New Jersey home buyers continued their march from the north to the south in 2022 in a search for affordability, sending home values in towns such as Pennsville, Ventnor City and Margate City soaring by 20% or more, an analysis of Zillow data finds.
By the end of the year, 67% of New Jersey ZIP codes had a typical home value of more than $400,000, up from 55% the same time a year ago, according to Zillow.
"Our price per square foot was very low to begin with pre-COVID," said Angela Desch, a real estate agent with Coldwell Banker Argus Realty in Ventnor City and president of the Atlantic City and County Board of Realtors. "Once word got out about what you could get for your money, we had a surge of new money coming in from New York and the suburbs. So it was popularity and price point."
Zillow, a Seattle-based real estate company, analyzed home values for 563 New Jersey ZIP codes and shed light on a pattern: Even though mortgage rates spiked, home values continued to rise, particularly in southern counties that long have been considered affordable places to live.
It continued a pattern that began during the pandemic when buyers flocked to the suburbs in search of safety in a migration that, experts said, was aided by record-low mortgage rates and work-from-home policies.
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With mortgage costs virtually doubling in a few months, "price and affordability became a major, major factor in the market," Rutgers University economist James W. Hughes said. "That's always been South Jersey's advantage."
The lingering increase in home values is a sign that supply and demand remain out-of-balance. Buyers — millennials searching for their first home, baby boomers hoping to downsize, families looking for vacation homes at the Shore, and investors — are fighting over a limited number of homes for sale, experts said.
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Adding to the mix: Homeowners who bought or refinanced at low interest rates in 2020 and 2021 are staying put rather than moving and having to get a mortgage with a dramatically higher rate. Last week, the average 30-year fixed rate mortgage was 6.3%, up from its low of 2.7% in January 2021.
The result was a paradox: Sales of single-family homes in New Jersey declined by 18.6% in 2022, but the median sales price rose from $435,000 in 2021 to $473,000 in 2022, or nearly 9%, according to the New Jersey Association of Realtors, a trade group.
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“People are not putting their houses on the market like they used to because they have a nice, comfortable payment," said Diane Traverso, a real estate agent with NextHome Nexus Realty Group in Toms River. "Especially with inflation. Everything else is so expensive, food and gas and this and that, it’s hard to jump into a higher mortgage payment at this point, so a lot of people are just staying put, which is creating this demand for housing that’s not making the prices go down in this lower end market."
More home price information:Get information on property taxes, homes sales and foreclosures at DataUniverse.com
Among the takeaways from the Zillow data:
- Home values continue to rise. Only two out of 563 ZIP codes in New Jersey analyzed by Zillow saw losses. More than half had gains of at least 10%.
- Southward march. Out of the 20 ZIP codes with the biggest increases in home values in 2022, only one — 08832, home of Woodbridge and Sayreville in Middlesex County — was north of Monmouth and Mercer counties. Conversely, out of the 20 ZIP codes with the slowest increases, 17 were in Bergen, Hunterdon and Morris counties.
- What mortgage rate hike? Buyers who pay cash appear to have helped the second-home market remain strong. Beach towns Ventnor City, Margate City, Longport, Brigantine, Deal and Mantoloking saw values increase by at least 20%.
- Investors remain active. Neighborhoods with home values of less than $200,000 are popular with investors, who either renovate them to sell at a higher price or rent them. Two ZIP codes in Trenton, two in Camden and one in Atlantic City saw values increase by more than 20%.
“We don’t have enough houses in New Jersey," said David Huber, a real estate agent with HomeSmart in Washington Township, Gloucester County. "It’s a double-edged sword. We don’t have enough rental properties, and we don’t have enough houses that are under $300,000 to fill all the buyers’ needs."
Which New Jersey ZIP codes had the fastest and slowest increases in value? Here is a look:
Biggest home price increases in New Jersey
1. Pennsville, Deepwater section
County: Salem
ZIP code: 08023
Average value December 2022: $142,317
Change from December 2021: 30.3%
2. Ventnor City
County: Atlantic
ZIP code: 08406
Average value December 2022: $512,210
Change from December 2021: 26%
3. Margate City
County: Atlantic
ZIP code: 08402
Average value December 2022: $898,165
Change from December 2021: 24.8%
4. Dorchester
County: Cumberland
ZIP code: 08316
Average value December 2022: $203,734
Change from December 2021: 24.8%
5. Longport
County: Atlantic
ZIP code: 08403
Average value December 2022: $1,579,694
Change from December 2021: 24.2%
6. Camden
County: Camden
ZIP code: 08104
Average value December 2022: $93,608
Change from December 2021: 23.8%
7. Atlantic City
County: Atlantic
ZIP code: 08401
Average value December 2022: $194,057
Change from December 2021: 23.6%
8. Brigantine
County: Atlantic
ZIP code: 08203
Average value December 2022: $602,457
Change from December 2021: 22.6%
9. Deal, Ocean Township
County: Monmouth
ZIP code: 07723
Average value December 2022: $3,279,018
Change from December 2021: 22.1%
10. Trenton
County: Mercer
ZIP code: 08608
Average value December 2022: $156,156
Change from December 2021: 22.1%
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Smallest home price increases in New Jersey
1. Maurice River Township
County: Cumberland
ZIP code: 08314
Average value December 2022: $96,708
Change from December 2021: -5.5%
2. Camden, Pennsauken Township
County: Camden
ZIP code: 08102
Average value December 2022: $100,790
Change from December 2021: -2.5%
3. Parsippany–Troy Hills
County: Morris
ZIP code: 07034
Average value December 2022: $388,484
Change from December 2021: 0.3%
4. Lyndhurst, Rutherford, North Arlington, East Rutherford
County: Bergen
ZIP code: 07071
Average value December 2022: $462,871
Change from December 2021: 1.0%
5. Tewksbury Township
County: Hunterdon
ZIP code: 08858
Average value December 2022: $681,465
Change from December 2021: 1.2%
6. Lodi
County: Bergen
ZIP code: 07644
Average value December 2022: $482,171
Change from December 2021: 1.6%
7. Rochelle Park
County: Bergen
ZIP code: 07662
Average value December 2022: $496,932
Change from December 2021: 2.3%
8. Edgewater
County: Bergen
ZIP code: 07020
Average value December 2022: $598,828
Change from December 2021: 2.4%
9. Garfield
County: Bergen
ZIP code: 07026
Average value December 2022: $465,124
Change from December 2021: 2.6%
10. Ridgefield
County: Bergen
ZIP code: 07657
Average value December 2022: $591,676
Change from December 2021: 2.6%
Michael L. Diamond is a business reporter who has been writing about the New Jersey economy and health care industry for more than 20 years. He can be reached at mdiamond@gannettnj.com.
