Q1 2025 State of Hudson County’s Multifamily Market
Trends, Challenges, and Opportunities | 2023-2025
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 2023 to 2025 and the opportunities that lie ahead.
Market Overview
2023: Market Adjustment Amid High Rates
- 5 Year UST Rates: January 3.85% | March 3.95%
- Buildings Sold: 13
- Total Units Traded: 162
- Total Volume: $34,050,000
- Average Cap Rate: 5.14% | As of March 19,2025
By 2023, rising rates weighed on the market, with the 5-year UST reaching 3.95% by March. The number of buildings sold fell dramatically to just 13. Total units traded dropped significantly to 162, and transaction volume shrank to $34.05 million. Despite the downturn, the cap rate declined to 5.14%, suggesting that some deals still attracted investor interest amid higher borrowing costs.
2024: Transaction Rebound with Higher Cap Rates
- 5 Year UST Rates: January 3.84% | March 3.94%
- Buildings Sold: 33
- Total Units Traded: 464
- Total Volume: $92,095,090
- Average Cap Rate: 6.00% | As of March 19, 2025
In 2024, the market saw a partial recovery as 33 buildings changed hands, reversing some of the prior year’s slump. Total units traded rose to 464, and total volume increased significantly to $92.1 million. The average cap rate increased to 6.00%, reflecting continued adjustments in pricing and investor expectations for higher yields in an environment of elevated interest rates.
2025: Fewer Transactions, Larger Deals
- 5 Year UST Rates: January 4.45% | March 4.10%
- Buildings Sold: 6
- Total Units Traded: 403
- Total Volume: $132,001,458
- Average Cap Rate: 5.30% | As of March 19, 2025
As of Q1 2025, transaction volume has remained significant despite fewer deals closing. Only 6 buildings were sold, but total units traded remained strong at 403, and total transaction volume surged to $132 million. The average cap rate settled at 5.30%, showing that while pricing remains attractive, fewer sellers are willing to transact at current market conditions.
Northern New Jersey Trends in the Market
The Hottest Rental Market in the Northeast
Northern New Jersey continues to be 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 remains 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 fluctuations in sales volume and pricing, 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.
