Home to the infamous Jersey Shore with over 100 miles of coast, Atlantic City with glitzy high-rise hotels and casinos, over a dozen Fortune 500 companies, and plenty of culture and character, New Jersey draws in plenty of people, especially with its prime east coast location.
With New Jersey right smack dab in between New York, Boston, and Washington, not to mention nearby Philadelphia and Baltimore, real estate in the Garden State is in high demand.
While New Jersey housing is typically cheaper than its New York neighbor, before you pack your bags, you’ll want to know how much of your paycheck will be going to your mortgage, taxes, insurance, as well as other extraneous costs of living in New Jersey.
Certainly, there are a ton of factors you need to consider before you buy a home in a new state or city, and to help you navigate the New Jersey housing market you’ll want to take advantage of working with an experienced, local real estate agent.
Your agent can help you set realistic expectations during your move, provide invaluable insight on how much you’ll need to budget for, and give you a good idea on the kinds of costs you should expect when purchasing your new home.
Typical Home Prices in New Jersey in 2019
Luckily for you, New Jersey home prices are relatively affordable, especially when you compare prices to neighboring New York and Massachusetts. While New York sees median home values northward of $650,000, New Jersey’s median home value is half as much at $327,700, according to May data from Zillow.
New Jersey’s home values have risen 4.1% in the past year, and are predicted to increase an additional 1.8% in the coming year. The current median home listing price in the state is $339,000, but on average, homes sell for $50,000 less at $288,700.
However, eight of New Jersey’s counties are among the wealthiest in the nation boasting high-priced, luxury mansions. Indeed, in Alpine, the most expensive city in state, you’ll find the median home price reaches $2,430,400.
The Garden State is currently in a very hot sellers market due to low housing inventory in conjunction with rising home prices, making it more difficult for buyers to find homes in their price range. Indeed, you’ll only find 17.2% of homes within the range of $114,901 to $229,757.
The majority of homes fall within the range of $229,758 to $344,794. So if you’re looking to buy a home, you’ll want to time the New Jersey market to get the best price. Aim to buy a home after June in the late summer months to score lower home prices.
How Much Are New Jersey Property Taxes?
As part of the home buying process, you’ll want to factor property taxes into your budget — especially in New Jersey where the property tax rates are literally the highest in the country.
In New Jersey, the effective real estate tax rate, which is the total amount of property taxes paid each year as a percentage of the total value of all occupied homes, is 2.44% which is quite high when you compare it to Hawaii with only a effective tax rate of 0.27%.
At a 2.44% tax rate with a median New Jersey home valued at $327,700, you can expect to pay around $8,001.88 in property taxes each year. This breaks down to about $667 per month.
However, your property taxes can vary as the amount is calculated from your home’s determined value. Your home’s value can be calculated in several ways, one of which is an assessor compares the value of your home to other similar homes sold in the area.
Another way is to assess how much it would cost today to reproduce your home from the ground up. Certainly, the home’s age and the value of the land your home sits on is factored into your home’s value as well.
Once your home’s value is determined, the value is then multiplied by the local mill rate, i.e. the tax rate imposed on your property. One mill equals one-tenth of one cent, meaning for every $1,000 of your property value, one mill equals $1.
And depending on your city and region, you could be charged several mills levied by your city, county, and school district which will all be added together to figure out your total property tax.
For example, if your home is valued at $300,000 with a mill levy of 40, you’ll be paying $12,000 in local property New Jersey taxes each year.
Average Homeowners Insurance in New Jersey
In case something terrible happens to your home, you’ll want to be covered. And while homeowners insurance can get pricey, there are a number of factors that can help reduce the cost — from choosing the right deductible to buying a home close to a fire department.
With homeowners insurance you’ll typically get coverage for, your dwelling, in case you need to repair any damage, liability coverage in the event any belongings are stolen or damaged, as well as medical insurance in case a guest gets injured on your property.
Typically, you’ll want to buy enough coverage to pay for the replacement of your entire home plus $300,000 in liability to cover those additional medical bills as a result of injury or to replace stolen items.
So how much should you expect to pay for homeowners insurance in New Jersey? Luckily, unlike property taxes, New Jersey falls around the national average. At only 1% above the nation’s average, you can expect to pay about $1,092 annually or $91 per month.
However, the price of your homeowners insurance may be higher or lower than $1,092 depending on the age of your home, what materials your home is built with (wood is riskier than brick), your claims history, credit history, and perhaps the most important factor, location.
For instance, if you live on the New Jersey coastline, your insurance may spike as your home is more prone to wind, water, and flood damage. On the other hand, if you live more inland, your rates could go down as you’re not situated in a hurricane or flood zone.
Common Home Maintenance and Repair Costs in New Jersey
As the majority of houses in New Jersey hail from between 1940 and 1969, many are in need of repairs. Several common problems of homes from this era include poor insulation and old, leaky windows.
Indeed, many homes from the 40s and 50s were built without any insulation at all. You may have to add insulation or replace the old insulation.
If you do it yourself, it can cost from around $500 to $1,000 but if you call in the professionals it might run you from $1,500 to $2,000. Whichever you choose, having great insulation can help in the long run reducing your heating and cooling bills by $500 each year.
Since New Jersey does see cold winters, you’ll also want to make sure your windows are airtight — not only to save on your heating bill but frankly, to keep you warm!
In these older New Jersey homes from the 40s, 50s, and 60s many of the windows are not properly sealed and have cracked and aging window frames that may in fact be the originals from when the home was first built.
For energy efficient window replacements you can expect to spend between $300 to $1,000 per window while replacing wooden window frames can run you $150 to $1,300.
Other Costs of Living in New Jersey to Consider
As you’re calculating the costs of moving to the lovely Garden State, you’ll want to keep in mind there’s more to budget for than simply a down payment and property taxes.
For instance, New Jersey winters get cold and see an average of 23 inches of snow each year. Along with buying some proper boots and a winter parka, you’ll also need to factor in your energy bills.
You’re bound to be cranking up the heat in the winter, upping your utility bills. And if your furnace breaks, it can be expensive to replace. Additionally, if you have an especially long driveway, you may want to consider investing a quality snowblower.
Certainly shovels are cheaper, but you’ll quickly find shoveling feet of snow is both time-consuming and pretty exhausting.
Putting aside the frigid winter weather, one of the great perks of living in New Jersey is your prime location. You’ll definitely want to take advantage of your easy access to New York City and Boston.
Be sure to budget for MetroCards along with any taxi fare you might need when you get to the city. Not to mention, New Jersey itself has its own great transit system. For instance, if you live in Newark with convenient public transit, you may utilize the light rail on a daily basis.
But no matter which New Jersey city you move to, you’ll likely run into unexpected costs. So to help curtail any major surprise expenditures, it’s always a great idea to consult with friends or family who are familiar with the area as well as with a local, experienced real estate agent.
Find a Top New Jersey Real Estate Agent
By partnering with a great real estate agent, you’ll be able to take advantage of their expertise and knowledge so the entire home buying process is effortless.
Indeed, working with a Clever Partner Agent can relieve some of the stress of moving and help you set realistic expectations for how much it will actually cost you to live in New Jersey. This way you can plan your budget and save accordingly.
Not only will a Partner Agent work to get you the best price possible on your home, but they also offer a Home Buyer Rebate where you’re eligible for a $1,000 rebate on homes over $150,000 and up to 1% back on homes over $500,000. That money can go towards your closing or moving costs when you buy a home.