New Jersey Real Estate Report

Jersey Feeling Flush

Posted on March 15, 2025 by grim

From Calculated Risk:

CoreLogic: 1.1 million Homeowners with Negative Equity in Q4 2024

CoreLogic® … today released the Homeowner Equity Report (HER) for the fourth quarter of 2024. Nationwide, borrower equity increased by $281.9 billion, or 1.7% year-over-year. The report shows that U.S. homeowners with mortgages (which account for roughly 61% of all properties) saw home equity increase by about $4,100 between Q4 2023 and Q4 2024, which is less than the gain of $6,000 in Q3 2023. The states that saw the largest gains were New Jersey ($39,400), Connecticut ($36,300), and Massachusetts ($34,400), while the largest losses were in Hawaii ($-28,700), Florida ($-18,100), and the District of Columbia ($-14,700).

Posted in Economics, Housing Bubble, National Real Estate, New Jersey Real Estate | 31 Comments

NJ adds jobs in January

Posted on March 14, 2025 by grim

From NJBIA:

NJ January Jobless Rate Stays Flat at 4.6%

New Jersey private-sector employers added 5,900 jobs during January, but significant losses in the public sector were primarily responsible for an overall drop in total employment to 4,387,700, according to federal data released Thursday by state officials.

Meanwhile, New Jersey’s unemployment rate held steady in January at a seasonally adjusted 4.6% where it has stood for the past eight months. The national unemployment rate in January was 4% and rose to 4.1% in February.

For January, six out of nine major private sectors recorded month-over-month job growth including professional and business services (+3,800); private education and health services (+1,300); financial activities (+600); manufacturing (+600); trade, transportation, and utilities (+200); and other services (+200).

The public sector recorded a loss of 12,000 jobs in January, mainly at the state level (-10,300). Sectors that also recorded losses include information (-500) and leisure and hospitality (-300). Construction recorded no change for the month.

Overall, the preliminary nonfarm employment estimates for January showed a decrease of 6,100 jobs to a seasonally adjusted level of 4,387,700. Although that represents a decline from December, total employment is still up by 36,200 jobs compared to January 2024.

New Jersey’s labor force participation rate was 64% in January, which is below the revised December rate of 64.1% and the post-pandemic peak of 65.0% in June 2023. The labor force participation rate calculates the percentage of the working-age population that is employed or actively seeking work.

The U.S. Bureau of Labor Statistics’ benchmark process, a required annual review and adjustment of previously released employment data at the state levels, shows that year-over year change (December 2023 – December 2024) in total nonfarm jobs was 0.9% (39,800 jobs) higher than the previously reported gain of 0.7% (30,300 jobs). The two-year gain from December 2022 to December 2024, however, was revised downward to 104,000 or 15,900 few jobs than previously reported.

The annual benchmarking process also revised the estimated employment losses caused by the pandemic. The revisions showed that in March and April of 2020, New Jersey lost a total of 723,700 nonfarm jobs or 17.1% of the state total nonfarm employment in February 2020. Revised estimates still indicate that New Jersey returned to its pre-pandemic employment level in April 2022.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 92 Comments

Can’t afford to buy, can’t afford to rent

Posted on March 13, 2025 by grim

From the NY Post:

Here’s where rents are rising the fastest in the New York area

New Yorkers may feel like the rent hikes never end, but it turns out that Newark, New Jersey residents are at the biggest disadvantage.

Just a quick train ride from Lower Manhattan, Newark had the fastest-growing rent in the New York Metropolitan area in February, according to a recent New York Metro Area Report by the online rental marketplace Zumper. Median rents for one-bedrooms in the New Jersey transportation hub grew 16.7% year-over-year.

A significant year-over-year decrease in rental prices earned Bayonne, New Jersey a spot at the bottom of the list. The small city is just across the bay from Newark and only a stone’s throw from Staten Island, but median rent in Bayonne plummeted in February by 15.6% year-over-year.

A one-bedroom in Bayonne, as of last month, will run you about $1,890.

While Newark and Bayonne are currently poles apart in annual rent growth, both cities were recently identified as the top two most affordable locations to buy a home near Manhattan.

Upstate Kingston clocked in as the cheapest city in the metropolitan area for renters, with a median price of $1,500 for a one-bed — though Kingston is not located off a commuter rail line. The former state capital is closely followed by Bridgeport, Connecticut — which is — at $1,650 per month and Paterson, New Jersey at $1,730 per month.

