Home Sale Prices In Newark, New Jersey Have Gone Up Drastically

Based on our recent collection of data, we've noticed the prices of homes in Newark, New Jersey, have quickly increased since 2018. Newark is considered the third oldest city in the U.S., and is also the largest city in New Jersey, according to Movoto. Currently, the population is about 300,000, and there are around 114,410 housing units in the area. Only about 24% of those units are owned, while the rest are rented, according to Point2. These are interesting figures, as it seems that most residents in the area of Newark are only able to afford to rent rather than own. So, why have prices continued to increase?

The reason may be the basic answer of supply and demand. When there is high demand and low supply, prices are then typically driven upward, per Investopedia. We'll dive into why prices have continued to rise in Newark, and if there is any sign of them stopping.

Increasingly competitive housing market

Currently, the housing market in Newark, New Jersey is pretty competitive, per Redfin. Once a home is put on the market, it will usually receive about five offers within 40 days. The rising prices don't seem to be deterring buyers either, as our data shows that the current median sale price of a Newark home is about $535,000 — a $240,000 increase from the 2018 median of $290,000.

This may be due to a number of reasons, but a simple explanation may be because home construction has significantly declined in Newark since 1939, according to Point2. In 1939, about 28,000 homes were built. Since then, that number has drastically decreased to about 3,400 in 2010. So, with such a highly competitive housing market and increasingly low supply, it's no wonder home prices keep rising. Also, since Newark is such an old city, preserving historical homes is important to some of the community, but this can and will result in very low supply and high prices when new construction is avoided, per Sightline Institute.