The cost of real estate has always varied depending on the region, and yet at the moment it seems like the gulf between the affordability of some states and the unattainability of others is wider than ever.
New Jersey sits at the upper end of the spectrum in terms of average property prices, which is not ideal for first time buyers who want to settle down in this state. So what are the causes of the current market conditions, and are there ways to keep costs down if you are eager to own real estate in NJ?
The Impact Of Supply And Demand
The simple fact is that real estate is more expensive in New Jersey than elsewhere because a lot of people want to live there, and there aren’t enough homes to match the army of prospective buyers right now.
When demand exceeds supply, prices almost always rise, and this is the case with NJ’s property market right now.
The Quality Of Life
Another feather in New Jersey’s cap is the quality of life that it offers to residents. With relatively low levels of crime and a healthy economy, it is popular with families, while also being a neighbor to the even more prosperous New York. So if you want to commute into Manhattan and not pay NYC property prices, NJ is the obvious alternative.
The Rental Reality
More people rent in New Jersey’s largest cities and suburbs than actually own their own homes. This is partly due to the rise of property investors in recent decades, and is a state of affairs that won’t change any time soon, perpetuating price rises.
Look Into Assistance Programs For First-Time Home Buyers
Thankfully there are programs in New Jersey for first-time homebuyer individuals and couples, giving people who are hoping to purchase a property the leg up they need to cope with ever-increasing prices.
For example, the New Jersey Housing and Mortgage Finance Agency has a scheme specifically designed to assist with saving for down payments, worth up to $10,000. This is provided as an interest-free loan that doesn’t come lumbered with monthly payments, and will typically be forgiven after five years, so long as you fall within the eligibility bracket.
There are also programs for people who have served in the fire service or the police, which might appeal if this is part of your current or potential career trajectory.
Be Savvy About Rates
If you are able to save enough for a down payment on a property in New Jersey, you need to think carefully about how the rates you’ll pay on this loan will impact both your monthly budget and the long term costs of the deal.
Mortgage rates may still be close to record low levels, but that doesn’t mean you can just blindly pick any package from any lender that offers one to you. Every fraction of a percent makes a difference, and the length of the mortgage term also matters.
You can save money over the years by choosing a mortgage with the lowest possible rate, and paying off more while rates are low, since this will be better than leaving your cash in a low yield savings account.
New Jersey’s property market is not likely to cool down any time soon, and even if prices do stagnate, they are probably not going to fall from their current levels.
Because of this, if you do want to live in NJ, you need to start planning and saving now, and also use all the assistance you have a