New Jersey’s 2021 Real Estate Market Forecast
New Jersey was hit hard by COVID-19, ranking as one of the top markets affected by the pandemic. New Jersey’s unemployment rate skyrocketed, leaving many families struggling to pay bills and their mortgage. The state’s hardiness and grit have shown brightly throughout the last six months as unemployment decreases and home sales rise. As demand swells, the median sale price has also risen, increasing by 5.3% year-over-year. With this information in mind, what should New Jersey real estate agents prepare for in 2021?
2021 New Jersey Real Estate Outlook: Heating Up
New Jersey’s home prices continued to rise through the summer and into typically slower months, increasing well into December 2020. With a record-low inventory, home sale prices are expected to rise by 10.8% in 2021. Rental prices are also expected to rise as appreciation has historically steadily increased, with NJ properties having increased in value by 98.0% since Q1 of 2000. While COVID-19 has thrown some obstacles in the road and created uncertainty for both markets in the future, one thing is true: The rental market is resilient and can rebound in the face of adversity.
Having taken a hard hit from COVID-19 and rising to the top of the list of states with high levels of underwater mortgages, New Jersey’s real estate market was struggling through the first few months of the pandemic. There are two factors that will contribute to the state’s home price forecasted growth in 2021: lockdowns and homeowner demand. If the pandemic continues and keeps residents locked down and unable to work, activity will fizzle out as the attractive home inventory dries up. As we saw back in March, a lack of transactions will stall home prices in the short term.
Delinquency rates in New Jersey are some of the highest in the nation at 8.0%. In June and July, New Jersey found itself in a list of the top five states hardest hit by the pandemic, and it showed in the real estate market. Through the fall, the Garden State demonstrated strong improvements in delinquency rates as the economy began to recover, and some residents were able to return to work.
2020 New Jersey Real Estate Market Data
|Zillow Home Value Index||$367,103|
|1-Year Change on Home Values||+8.5|
|1-Year Change on Rent Prices||+3.9%|
|Homes With Negative Equity||4.2%|
|Delinquent on Mortgages||8.0%|
|Buyer’s or Seller’s Market||Seller’s|
Market Insights for New Jersey
New Jersey’s unemployment rate continues to decrease after starting 2020 at almost full employment, which is a great sign for the state’s economy and delinquency rates. The state saw a record high number of unemployment claims in April at 774,614 claims but has seen a significant decline in claims as there were only 59,606 claims in November 2020. As a result of the CARES protections and loan forbearance, mortgage debt around the country remains low; as we head into 2021, further government aid will likely be required.
New Jersey is known for hit-makers like Jon Bon Jovi, Whitney Houston, and Frank Sinatra. Today, it’s creating hit-makers through its highly-ranked universities, making purposeful impacts on the technology and biological science industries. On top of its world-class schools, New Jersey is known for its steadfast care of its residents through its top-ranked health care system. Here’s how the Garden State shakes out in comparison with the nation:
- First for early childhood education
- Second for foreign direct investment
- Second high school graduation rates
- Sixth in health care
With rankings in important sectors such as these, it’s no surprise why the state is seeing so much real estate activity.
For the first time, homeowners have the opportunity to choose to work in a location that gives them the quality of life that they want. There’s no longer a need to be ten miles from the office for commuting if you can work at home. The big city exodus gaining momentum across the country is real, and areas outside of urban living are seeing a rise in demand.
Take On 2021 With the Best New Jersey Real Estate Courses From The CE Shop
Get prepared with The CE Shop’s Exam Prep Edge, a tailored online study experience that will help you ace the national portion of your licensing exam. Or keep going strong with one of our comprehensive, 100% online Continuing Education packages. Want to stay up to date on everything in New Jersey? Join the Mid-Atlantic Real Estate Facebook Group!