For over a decade, two New Jersey counties have generally led the state in new residential construction, and after the recession, they were the first to rebound, according to the latest report by Marketlogics. Hudson County ranked first in multi-family permits and Ocean County led in single-family permits, making them the king and queen of building permits in the state.
Michael A. Kehl, president of the independent market research firm Marketlogics, which specializes in property development research, explained that rising building permits are a good measure of the health of the construction industry.
By year-end 2014, homebuilders obtained 5,641 permits for multi-family projects in Hudson County, reaching a record high. And in Ocean County, single-family permits reached 3,332, rising steadily since 2012.
In the case of Hudson County, the increase was led by Jersey City’s multi-family building boom, which outpaced the other towns in the study – Hoboken, Harrison, Secaucus, Weehawken, West New York and Bayonne.
“In 2015, January’s numbers were still strong for Hudson and Ocean Counties with a sharp increase in single-family permits in Jersey City,” added Kehl.
“Housing has always been the biggest driver of the economy. When housing increases, so does the rest of the economy,” said Kehl. “Since the recession of 2008, housing has yet to fully return to normal levels. Once it comes back, we’ll see the economy experience an even greater rebound.”
In Ocean County, retirees have been fueling the market for age-restricted housing for several decades. Their numbers dropped significantly during the 2008 recession, which prevented seniors from selling their existing homes, according to Kehl. Figures now reveal that they are returning to the marketplace. Only a few of Ocean County’s municipalities are making a comeback. Leading the municipalities are Toms River, Lakewood and Stafford, respectively. And while Jackson and Barnegat were strong performers in the past, they have not seen the strong single-family building activity evidenced in other towns. To date, Ocean County has yet to return to 2004 levels when building permits reached nearly 4,500.
Whether the economy will generate the jobs needed to sell or rent the units being built in Hudson and Ocean Counties remains unclear, according to Kehl. “Many, but not all, of those jobs are New York City-based. Over 24 percent of Hudson County workers commute to the city. They choose to live across the river in New Jersey where the cost of housing is more affordable.”
Marketlogics noted a distinct shift in the ratio of single-family versus multi-family construction permits in the state over the last 10 years. In 2004, more than twice as many single-family construction permits were issued compared with multi-family permits. By year-end 2014, figures showed that single-family construction dropped to multi-family levels, reaching slightly over 10,000 permits.
New Jersey’s strongest markets remain in urban centers where apartments are in demand. “The recession has strengthened the apartment market as newly employed Millennials (due to student debt and stricter mortgage qualifications), as well as some previous homeowners, fled to apartment rentals,” said Kehl. “This is a trend we’re seeing nationally, and not just in New Jersey.”
“In general, I expect to see positive trends in multi-family construction activity in New Jersey through 2015,” said Kehl. “I’m optimistic that multi-family activity will continue to shine while for-sale housing will increase albeit at a slower pace.”Related Articles: