Since 2014, Bayonne has gained fervor as a metro burb for businesses looking to expand or relocate. Lower costs for land, taxes, and energy has attracted a rise in NYC commuters and homeowners too. But, that’s just the tip of the iceberg.
Google the City of Bayonne, and you’ll find a kindred spirit between visitors and townspeople alike. It’s a 5.8 square mile melting pot of five-star restaurant reviews, mixed-use buildings, and residential dwellings tucked along the Hudson River. Meanwhile, remnants of 20th-century architecture create an old-world charm for brick and mortar storefronts. And, converted landmarks lay claim to former industrial tycoons, such as Standard Oil, a massive refinery and economic engine in its heyday.
Fast forward to the present, and Bayonne is still the quintessential working-class city, yet its sprawling housing market is now a lucrative groundswell. In the third quarter of 2018, the median sale price of homes rose by $70,000 – more than 19 percent from the previous year [1]. Properties are also on the market for less time, averaging 35 days — down from the standard 58 days just twelve months prior.
Median rental prices have also increased by 7 percent year over year. Since 2010 (nearly a decade in the making), 6,000 apartments have reached completion, are under construction, or have been submitted for approval [2]. This is extremely encouraging for investors especially where the big picture is concerned. In fact, overall land prices – per square foot in Hudson County – have nearly tripled from 2006 to 2015 (averaging $81.76).
Bayonne Costco Tract Gets a Residential Facelift
The latest land grab is Bayonne’s former MOT site, where a 15-acre corridor is slated to house 651 luxury rentals. Lifestyle amenities will feature a rooftop resort-style swimming pool, among other perks, occupying 25,000 square feet of space [3]. In May of last year, the city greenlighted the construction of 162 rental units in the same vicinity as the St. Joseph Cathedral [4]. And, on a much grander scale, 919 existing rental units across Bayonne and Union City were snatched up, via private investing, for a cool $130 million.
New Jersey Rentals: A Boon or Bust
Declining affordability in primary and secondary markets, not only puts Bayonne “on the map” but assumes a steady increase in rental prices for the foreseeable future. Percentage of renter-occupied housing has ballooned to 62.9 percent of the population. Together with low vacancy rates and proximity to New York commerce, Bayonne is an incubator of binary growth and profit.
The Opposite of a Government Shutdown
Demand for Bayonne’s rapid-fire revitalization has received strong backing from government too. In 2014, Mayor James Davis likened himself as being “pro-development” using Jersey City as a model worthy of replication. Additionally, projects such as Bayonne’s Costco tract garnered a 30-year tax abatement. This means 10 percent of the project’s revenue will be allocated to the city, and exponentially increase over time.
Reinvested dollars are not only a show of reciprocity but a pledge for sustained reform. And, for the majority of urbanites, proximity to bustling epicenters, such as Manhattan, makes living on the outskirts a quiet, yet attractive juxtaposition.
Bayonne’s Residential Bubble
- 8 square miles and has a population of approximately 66,000
- Classified as a Tier 3 rental market in the New York Metro area (characterized by a medium to high population density, transportation access to Prime and Tier 2 markets, and restaurants with a focus on serving the local inhabitants)
- Stable, long term population that’s being supplemented by new incoming residents
- Low crime rate with families settling in as permanent home buyers
- Median home prices for the 1 to 4 family range jumping to $417,500, while condo prices surge upwards of 66 percent as reported in the third quarter of 2018
- Median rental prices increasing to 7 percent, year over year, averaging a $1,500-$1,600 monthly price tag
This is investing in the real economy where long-term commitment meets long-term wealth. If you’re breaking into the high-end world of private real estate, reach out to our team at Circle Squared Alternative Investments. We’re located just outside of the Big Apple, where commerce and community collide.
*This is the first blog in an informative two-part series highlighting the waterfront metropolis, Bayonne.
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Sources:
[1] (Elamroussi, The Jersey Journal, 2018)
[2] (Hughes, The New York Times, 2018)
[3] (Zeitlinger, NJ.com, 2018)
[4] (Marroquin, Jersey Digs, 2018)