State of the Market | Hudson County, New Jersey
Trends, Challenges, and Opportunities | 2022-2024
The multifamily real estate market in Hudson County, New Jersey, has faced a dynamic landscape over the past three years. From fluctuating interest rates to evolving investor sentiment, here’s a comprehensive overview of the market’s performance from 2022 to 2024 and the opportunities that lie ahead.
Market Overview
| Year | 5-Year UST (Jan) | 5-Year UST (Dec) | Buildings Sold | % Drop from 2022 | Total Units | Total Volume | Average Cap Rate |
| 2022 | 1.20% | 3.76% | 116 | N/A | 2,143 | $537,073,012 | 5.59% |
| 2023 | 3.85% | 4.00% | 90 | 22% | 1,376 | $330,879,573 | 5.79% |
| 2024 | 3.84% | 4.11% | 73 | 37% | 949 | $205,079,090 | 5.80% |
2022: A Strong Start with Rising Rates
- 5-Year UST Rates: January: 1.20% | December: 3.76%
- Buildings Sold: 116
- Total Units Traded: 2,143
- Total Volume: $537,073,012
- Average Cap Rate: 5.59%
The multifamily market in 2022 was resilient, despite rising interest rates. The five-year U.S. Treasury yield began at 1.20% in January and climbed sharply to 3.76% by year-end. Despite these rate hikes, the market achieved strong sales volume, with 116 buildings sold. This translated into 2,143 units and over $537 million in transaction volume. A stable cap rate of 5.59% highlighted strong investor interest, even as borrowing costs increased.
2023: Market Adjustment Amid Higher Rates
- 5-Year UST Rates: January: 3.85% | December: 4.00%
- Buildings Sold: 90
- Total Units Traded: 1,376
- Total Volume: $330,879,573
- Average Cap Rate: 5.79%
By 2023, rising rates weighed on the market, with the five-year UST climbing to 4.00% by year-end. The number of buildings sold fell to 90, a 22% decline compared to 2022. Total units traded dropped to 1,376, and transaction volume decreased to $330.9 million. A slightly higher cap rate of 5.79% mirrored cautious investor sentiment as participants adjusted to elevated borrowing costs.
2024: Continued Softening With Signs of Optimism
- 5-Year UST Rates: January: 3.84% | December: 4.11%
- Buildings Sold: 73
- Total Units Traded: 949
- Total Volume: $205,079,090
- Average Cap Rate: 5.80%
In 2024, the market continued to soften as the five-year UST inched higher to 4.11% by December. Transaction activity declined further, with 73 buildings sold, marking a 37% drop from 2022. Total units traded fell to 949, and transaction volume decreased to $205.1 million. The cap rate rose slightly to 5.80%, reflecting ongoing market adjustments and investor recalibration.
Northern New Jersey Trends in the Market
The Hottest Rental Market in the Northeast
Northern New Jersey has emerged as a top performer in the rental market, with limited inventory driving demand. With an impressive 14 prospective renters for every vacant apartment unit and a lease renewal rate of 70.5%—far above the national average of 60.2%—the region has become a preferred destination for renters, particularly those relocating from New York City.
Development Boom
The state issued more housing permits than New York in recent years, spurred by lower construction costs, tax incentives, and pro-growth policies. Payment In Lieu of Taxes (PILOT) programs have also encouraged development, resulting in a boom in luxury apartments. However, the luxury segment faces higher vacancy rates compared to the overall multifamily market.
Looking Forward: Signs of Renewed Activity
While the past three years have been marked by declining sales and volumes, there is growing optimism driven by strong demand fundamentals and potential rate cuts on the horizon. As the market adapts to more favorable conditions, renewed interest from sellers and investors suggests a multifamily resurgence in the coming months.