But the metropolitan area’s most expensive places to rent endure, unlikely to budge — NYC topped the median rent list at $4,330 for a one-bedroom, succeeded by New Jersey hotspots Hoboken, at $3,510, and Jersey City, at $3,050.

According to Zumper, you’re better off renting outside of those three cities. The median one-bedroom rent across the entire New York metropolitan area was just $2,486 in February.

Posted in Economics, Housing Bubble, New Jersey Real Estate, NYC | 105 Comments

NJ just got a little more office space

Posted on March 12, 2025 by grim

From NJBIZ:

DOGE cancels NJ leases totaling $2.76M in annual rents

As DOGE continues efforts to purportedly search for savings within the federal government, a number of commercial leases – including in New Jersey – are on the chopping block.

Nationwide, the so-called Department of Government Efficiency says it terminated 748 leases totaling 9.59 million square feet and representing approximately $468 million in savings. As of March 5, 14 of those cancellations affected New Jersey properties.

The sites range in size and location, from just over 1,000 square feet to upwards of 28,000 square feet and stretch from Atlantic to Essex counties. As of February 2025, the federal government leased 2.62 million square feet in New Jersey with annual rents totaling $83.12 million. Following the action from DOGE, the decrease in overall footprint amounts to nearly 4%, while the rent savings come in at just over 3%.

NJBIZ compared data from the DOGE website with the U.S. General Services Administration’s February 2025 lease inventory, the most recent available, to identify affected properties. Altogether the local lease agreements represent 100,821 square feet and a cumulative annual rent total of $2.76 million.

Posted in New Development, New Jersey Real Estate, Politics | 60 Comments

Taxes don’t make things better?

Posted on March 11, 2025 by grim

From NJ Business Magazine:

80% of CPAs Concerned NJ Budget Will Leave Economy Worse

Eighty percent of the 350 certified public accountants (CPAs) surveyed by the New Jersey Society of Certified Public Accountants (NJCPA) after Gov. Phil Murphy proposed his $58.1 billion budget for fiscal year 2026 on Feb. 25 said the budget will leave the state’s economy either marginally worse or significantly worse over the long term. Forty-seven percent said the economy would get “significantly worse” and 33% said it would get “marginally worse.”

With the looming threat of federal cuts to Medicaid and NJ Transit funding, 80% of the respondents also said the governor should have made additional cuts to prepare for the worst-case scenario. Survey respondents flagged several areas for cost-cutting measures that the Murphy administration should have focused on, which include government spending on non-core services, the state’s pension obligations, not paying out unused vacation pay to legislators upon retirement, eliminating duplication in municipal services, reducing taxes on personal income and real estate, making state spending more efficient and privatizing NJ Transit. They also recommended lowering corporate taxes to attract more companies to the state.

In his final budget address in office, Murphy highlighted having a proposed budget surplus of $6.3 billion. The proposal also includes a $7.2 billion payment to the pension system; $4.3 billion in property tax relief to New Jerseyans under its Direct Property Tax Relief program and $2.4 billion for the continuation of the Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) program; tax increases for the highest tier of realty transfer fees, sports betting, alcohol, adult-use marijuana and cigarettes, along with a new exemption for small business investment; $12.1 billion for K-12 schools; $1.23 billion for critical investments in state and local highway and bridge projects and $767 million for NJ Transit capital projects.

The governor discussed many initiatives for building New Jersey’s future, including the creation of its Economic Council, which provides a regular forum for the business community and state government to work together; providing $20 million in additional funding to attract innovative businesses and talented workers to New Jersey through Strategic Innovation Centers, the state’s program to cement leadership in the industries of tomorrow; and the success of its Cannabis Regulatory Commission, which has overseen billions of dollars of legal cannabis sales, including more than $1 billion in 2024.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 65 Comments

Where was COVID’s biggest housing impact?

Posted on March 10, 2025 by grim

From Axios:

How the pandemic transformed the housing market in 5 years

Home prices skyrocketed

Cheap borrowing costs and remote work unleashed a homebuying frenzy early in the pandemic — and sent prices soaring.

By the numbers: The median U.S. home price in January was $418,000, up around 45% from $289,000 five years ago, according to Redfin.

Those who own their houses sit on a mountain of wealth.

The big picture: A stubborn housing shortfall is keeping prices high, even as buyers have retreated, with 2024 sales hitting a nearly 30-year low.

Posted in Demographics, Economics, Employment, National Real Estate | 166 Comments

To the moon

Posted on March 9, 2025 by grim

From the Realtors:

Revealed: America’s Hottest Housing Markets—and Why Some Buyers Are Happily Paying Over Asking in These Popular Spots

New Jersey market is heating up

Philadelphia, grouped together with parts of New Jersey and Delaware, saw the greatest improvement in its market hotness, jumping 77 spots year over year. New York City, clustered with other sections of New Jersey, emerged as the second-most-improved market, having gone up 48 spots in the rankings, followed by Kansas City, MO, which was 45 spots hotter.

In New Jersey, portions of which ranked at 58th and 206th on the February hotness list, many counties are seeing homes sell in a matter of days, and tens or even hundreds of thousands of dollars over the asking price, thanks to a combination of scarce inventory and frenzied demand.

New Jersey real estate agent Joseph Aziz, with Joseph Aziz Real Estate, tells Realtor.com that he has been seeing buyers willing to pay extra to get into a home in a good location boasting top-notch schools, shopping districts, and parks.

“Ever since COVID started, the prices have been going up,” Aziz says. “There are a few periods of a two-to-three month span where the prices stay the same, but then it continues to go up.”

The agent adds that the only time you see price cuts in New Jersey nowadays is when “the property was aggressively overpriced” from the outset.

One example of New Jersey’s overheated real estate market comes from Bergen County, where in late October 2024 Aziz sold a five-bedroom, 4.5-bathroom home on a quarter-acre lot in Paramus for $1,725,000—which was $125,000 over the asking price.

Aziz says that it took him just six days to offload the property. During that time, he hosted two open houses, which attracted 130 house hunters and generated 27 offers.

The buyers were locals looking to upgrade their housing situation, Aziz recalls. They agreed to shell out six figures over the listing price without a home inspection or an appraisal, all because they were eager to close on a property with a good layout priced below $2 million.

Asked if he was surprised that his clients were willing to pay such a sizable premium, he says: “Not at all. I expected it to go over more. But I think [mortgage] rates being over 6.5% stopped it from being worse.”

Aziz explains that the local market is “very, very competitive,” especially when it comes to properties less than 10 years old with a larger square footage and a decently sized parcel of land.

“Less and less homes are being built, and people are choosing to renovate instead of build, so new construction is becoming harder and harder to secure,” he notes.

Posted in Demographics, Economics, Employment, Housing Bubble, New Jersey Real Estate | 51 Comments

Northeast continues to buck the trend

Posted on March 7, 2025 by grim

From CoreLogic:

US Home Price Insights – March 2025

Home price growth remains largely flat in the U.S. as we come out of winter. Although prices are expected to eek out gains in the coming year, there are stark differences between regions.

The Northeast continues to buck overall national trends, remaining unbothered by slower job growth, elevated interest rates, and ongoing affordability concerns.

Meanwhile, in the Mountain West, prices are the furthest from their record highs. In Hawaii, prices declined by 4.4%.

Despite this, national single-family home prices are forecast to reach a new peak in March 2025. Currently, the median sales price for all single-family homes in the U.S. is $375,000.

Posted in Demographics, Economics, Employment, Housing Bubble, National Real Estate, New Jersey Real Estate | 98 Comments

Spring Market!

Posted on March 6, 2025 by grim

From the Record:

Listings in NJ have increased, but remain well below 2024 levels. Our Feb market update

The spring market — which has typically been considered the busiest time for real estate — has brought most New Jersey counties a significant increase in new home listings from the start of 2025. But the Garden State’s inventory is still much lower than last year.

Overall, New Jersey had a total of 11,851 active home listings in February, including 6,902 new listings. This was a 4.96% decrease from last year, but a 7.11% increase from January 2025, according to Realtor.com’s monthly market data. The state also had a median listing price of $544,950, which was 1.5% more than last year and 1.86% more than last month.

As for the number of days active listings stayed on the market, listings in the Garden State typically stayed up for about 44 days. This was 14.29% more days than this time last year, but 23.48% fewer days than January 2025, according to Realtor.com.

And across the nation, February marked the 16th straight month of housing inventory growth, with a 27.5% increase, according to Realtor.com’s Monthly Housing Market Trends Report. The median price of homes for sale in February was $412,000, down 0.8% from last year, and homes spent about 66 days on the market.

Mortgage rates also dipped, although only slightly, during February. Rates for a 30-year fixed mortgage ranged from 6.76% to 6.89% and rates for a 15-year fixed mortgage ranged from 5.94% to 6.09%, Freddie Mac reported.

