Interactive Map: Home Values Drop Again While Housing Costs Remain High

Decline of nearly 17 percent since 2008 has seen statewide median value drop from $377,000 to $312,000

The green point shows the lowest median home value; the yellow point marks the highest.

The median value of a home in New Jersey dropped again last year, to just under $312,000, bringing the four-year decline in values to about 17 percent, according to new data from the U.S. Census Bureau.

Between 2011 and 2012, the median value of a home in the state decreased by 4.2 percent, to $311,600, estimates from the American Community Survey show. That’s a 16.9 percent drop from 2008, in the middle of the recession, when a typical New Jersey home was worth $364,000. In 2006, prior to the start of the 18-month recession at the end of 2007, the median home value was $377,000.

The Census data show a corresponding drop in median housing costs, but New Jerseyans with a mortgage still paid the highest monthly amount in the nation — $2,342. The national median was almost $1,000 less, at $1,460. Many New Jerseyans are spending one-third or more of their income on housing each year, an amount that housing advocates say is excessive.

Cecilia Zalkind, executive director of Advocates for Children of New Jersey, said it was “alarming” that, according to one estimate, 51 percent of households in New Jersey are spending more than 30 percent of their income on rent and utilities.

“Clearly, New Jersey families are still suffering the effects of the prolonged recession and that means children are suffering,” Zalkind said.

Citing other Census data that showed an increase in families with children living in poverty, she added, “We need a coordinated, sustained response to this growing child poverty, which infects nearly every aspect of child well-being.”

When people have to spend too much on housing, they may have to scrimp on other items, including food, clothing and medical care.

The median amount that a New Jersey home owner with a mortgage spent on housing costs each month in 2012 was $2,342. That’s down over one year by roughly the same percentage as the value of the typical house dropped, but only about 7 percent less than in 2008.

That decline was largely due to the number of homeowners refinancing their mortgages and a drop in the price of natural gas, said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. Still, Hughes said, New Jersey’s housing costs are about 60 percent higher than the national average.

Source: US Census Bureau 2012 American Community Survey

Statewide, almost two-thirds of home owners with a mortgage reported paying $2,000 or more a month on housing. For one-third of the owners of homes with mortgages, those costs eat up at least $3.50 of every $10 of income. Many banks recommend spending no more than $3 of every $10 of income to pay the mortgage.

Salem had the second-lowest home value — $185,800 – and the lowest percent of people spending 35 percent of income on mortgage and other costs, at 25.3 percent. The most overburdened county was Hudson, where almost 44 percent of home owners spent more than 35 percent on housing and the median monthly mortgage was $2,644 but the median home value ranked only 8th-highest, at $335,000.

Bergen had the highest home values, $433,000, and highest median mortgage, $2,865, while it also had the 7th-highest proportion of overburdened home owners, at 37.1 percent.

Among the state’s wealthiest counties, Bergen registered the smallest drop in median home value in New Jersey from 2008 to 2011, at 10.6 percent. Warren County had the largest drop – 17.9 percent. Homes lost value over the four years in every county; only in Warren did the median home value last year inch up compared with 2011.

“Everybody was hit pretty hard,” Hughes said. “The central cities were hit pretty hard. So were some towns where McMansions were built too far out, in Warren and west Hunterdon; some of those should not have been built in the first place.”

Hughes said he thinks the 2012 data represents a bottoming out of home values.

“Through the beginning of 2012 they were still declining,” he said. “They started to stabilize in the second half of 2012 and into 2013 and have begun advancing.”

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