Affordability Crisis Worsens with NJ’s Runaway Home Prices

New Jersey was one of the top states for rising home values in 2023, according to a recent report from New Jersey Real Estate Network. Analyzing Zillow data, the study found that New Jersey had the 4th highest percentage increase nationally over the last year at 7.43%.

In addition to the percentage gain, New Jersey had the 2nd highest growth in average home price dollar value. The typical home in the state now sells for around $495,469, a striking increase of $34,283 since January 2023.

Experts attribute these housing price surges in certain states to high demand amid strong economic and job expansion, combined with low inventory. According to the report, “Economic vitality, job growth and population influx can drive demand, while supply constraints and low interest rates can amplify the increase in prices.”

Connecticut Led the Way

Connecticut saw the steepest home price gain at 9.56%, translating to a $33,293 rise per home. Maine and New Hampshire rounded out the top 3 states for percentage increase at 8% and 7.49%, respectively. New Jersey trailed closely behind in 4th place with its 7.43% uptick.

Nationally, home prices were up 3.5% year-over-year in November per Compass Real Estate. Condo/co-op median prices climbed by 8.6% over the same period. Home values in the U.S. have skyrocketed nearly 54% over the past five years.

Some States Saw Declines

On the flip side, several states experienced home price declines in 2023. Louisiana saw the largest dip at 2.19%, amounting to a $4,370 reduction in average value. Idaho, Texas, North Dakota and Nevada also reported small drops of .75% or less.

While New Jersey's housing costs spiked dramatically in 2023, expert projections indicate the state could see cooling in the coming year as buyers reach affordability ceilings. However, New Jersey remains an attractive destination given its proximity to major urban hubs.