Overview
New Jersey is the most densely populated state, with proximity to both New York City and Philadelphia driving much of its real estate market. The state offers diverse communities from urban centers to suburban enclaves to shore towns. High property taxes are a significant factor in total housing costs.
New Jersey Real Estate Market
New Jersey's market is driven by NYC and Philadelphia commuters seeking more space. Northern NJ suburbs command premiums for Manhattan access. Central Jersey offers relative value. The Shore communities see strong demand for vacation and retirement homes. High property taxes are the biggest challenge for buyers.
Property Taxes in New Jersey
New Jersey has the highest property taxes in the nation, averaging over $9,000 annually.
Average effective rate: 2.49%
Annual tax on median home: ~$11,952
STAR rebate: Replaced by Affordable NJ Communities rebate program
First-Time Buyer Programs
NJHMFA Programs: NJ Housing and Mortgage Finance Agency offers:
- First-Time Homebuyer Program - Below-market rates
- Down Payment Assistance - Up to $10,000
- Police and Firemen's Program - For first responders
- Smart Start - Income-restricted assistance
Closing Costs in New Jersey
New Jersey closing costs are moderate to high, typically 2-3% of purchase price.
Common costs include:
- Title insurance: Based on purchase price
- Mansion tax: 1% on sales over $1 million
- Realty transfer fee: $2-$6.05 per $500 (tiered)
- Attorney fees: Required
Frequently Asked Questions
New Jersey relies heavily on property taxes to fund schools and local services, with hundreds of independent municipalities and school districts. This fragmentation creates inefficiencies and higher costs than states with consolidated services.
Jersey City offers Manhattan views and PATH train access at lower prices than NYC. The city has seen tremendous growth in housing and amenities. Property taxes are lower than suburban NJ, though still significant.
High incomes in the NYC metro help offset costs. Some buyers focus on areas with lower property taxes. Many weigh commute time vs. tax burden. Careful budgeting for property taxes is essential.