One of the best things about the Northern New Jersey multifamily market is its proximity to New York City. The second-best thing is that it is not New York. Crossing the Hudson is a logical step for those wanting to stretch their budgets but stay within reasonable reach of New York’s jobs and amenities.

Relocating to Jersey City, for instance, can significantly reduce living expenses for those working in the Financial District, while potentially maintaining the same commute time. Average Manhattan asking rents in August 2025 were $5,596 according to RentCafe, compared with $4,518 in Hoboken, $3,791 in Jersey City, and further north, $2,981 in Englewood and $2,623 in Hackensack.

Exiles from New York can be divided into several groups. There are the Gen Z-ers and younger Millennials who are tired of paying exorbitant rents for tiny spaces, high-income professionals looking for more affordable amenities, and young families seeking room to raise their children who haven’t successfully cracked the Northern New Jersey housing market — one of the tightest and most expensive in the country. They can all find suitable rentals in Northern New Jersey.

But there are also homegrown drivers of demand. Proximity to New York has led major companies — not just people — to locate in the Garden State. The area is a hub for the healthcare and life sciences industries. The headquarters of pharmaceutical giant Merck is in Rahway (Union County), the medical device manufacturer Beckton Dickinson in Franklin Lakes (Bergen County), and medical testing leader Quest Diagnostics in Secaucus (Hudson County). Major financial and technology companies based in the area include Prudential Financial in Newark (Essex County), ADP in Roseland (Essex County), and Cognizant Technology Solutions in Teaneck (Bergen County). These companies and others like them support a steadily growing employment base.

Enviable Fundamentals Drive Growth

Thanks to this demand, the Northern New Jersey multifamily market has seen exceptional rent growth even with developers delivering more than 10,000 units a year for the past half decade. Out of the top 30 largest apartment markets, only five (Detroit, Columbus, Chicago, Kansas City and New York) are forecast to see greater rent growth than Northern New Jersey’s 2.7% projected increase over the next year, according to Yardi Matrix.

In addition, RentCafe has named the region, which it defines as Bergen, Essex, Hudson, Morris, Sussex and Union counties, as one of the most competitive multifamily markets in the country, ranking third just behind Miami and Suburban Chicago twice in the past 18 months.

According to the June 2025 report, the region has a 95 percent occupancy rate, with 10 prospective renters for every vacant apartment, and an enviable lease renewal rate of 77.9 percent, the best in the top 20 metros. While Northern New Jersey recently slipped in the RentCafe rankings to 11th place, largely due to a 0.93 percent year-over-year increase in apartment supply, apartment openings in 2025 are slowing as the year progresses, and the region should be moving back up.

Developers Are Keeping Busy

While deliveries are slowing, the Northern New Jersey market has hardly slipped into the doldrums. Jersey City (Hudson County), with its stunning views of Manhattan, remains hot. The first of Kusher’s two 64-story luxury towers known as The Journal began leasing this summer with studio rents starting at $3,000. When completed in 2026, this $1 billion project will include 1,753 units, a 40,000-square-foot-amenity center, and a Target.

Also scheduled to open in 2026 is the first phase of the upscale West Side Square development. Its 477 units will be followed by a second phase of 357 units. And 505 Summit Street topped off in May. This 54-story residential tower will offer 605 units when it opens in 2026.

The activity in Jersey City notwithstanding, development is broadly distributed across the region. To cite just a few examples, the first phase of The Marq Teaneck (Bergen County), a 256-unit luxury building that opened earlier this year, leased up so quickly that the developers have already broken ground on an adjacent parcel and plan to double the size of the project. Avalon Wayne (Passaic County), with 473 apartments and townhouses, is scheduled to open this year. And at least two properties have opened in Morris County, a 265-unit luxury apartment in East Hanover and a 60-unit property in Wharton.

In addition, suburban municipalities have also seen an uptick in new deliveries because of recent fair share housing settlements throughout the state. These efforts date back to a series of court cases beginning in 1975 arguing that municipalities must regionally allocate a “fair share” of affordable housing to low- and moderate-income families.

There are also a number of projects on the drawing board. The Ironbound district in Newark (Essex County) may soon see its largest development to date: a 2.5-acre site is slated for transformation into 1,400 apartments through an $800 million project by Brooklyn-based Chess Builders LLC.

In addition, a series of developers are focusing on the Essex Street Corridor in downtown Hackensack (Bergen County), which is close to Hackensack University Medical Center, county government and the Essex NJ Transit station. Three projects spanning three blocks have received final site plan approval and total more than 500 affordable and market-rate units. Developers expect to break ground in 2026.

Another hotspot of development is Westfield Garden State Plaza in Paramus (Bergen County), which is the 16th largest shopping mall in the United States. Investors plan to redevelop parts of the mall, adding 1,400 apartments, including a first-phase 575-unit luxury building, seniors housing, a hotel and a regional bus transit center.

Signs of Life in Investment Market, but Room to Grow

The steady stream of new projects entering the market has not been accompanied by a commensurate rise in transactions. One factor is that a large segment of New Jersey multifamily stock has been developed by a group of family businesses that tend to hold properties for the long term. In itself, this puts a ceiling on transaction volume. However, the jump in interest rates that affected all national markets has had the largest effect.

Nonetheless, investment activity in the Northern New Jersey apartment market has begun to recover. The rolling 12-month transaction volume increased by 20.5% percent year-over-year to $1.7 billion as of 2Q 2025, according to MSCI Real Capital Analytics. The average price-per-unit in the two recent quarters was the highest of the past 10 years, illustrating investor demand for high-quality apartment properties. However, transaction volume still lagged the five-year annual average of slightly more than $2 billion between 2015 and 2019. 

Most deals are small. For instance, in the second quarter of this year, a developer sold a new boutique 31-unit rental building in Jersey City for $625,000 per unit. At the other end of the scale, a 28-unit garden-style property in Belleville (Essex County) changed hands for $168,000 per unit. As usual, Jersey City is the exception that proves the rule. In May, a group of investors purchased the 829-unit Hudson House complex for an undisclosed sum just as its second and third phases completed construction.

There are also a smattering of new investment opportunities appearing on the market. Developers are selling a new 42-unit apartment building across from NJ Transit’s Netherwood Station in Plainfield (Union County). An out-of-state investor is selling VUE Hackensack, a 78-unit luxury building that it purchased three years ago. And after completing the two-year conversion of a Jersey City Art Deco hospital building to 62 apartments, the developer is putting it on the market.

By and large, transaction activity in New Jersey is slow and episodic, just as it is in the rest of the country. Faced with uncertainty and volatile rates, market participants are sitting on the sidelines. Yet given Northern New Jersey’s strong fundamentals and reliable demand, it is an obvious target for investors once they gain more clarity. Those who return early will reap the highest reward.

This article originally appeared in Multifamily & Affordable Housing Business.