NY vs. NJ: Who Has the Hotter Rental Market?

Have you examined the multifamily market over the past five months?

U.S. rental activity has slowed in 2024—but you won’t believe who’s still on top! 

After years of booming rental activity, 2024 has brought somewhat of a stall for multifamily markets across the country. 

Even the most sought-after cities have simmered slightly since 2023, as investors are left to wonder: What do the year-over-year stats mean for my property’s future? Will the second half of 2024 bring fewer renewals and more vacancies? Or will my units enjoy the same competitiveness of the past couple of years? 

What we found is both reassuring (and pretty exciting!) for commercial investors who have planted their seeds in our local neighborhoods. 

Let us explain!

As rental markets cool, most multifamilies stay warm  

Everest consulted a RentCafe report analyzing 139 of America’s largest rental markets and their competitiveness. 

Taking a variety of metrics into consideration, analysts came up with their Hottest Rental Markets of Early 2024. The list takes into account the average number of renters competing for empty units, the average number of days that apartments stood vacant, share of renters who renewed, overall occupancy, and more. 

We were curious to see how the numbers compare now that many multifamily markets are catching up with today’s various economic challenges. 

Data shows that competition has definitely slowed since 2023, but in the grand scheme of things, the stats are still healthy. And when you look at specific markets in New York and New Jersey (where many of our Everest investors operate), prospects are looking even stronger! 

More on that in a moment. First, check out the nationwide year-over-year stats: 

U.S. Rental Market Competition

2023 vs. Early 2024

Stats provided by RentCafe

Despite the numbers pointing to less market mobility than last year, changes have been subtle—if not negligible. In fact, depending on their particular location, most investors have yet to feel the difference in market activity as we head into the second half of 2024. 

How did our local multifamily markets fare? 

Good question. Here’s the most exciting part!

Using their unique equation, analysts ranked North Jersey, New Jersey the #3 top-performing rental market with a competitive score of 85.4—only beat out by Miami-Dade, FL (91.9) and Milwaukee, WI (87.0). Comprising Jersey City, Hoboken, and Union City, the region saw one of the highest national occupancy rates at 95.8% and a solid lease renewal rate of 73.1%. 

This past February, North Jersey also experienced above-average rent growth with nearby New York City leading the country with 5.4% year-over-year. 

Further down the list, Brooklyn, New York proudly sits at #12. The borough’s 80.5 score beat out historical rental hotbeds like Tampa, Florida, Suburban Philadelphia, PA, as well as the notoriously competitive Silicon Valley, CA. At the start of 2024, operators enjoyed 96.1% occupancy, an average of 5 prospective renters per vacant unit, and just 39 average vacant days. 

Not too shabby! 

So, what can commercial investors do to take advantage of these sizzling markets conveniently located just a stone’s throw away? This month, we turned to Everest market expert and loan officer Rose Schwartz for some strategic advice. 

Tips for Investing in the NY/NJ Rental Market in 2024

Tip #1: Involve your mortgage broker sooner rather than later.

Even when our local markets are red hot, investors can really benefit from a sit-down discussion with a mortgage broker to understand what’s financially possible. Education is key. 

“What I feel is integral to a smooth and stress-free mortgage process is to involve the broker early in the game,” says Mrs. Schwartz. “Bring the broker in, ask questions, and communicate your needs when you’re still early in the contract negotiation process, but far enough along to know you’re serious about pursuing the deal.” 

An experienced loan officer can not only help you navigate the financial side of the deal, but also understand what is smart and realistic in today’s climate.

Tip #2: Be realistic about your investment timeline. 

Over the past few years, investors have gotten used to investing in deals where they know they will want to refinance the loan within a couple of months to a year. But in the current environment, it’s unlikely they’ll be able to cash out their equity so quickly.  

Mrs. Schwartz explains, “For one, interest rates are where they are and are not expected to change substantially in the immediate future. Secondly, banks are much more stringent nowadays when it comes to giving out cash in hand.”

So, investors need to be comfortable with the initial deal. 

“Unless something dramatic happens to the market and interest rates start falling, you need to be able to live with this deal and sustain the property for at least the next 12 to 24 months. Patience and practicality are the keys to success in today’s environment.” 

Tip #3: Trust Everest for the best local deals and advice. 

If you want to get involved in the chart-topping rental markets mentioned above, Everest’s commercial mortgage division is ready to assist. 

Investors turn to our friendly and knowledgeable loan officers like Rose Schwartz for today’s best mortgage solutions and tailored advice for our local New York and New Jersey multifamily markets. Together, there’s no mountain we can’t climb. 

Everest says: Our team helps you compete in any market

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 New Jersey Since 2004

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