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Market Report

Northern New Jersey Multifamily Investment Forecast

2022 Outlook

Supply Growth Overshoots Normalizing Rental Demand;
Regulatory Changes Drive Investment Trends

Last year's employment surge along the Hudson drives current stock expansion. After a year of surging rents and declining vacancy, Northern New Jersey is projected to experience a year of effective rent growth and multifamily occupancy closer to the trailing decadelong average. Renter demand growth is expected to slow yet remain strong due to the area's mix of endemic and exogenous demand factors. Many renters that migrated from nearby urban cores during the pandemic for more spacious and affordable suburban units are expected to stay, due in part to companies expanding headcounts in New Jersey's economic hubs of Trenton and Newark. Additionally, rental demand from commuters to New York plays a strong role as firms tentatively schedule reopening Manhattan offices through the next 12 months. Supply gains are strongest in Essex and Hudson counties, with most deliveries concentrated near commuter corridors into Manhattan. Marketwide stock increases are expected to exceed last year's completions by over 3,000 units. This ample stock expansion exceeds new demand from 2022's relatively tepid employment growth, which along with New Jersey's continuing net out-migration will lead to an uptick in vacancy by the end of the year.
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