Op-Ed: New Jersey Makes Headway Among Crisis
Location remains as important as ever, especially with young professionals who like the idea of being right across the river from their careers
New Jersey has had its share of hardships over the past year, but you wouldn't know it by the rising home sales. February 2013 delivered the best level of home sales since November 2009. Increasing 0.8 percent over the same time period of a year ago, New Jersey continues to prove that even a hurricane cannot crush its advantages.
Location has always been New Jersey's ticket to fame, and a little disruption cannot change this. Lender projects are stronger than ever with the Jackson Twenty-One project, not blinking an eye, among the recent crisis. A total of 150 acres has already been approved, and the development village is on schedule, according to Mr. Leigh, developer and designer of the project.
Mitch Leigh could have chosen any part of the world to create his dream of green living, artists, and all-around, nice people, but Jackson Township seemed the perfect spot. With the resources and the determination, this will be a project in the making for the next 25 years.
A larger area of growth is in the. Over the past two years, the focus has changed from new home construction to multifamily properties.
Young people, especially, are realizing that anticipated appreciation in home purchases is just not there any more. Being close to career opportunities is the new objective, and being across the Hudson River from New York, makes renting very appealing. Lenders have had to switch gears for developers of apartment complexes, in order to stay in the game. Competition is getting fierce in the changing scheme of things, and creativity from banks, concerning lender projects, is quickly taking place.
Since last year, rental rates in Hudson County have increased 3 percent to 10 percent and are expected to keep climbing. Commercial real estate (CRE) loans have crossed their fingers, and dropped the normal 35 percent equity rate to 20 percent, and in some cases, 15 percent.
Default mortgages rates in New Jersey are also on the decline, with 75 percent due to the apartment complex sector. Even in lower-income-area sectors, the cap rate has been able to withstand the climbing market need. Banks are not the only lenders in the arena. Other entities with the resources and money to move into the area are working deals with developers in what can only been seen as a win-win situation.
Although area lenders can be commended for taking a lead in financing projects, other entities, such as investment groups and international buyers, are making up a huge percentage of the strategy. New Jersey is a hot spot for building condominiums along the Jersey Shore, where 60 percent of the buyers are from overseas. The easy access to Manhattan makes the area worth the investment.
Henley-on-the-Hudson is a prime example of investors delivering what the sign of the times is bringing. Lennar Urban and Roseland Properties came together to develop and build the 669-unit condo complex that stretches along a 10-acre waterfront. Although all of the units, with the exception of one, have been sold, the going was rough. Shelved, after purchasing in 2007, they were right on target for taking steps to complete in the fourth quarter of 2012. These condo prices are not cheap, ranging from $570,000 to $1.7 million per unit. The entire condo market has seen an increase in market price since this time last year, by 17%.
Regardless of what many could consider a slow pace for home sales and a minimal jump start of the economy, as a whole, New Jersey is heading into a new and changing generation of development. By combining every strategy possible, the mortgage industry appears to be taking the lead for the country.