From the Record:
Buyers looking for new, single-family homes in New Jersey once had plenty to choose from. As the state’s suburbs boomed in the second half of the 20th century, developers blanketed farm fields with new houses aimed at middle-income buyers.
But those days are no more. Now, close to two-thirds of the home construction in the state is multifamily, led by rentals along the Hudson River. Single-family construction is piecemeal and pricey — a new home here or there, on pockets of land that open up, often when an older house is knocked down.
A new development on Roosevelt Boulevard in Paramus, not far from Route 17, is an example.
Six colonials with a shingle-style feel are being built on 2 1/2 acres that belonged to a longtime Paramus family, the Schreibers. Landscape architect William Comery approached the family about the property before the death of matriarch Alice Schreiber, and he is now working with two partners on the homes, which have asking prices of more than $1 million each.
Through August of this year, builders have started about 6,500 single-family homes in the state, about 36 percent of the total number of housing units started.
The main reason for this shift away from single-family: There’s just not enough space, especially in North Jersey. The state is already largely developed, and regulations bar further development in environmentally sensitive areas, such as the Highlands. As a result, land in the state has just become too scarce and too expensive to support a mass of single-family homes — particularly homes affordable to middle-income families.
“There’s very, very little developable land left for any significant size of single-family subdivision,” said George Vallone, president of the Hoboken Brownstone Co. in Jersey City and a past president of the New Jersey Builders Association. “This is the most built-out state in the country.”
There are a couple of larger-scale single-family developments on the horizon. Toll Brothers plans to build 78 luxury single-family homes on the site of the old Apple Ridge country club in Mahwah and Upper Saddle River. Toll also is planning to build 60 single-family homes, along with 160 town houses, on the site of the former High Mountain golf course in Franklin Lakes. Prices haven’t been set yet, but these homes will likely go for more than $1 million, said Craig Cherry, Toll’s division vice president for the New Jersey suburbs. He said Bergen County’s strong schools and location near New York City’s strong job market help support that price.
“We have found the market is very strong in this price point,” Cherry said.
Because the land is so scarce, it is expensive, which in turn drives up the price of the homes. New single-family homes in Bergen County — often on a lot where the developer has torn down an older home — tend to be pricey, and builders say the market of potential buyers thins out as the price tag heads toward (or above) $1 million.
“The problem is, if you’re paying $300,000 or $400,000 for the property and knocking it down, you can’t put up something and charge a couple of hundred thousand,” said Lou Chiellini, a Park Ridge builder who is active in Park Ridge and nearby towns. “I’m looking at a few new lots for $300,000 or $350,000. That means I can keep the house in the $850,000-$900,000 range.” Chiellini likes to keep the price under $1 million, because at $1 million, a state “mansion tax” of 1 percent kicks in, adding at least $10,000 to the buyer’s cost.
Chiellini said that as the housing market has improved, he’s notched up his production from two or three houses a year to four or five. The buyers are typically two-career couples with a child or two, moving from Manhattan, Brooklyn or Hoboken to the suburbs for the highly rated schools and more space for their children.