North Jersey’s spring market is kicking off a bit slower than it was this time last year, with Bergen, Passaic, Morris and Sussex all seeing decreases in new listings — with three of them being by more than 17% — compared to February 2024. On the other end, Essex and Hudson counties saw an increase in new listings during this time.

Bergen: 592 new listings (-2.63%)
Passaic: 202 new listings (-17.89%)
Morris: 300 new listings (-20.63%)
Essex: 412 new listings (13.81%)
Sussex: 144 new listing (-21.74%)
Hudson: 376 new listings (0.53%)

In North Jersey, Morris, Essex, Sussex and Hudson counties had active listings stay on the market for more days in February than this time last year. Meanwhile, Passaic County had active listings stay on the market for less days in February than this time last year, while Bergen County saw no change.

Bergen: 33 days (0%)
Passaic: 31 days (-10.29%)
Morris: 31 days (9.91%)
Essex: 33 days (8.2%)
Sussex: 50 days (12.36%)
Hudson: 41 days (0.61%)

Sussex and Hudson counties were the only places in North Jersey that saw median listing prices decrease from this time last year. Sussex County had a 0.63% decrease with a median listing price of $399,950, while Hudson County had a 5.76% increase with a median listing price of $612,500. Otherwise, all other North Jersey counties saw an increase.

Bergen: 2.62%
Passaic: 4.23%
Morris: 0.07%
Essex: 9.98%

Posted in Demographics, Economics, Housing Bubble, New Jersey Real Estate | 146 Comments

Tariffs good for home prices?

Posted on March 5, 2025 by grim

From CNBC:

Here’s how tariffs will hit the U.S. housing market

From lumber to drywall to appliances to finishings, much of what goes into a U.S. home comes from outside American borders.

The cost of those products is about to go up, as President Donald Trump’s administration imposes tariffs on China, Mexico and Canada. Goods from China are now subject to a 20% tax, an increase from a previous 10% tax, and those from Canada and Mexico face a 25% tax. Canadian lumber was already subject to separate duties of 14.5%.

The new tariffs could increase builder costs anywhere from $7,500 to $10,000 per home, said Rob Dietz, chief economist at the National Association of Home Builders, citing estimates from U.S. homebuilders. Last year the NAHB estimated that every $1,000 increase in the median price of a new home prices out roughly 106,000 potential buyers.

The greatest impact to homebuilders will be from lumber cost increases, which are expected to total about $4,900 per home on average, according to Leading Builders of America, the trade group representing most of the nation’s publicly traded homebuilders.

Roughly a third of the lumber used in U.S. homebuilding comes from Canada, and domestic lumber producers are expected to raise their prices to match the imported supply.

“Since Trump first imposed the tariffs on Feb. 1, which were then delayed, we’ve seen some increase in buying with prices for Western Spruce-Pine-Fir two-by-fours increasing 13%,” said Paul Jannke, principal at Forest Economic Advisors. “With the re-imposition of the 25% tariff on Canadian goods shipped to the U.S., we expect Canadian producers will stop shipping lumber to the U.S. Meanwhile, dealers, who have been hesitant to buy given uncertainty around the tariffs, will need to step up purchases ahead of the coming building season. This will drive prices higher.”

Lumber futures are up 5% in the past week and were rising steadily Tuesday.

Posted in Crisis, Economics, Housing Bubble, National Real Estate, Politics | 110 Comments

Crash starts in Florida?

Posted on March 4, 2025 by grim

From the NY Post:

Is Florida heading towards a new housing crisis?

A housing crisis is brewing in Florida.

A confluence of decreased homebuying and increased housing stock has created a perfect storm for would-be sellers in the Sunshine State.

The number of unsold homes in Florida rose almost 23% year-over-year, according to a new report by Redfin. The stale housing stock and a surge of cancellations has led to plummeting home prices. Some sellers have slashed prices up to 40%, and others have taken almost half a million off their asking prices, according to the Daily Mail.

Housing experts point to the state’s untenable housing fees, a glut of new post-pandemic housing stock and, of course, natural disasters.

“Bidding wars are very rare these days,” Jacksonville real estate agent Bryan Carnaggio said in a statement in the Redfin report. “With this many houses for sale, a home basically needs to look like it’s out of a magazine — and be priced fairly — to get multiple offers.”

