When asked to describe the appeal of Jersey City, one condo shopper summed up his answer in one telling word: convenience.
Indeed, this is where any discussion about Jersey City inevitably begins. Query home buyers or renters on why they’re considering it, or ask brokers how they market it, and their responses will almost always cite the close proximity to Manhattan, the easy access to PATH stations, and the under 30-minute commute to the city.
Based on an informal survey of open house attendees, Jersey City – which once had a reputation for corruption, crime and urban decay, and has more recently attracted some real estate trailblazers – is now seeing a critical mass of young professionals.
And those who are looking for an alternative to the high-priced co-ops and condos in New York City or an upgrade from other nearby New Jersey apartments are finding that they have options, including a soon-to-be-opened Trump building and an area with an increasing number of amenities, including new shops and cafés.
Take Adrian, the condo buyer who invoked the word “convenience” when asked at a recent Saturday afternoon open house why he was looking in Jersey City. He’s an Internet technology professional who has lived in the area since 1997 and is now looking to upgrade from a one-bedroom facing the Hudson River to something even larger.
“I’ve had many opportunities to live in Manhattan,” said Adrian, who declined to give his last name. “But I didn’t want to because Jersey City is quieter, more affordable and cleaner.”
On this particular day, Adrian was browsing at Dixon Mills, a 467-unit former factory complex that began a condo conversion in March 2007. The property’s general manager, Jon Ha, said that 50 percent of his customers are from within Jersey City. He described Dixon Mills’ vicinity, a stone’s throw from Van Vorst Park, as “similar to Park Slope, Carroll Gardens or Brooklyn Heights because it has a neighborhood feel.”
Ha had two open houses. One was a 1,400-square-foot, two-level, two-bedroom penthouse unit for $675,000. The other was a 852-square-foot one-bedroom for $362,000.
“The rental market in downtown Jersey City is sizzling hot, so it makes sense to buy,” Ha added.
David and Meredith, both 26, were looking to do just that as they checked out an open house at 208 Brunswick, close to Hamilton Park. Having rented in the area – he works at a bank in downtown Manhattan, she at a law firm in western New Jersey – they are already Jersey City converts.
Meredith, who also declined to give her last name, said, “There’s a lot more character in the homes” than in Hoboken, where they’ve also looked.
Weichert Realty agent Dan Pelosi said Jersey City’s ability to retain its residents is a fairly recent phenomenon.
“People will rent or buy something here and then trade up,” Pelosi said. “It’s not like when they can afford a house, they move to the suburbs. That’s really a change, and it shows great neighborhood stability.”
Pelosi pointed to quality housing stock, as well as the city’s well-known affordability, for convincing people to drop anchor there.
“They’re not building any more Civil War-era brownstones,” he said.
At the end of 2006, New York Magazine pronounced that Jersey City would be the next “hot” destination for hip homebuyers. A handful of cute, newly opened cafés and boutiques along Grove and Barrow streets are further signs of that ascendance.
But what may raise Jersey City’s profile the most, according to Pelosi and several other realtors, is the imminent arrival of Trump Plaza Jersey City. The first apartments are expected to be available in April 2008.
The project, which includes one 50-story tower and one 55-story tower, will bring nearly 1,000 luxury units to the already-developing waterfront with amenities like a spa, a rooftop pool and a golf simulator.
“Donald Trump is a strong brand,” Pelosi said.
Still, many brokers have predicted that it is places just like Jersey City, which are in the process of major transformations, that will be first to feel the effects of the softening market. They said there could be a real problem in filling all of the new construction that was started during the construction boom, before the subprime crisis hit.
That is less because the Jersey City market had subprime borrowers and more because it draws a lot of young professionals from the city who may have more difficulty borrowing money in this less generous credit environment [see “Jersey City market skirts the housing storm” in the November 2007 issue of The Real Deal].
Some are already seeing the slowdown. “It’s dead across the board,” said Coldwell Banker agent Laura Ann Knecht. But others had a far less gloomy take, describing more of a sense of selectivity and patience than of a lack of interest.
David and Meredith, the banker and lawyer, dismissed the 1,100-square-foot loft-style apartment they saw at 208 Brunswick as “too much like a studio” for their taste. The asking price had already been dropped to $405,000 from $419,000.
Another couple, both mid-20s professionals, concluded that six blocks to the PATH station was just too far for them.
“It used to be that people would look at three properties, and they were ready to sign an offer; now, they want to see over 30, and they’re still not sure,” said another local Coldwell agent, who asked not to be named.
Jason Rowley, a 33-year-old investor who already owns two properties in Jersey City, said he worries “every day” whether this is a bad time to buy in the area. “The risk today is in its being overbuilt,” Rowley said. Nonetheless, there he was on a chilly pre-holiday Saturday scouting potential third properties.
“It’s hard to believe that in the long term, this place won’t retain its value,” he said.