, if Northern New Jersey was its own metro, it would rank No. 17 for new supply this year, just shy of San Antonio, Anaheim and Phoenix, and ahead of Boston, Miami and San Francisco, among others.

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Among the submarkets, the Hudson Waterfront area, the closest submarket to the city and the place where the Lincoln and Holland tunnels begin (or end), is expected to receive 28.6% of that new supply. Another 23.7% is earmarked for the Downtown Jersey City submarket. Jersey City South and Bergen County also have a lot of new apartment properties under construction.

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Northern New Jersey obviously attracts a lot of residents who work in Manhattan, which is easily accessible by the PATH subway and other public transportation. The average rent in the northern part of the Garden State was $2,209 in March, compared to the $2,770 for the metro as a whole.

The most expensive Northern New Jersey submarkets, Hoboken ($3,345 average per unit per month), Downtown Jersey City ($3,119) and Hudson Waterfront ($3,104), have average rents similar to Queens ($3,199), Roosevelt Island ($3,345) and Brooklyn ($3,597). These rents are at least $1,000 less expensive than even the least costly Manhattan submarket.

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Northern New Jersey as a whole has been outperforming the New York metro in terms of rent growth. Though its 1.1% annual effective rent growth in March was hardly robust, it was still better than the metro’s -0.8%.

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Newark’s Morris County, Somerset and West Essex County submarkets, along with Downtown Jersey City, are the positive forces in the region, all sporting rent growth of 3.3% or higher. On the other hand, Hoboken, Bergen County, Newark/Orange/East Essex County and Hudson Waterfront all recorded negative rent growth in March.

Hudson Waterfront and, to an extent, Bergen County could be feeling the effects of all the new supply coming to market, while Hoboken is suffering from high rents and lower occupancy than elsewhere in Northern New Jersey. The urban Newark/Orange submarket could be affected by anemic job growth in the Newark Metropolitan Division – which turned negative in March, with a -0.5% job-growth rate.

Boiling it down, Northern New Jersey’s apartment market is an important player in the overall New York area – and it is going through similar pain points with lots of new supply and low rent growth.

Dave Sorter

Dave Sorter


Dave Sorter is an award-winning journalist who spent 30 years as a newspaper reporter and editor before joining Axiometrics. He oversees all Axio blogs and newsletters and serves as senior editor of all Axio publications.

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