“The end of January saw 172,209 unsold homes in Florida — the state’s highest unsold inventory since Redfin began collecting data in 2012.”

More than 41,000 home-purchase agreements in the US fell through in January, according to Redfin, and Florida recorded the highest share. Pending home sales in Florida fell 9.3% year-over-year in January.

The state’s condo inventory, in particular, is at an all-time high, according to Redfin. The single-family home inventory isn’t far behind.

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 145 Comments

NJ going to cost you a little more next year

Posted on March 3, 2025 by grim

From the Star Ledger:

You won’t believe what N.J. is trying to tax now. Here’s the full list.

The list of taxes and fee changes in the proposed budget include:

Brand-new taxes: The state anticipates collecting $277 million by taxing go-cart racing, laser tag, bowling, interior design services, horse training, vehicle trade-ins, some comped meals, tickets, and hotel rooms, digital services and second-hand airplane sales. Murphy also wants to end a sales tax exemption and the $20,000 sales tax cap on boats.

Cigarettes, alcohol, and vapes: A tax hike of 30 cents, up from 10 cents, on vaping liquid would net the state $10 million. A 10% tax increase on alcoholic beverages would bring $18.5 million. The tax on a pack of cigarettes would climb 30 cents to $3.00, generating $41 million.

Luxury homes: Homes and other property with a pricetag between $1 million and $2 million would be assessed a 2% tax, up from 1%, and 3% percent tax on property that sells above $2 million. These increases are expected to generate $317 million in state revenue.

Internet gaming and sports betting: Casinos now pay a 13% tax on on revenues earned through sports betting and 15% on internet gaming proceeds. Murphy proposes raising both to 25%. The state expects to gain $402.4 million.

Taxes on marijuana license holders and “intoxicating” hemp products: License holders now pay $2.50 per ounce of cannabis under the Social Equity Excise Fee, but Murphy wants to raise it to $15 per ounce. A new $30 per ounce tax would also be levied on the sale of intoxicating hemp products. This would generate about $70 million.

Truck traffic: There’s a $2 truck traffic excise fee on warehouses, raising an estimated $20 million while also “mitigating the impact on new warehouse development.”

Guns and ammunition taxes and fees: Details were not released but the budget anticipates $8 million would be raised through a new excise tax on guns and ammunition, as well as higher firearm fees.

Drones: A new excise tax on unmanned aircrft systems, or drones would raise $5 million.

The proposed budget also eliminates some baby supply items from the 6.625% sales tax. They include cribs, strollers and nursing bottles.

Posted in New Jersey Real Estate, Politics, Property Taxes | 121 Comments

Who makes, who takes

Posted on March 2, 2025 by grim

From Bloomberg:

The Blue State-Red State Tax Divide Isn’t Really That Fair

The Trump administration’s many attempts over the past couple of weeks to halt federal spending have met mostly with approval from Republicans on Capitol Hill and outrage from Democrats. That’s sort of what one would expect given that Trump is a Republican, but also kind of weird in that states and congressional districts that vote for Republicans are as a rule much bigger net beneficiaries of federal spending than those that vote for Democrats.

With the federal government running a deficit of 5.9% of gross domestic product in the 2022 fiscal year — the most recent available in the state balance of payments data compiled by the State University of New York’s Rockefeller Institute of Government — even blue states got more back from Washington than they sent there. But their deficit amounted to just 0.4% of GDP. The red-state shortfall was 3.1% of GDP, with interest payments accounting for most of the rest of the federal deficit.

Blue states did receive more federal largesse per capita than red ones in 2022, but that can be chalked up to the anomalous cases of Maryland and Virginia, where many federal agencies and contractors are based (the District of Columbia is not included in these statistics). Remove those two states from the calculations and per capita spending is slightly lower in blue states than in red ones. And all but one of the 11 states that paid more into the federal government in 2022 than they got back out voted for Kamala Harris in 2024 (Utah being the exception).

It’s a pattern that reveals inequality as well as wealth: The district with the lowest income tax revenue in the US in 2022, New York’s 15th in the South Bronx, was just across the Hell Gate span of the Robert F. Kennedy Bridge (formerly the Triborough) from the district with the highest, and a 45-minute walk through Harlem from the third-highest. The second-lowest-revenue district, California’s 21st in the San Joaquin Valley, was about 60 miles as the crow flies from both the second- and fourth-highest. But in New York and California, the rich districts outweigh the poor ones, and both states send more to Washington than they get back.

