But what is equally disturbing is the average sale price of a home sold in New Jersey in the month of September 2023 was $670,000. With the average salary in the state, according to ZipRecruiter, at $58,333, the housing is not only unavailable, and unaffordable, but also unsustainable, even if you were to purchase a home. Why do I say that? Because the real estate taxes in New Jersey are not only the highest in the nation, but the average property tax bill climbed to $9,500 in 2022. That would represent 1/5 or 20% of the gross earnings of the average New Jersey worker, and after taxes probably it would consume up to 1/3 of the salary.
But there are at least two other factors that are contributing to this housing crisis in New Jersey:
1. According to some recent articles, the US has been experiencing a warehouse shortage for over 5 years, and in 2020 there were 11,000 warehouses in North America. But they are reporting that there is still demand to develop another 1 billion square feet of warehouse space by the year 2025. One of the reasons for the demand for warehouse space is the e-commerce economy, which has grown significantly, requiring logistics and distribution centers. Currently, according to the website statistica.com, the US retail e-commerce economy represents 15.4% of our GDP. This is requiring the necessary infrastructure to support it, which is coming at the price of the building of the necessary available housing.
2. But the other factor that is not being given enough credit for the housing crisis is the work-from-home economy. Now people are able to not only work from home, but those salaries are able to make home purchases possible. Right now, according to NJ.com, over 22% of the New Jersey workforce is working from home. This translates into nearly 1 million individuals. COVID had a great deal to do with this shift in the configuration of New Jersey’s workforce, but this ultimately was going to become the norm due to the transition of our economy from retail to e-tail.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single-family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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