It was another big quarter for The Heights in the latest South Hudson County Market Report, and the numbers, for the first time in a while, demonstrate that some relief for renters has finally arrived. But while there’s mostly good news for property owners, the potential effects of Jersey City’s property revaluation loom large over Downtown’s neighborhoods.
Pure Properties’ report for Q4 of 2017 reflects uncertainty over the looming reval, Jersey City’s first since 1988. The Mayor’s office released preliminary information suggesting that taxes on properties in Downtown Jersey City’s neighborhoods are expected to increase by an average of 60%, and residents in Paulus Hook and Van Vorst Park are faced with 75% and 67% respective increases. On the flipside, neighborhoods such as Greenville, West Bergen, and The Heights are anticipating tax reductions of 40%, 32%, and 18% respectively.
How much impact those potential numbers have on the market remains to be seen, but buyers and sellers seem to be preparing for the new tax realities already. For the second straight quarter, the strongest year-on-year appreciation in Jersey City was found in outer neighborhoods: median prices for 1-4 family homes increased in The Heights by 40%, jumped 22% in West Bergen, went up 20% in Greenville, and appreciated 18% in Journal Square.
While 1-4 family homes in The Heights continued their hot streak, the average sale price for condominiums in the neighborhood actually fell 28% in the quarter to $297,000, which was off 11% year-on-year. Average rent in The Heights held at $1,700/month, down 8% in the quarter and unchanged compared to 2016’s 4th Quarter.
Elsewhere outside of Downtown, sales of 1-4 family homes in Greenville averaged $295,000, while sale prices for condos in the neighborhood jumped 8% in the quarter to $410,500. West Bergen’s condo prices held steady at $325,500, unchanged in the quarter but up 12% year-on-year. Bergen-Lafayette remains the hardest neighborhood to gauge due to low inventory of home sales, but average prices of 1-4 family homes weighed in at $435,000 and condos averaged $395,000, increases of 5% and 15% respectively year-to-year.
Journal Square otherwise had a quarter to forget, as the average sale price of 1-4 family homes clocked in a $482,500, unchanged from Q3. Condo sale prices averaged $295,000, dipping a modest 2% in the quarter. The area still had good news for the year, as home and condominium values in the neighborhood have gone up 18% and 23% respectively.
Hoboken continued its slow and steady gains; 1-4 family homes in the Mile Square City averaged $1.83 million, an 11% quarterly increase and up 5% year-on-year. Average condo sale prices dipped 1% in the quarter to $745,000 but are up 7% from last year. Hoboken’s average rent fell to $2,500/month, which was lower than Downtown Jersey City’s $2,600/month average. Countywide, rental prices were flat over the quarter for most areas, slowing year over year in part due to increased inventory.
Perhaps the biggest eye-opener in the report is Downtown Jersey City, which appears to have taken a pause after briefly overtaking Hoboken as the market leader last year. The average sale price of 1-4 family homes was $1.35 million, up 3% in the quarter but off 11% since last year. Condo sale prices fared better and averaged $729,000, a 2% quarterly increase and 4% gain year-on-year.
Where the Downtown market is headed remains to be seen, and some have argued home values could decrease due to significant tax hikes that are coming to many properties. However, a similar revaluation in Hoboken a few years ago did not cause a massive downturn in price appreciation and demand in the townhome market as many predicted.
That said, the dynamics of Jersey City’s revaluation are arguably more complex, as home prices in different areas of Hoboken don’t vary nearly as much as they do in Jersey City. The next market report for 2018’s 1st quarter will be telling of how Downtown’s market reacts to the tax changes.
Read the full Hudson County Market Report here.