Posted in Demographics, Economics, Employment, National Real Estate | 55 Comments

Good time to buy?

Posted on March 1, 2025 by grim

From Newsweek:

Should You Buy a House in March? Experts Weigh in on Housing Market

Heading into March 2025, potential homebuyers are facing significant challenges such as high mortgage rates, rising home prices and inflation. Additionally, factors like the threat of tariffs further complicate the market, creating more obstacles for buyers.

The housing market is experiencing significant fluctuations, with interest rates remaining high and inflation impacting affordability. These factors have broader implications for potential homebuyers, influencing their ability to secure favorable mortgage rates and find affordable homes. External factors, such as tariffs on key materials, could also drive up housing costs, further complicating the market for buyers.

Despite these challenges, there are opportunities for those who navigate the current conditions strategically.

The current housing market presents both opportunities and challenges for potential buyers. Mortgage rates remain a pivotal factor for buyers and have remained high, which had led to a decrease in mortgage applications to start the year, as buyers were hesitant to commit to higher monthly payments.

However, the Mortgage Bankers Association predicts that rates will gradually decline from 7 percent to 6.4 percent throughout 2025 and remain around 6.3 percent for 2026. With rates currently sitting at 6.75 percent, some buyers will want to take advantage of the recent decrease in rates, while others may choose to wait for further rate reductions before committing.

In recent months, the U.S. housing market has experienced a slight uptick in inventory. This can mean more options to choose from, potentially reducing competition for each home. Zillow forecasts a 0.9 percent home value growth in 2025, indicating a relatively slow pace. This modest increase suggests that as more homes are becoming available, prices will rise at a slower rate.

A Reuters poll suggests that housing affordability may see modest improvement this year, primarily due to anticipated interest rate cuts rather than an increased supply of homes. This implies that while financing may become slightly more accessible, the limited housing supply continues to pose challenges.
…

Both Beene and Kevin Thompson, founder and CEO of 9i Capital Group, recognize the impact of external factors, such as tariffs, on housing costs. Beene warns that tariffs could drive up prices by thousands of dollars and Thompson emphasizes how rising material costs will force builders to pass those increases onto buyers. Ultimately, both suggest that the housing market in March will remain difficult for buyers.

Despite these challenges, there are still opportunities for buyers who are willing to navigate the current market conditions. The Texas Real Estate Research Center told Newsweek buyers who have flexibility in negotiations or the ability to walk away from unfavorable deals will benefit most from shifting market conditions.

Beene suggests homebuyers looking for new homes might benefit the most. He notes new home builds are being offered at more aggressive pricing, as these properties started production when housing was easier to move. And Thompson notes cash buyers have an advantage, as they do not rely on banks and have more pricing power in any market.

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 68 Comments

NJ Wealth Tax

Posted on February 28, 2025 by grim

From northjersey.com:

Is Murphy’s proposal to increase NJ’s ‘mansion tax’ a good thing? Experts have concerns

Gov. Phil Murphy’s 2026 fiscal year budget proposal includes $1.2 billion in new sales taxes and fees on things like alcohol, warehouse truck traffic, drones and several services that are not currently taxed, among other things.

But one of the biggest topics of contention is a proposed tax increase that would make buying a house in New Jersey’s already pricey real estate market that much more expensive.

The New Jersey mansion tax — formally the “Additional fee on certain transfers of real property over $1 million” — is currently a 1% fee on residential and commercial sales of more than $1 million. This fee is typically paid by the property’s buyer at the time of closing, but it can be negotiated to be covered by the seller.

Under Murphy’s proposal, this tax would increase from 1% to 2% for residential and commercial sales between $1 million and $2 million. And properties that sell for over $2 million would be subject to a 3% tax.

“This increase is expected to generate $317 million in FY2026 and bring total collections to $554.2 million,” a summary of the proposed budget reads.

The New Jersey mansion tax was originally signed into law in 2004 by then-Gov. Jim McGreevey, a time when home sales of $1 million or more were far less common than they are today.

Overall, Zillow estimated that in 2024 there were 21 New Jersey municipalities with million-dollar starter homes. This was said to be an increase from 15 in 2023 and two in 2019, as previously reported by NorthJersey.com.

And as of this month, New Jersey had 86 towns with median listing prices of more than $1 million, according to Realtor.com. This included 25 with median listing prices above $2 million.

Posted in Demographics, Economics, New Jersey Real Estate, Politics, Property Taxes | 268 Comments