Just came across this article on NTTimes.com titled….Feeding the rental appetite…by Antoinette Martin, where the author details numerous upcoming rental projects that are slated to be built in Hudson County, as well as some interesting facts that back up her perception for the areas future as it pertains to housing. Though the article was published in February 2012, the facts remain relevant:
HUDSON COUNTY indisputably rules the rental housing market in New Jersey: It has the largest supply of Class A units — around 13,000, according to industry experts — and commands the highest average rental rates of any part of the state. This year and next, that rental kingdom is projected to grow rapidly
As these projects get off the ground and start renting out, I believe that it will have a negative effect on the for sale market in the outling markets in Bergen County and elsewhere in New Jersey. Home sales in the suburbs will suffer as young buyers flock to these projects, rather than buying homes in the suburbs. And it will happen sooner rather than later:
- people will put off making a purchase or rental decision while these projects are being built
- there’s no real rush to buy a home because interest rates and prices aren’t inflating anytime soon
Developers are already at work on, or have recently announced, projects that will add several thousand more units in waterfront communities like Hoboken, Jersey City and Weehawken, and hundreds of other units elsewhere. Hudson County is one part of the state where builders “can still get the economics to work” in their favor, said David Barry, the president of the Ironstate Development Company in Hoboken. “You have to add in the fact that multifamily rentals seem to be the only thing for which builders can get a construction loan from lenders these days,” Mr. Barry added, noting that this factor was keeping the rental development market “very warm, if not hot.”
Even if the economy picks up these rental projects will thrive for decades compared to home sales and new home construction.
If you’re trying to sell your home in towns like Tenafly, Cresskill, Closter and Demarest, then you need to find a way to compete for the first time buyers who make up a majority of home buyers in our area. You need to find a way to entice them with their future ties in the community, because the rental market is an easy “buy”for them.
And these new mega projects that contain every modern amenity imaginable that everyone now looks for, so they too will affect the older once more established rental markets like Fort Lee and Hackensack, because they can’t compete with new more vibrant projects and locations.
As I point out time and again on this site. It’s all about competing for sales.
It’s all about marketing.