Cash Buyers Redefine JC & Hoboken

Pavel Saikin
Oct 19, 2023
1 min read

Updated: May 8, 2024

Demand for a mortgage has fallen due to rising interest rates, yet home prices in Jersey City and Hoboken remain unaffected. Cash buyers have stepped into the market in a large way over the past few months. Although the supply for most home criteria has been low, the 15-year-high interest rates have pushed many mortgage buyers out of the market. This would normally lead to a drop in home prices, but a unique culmination of local market factors have created an unprecedented trend. A large increase of all-cash home buyers typically occurs when mortgage buyers are forced out of the market, allowing the cash position to take advantage of a market edge. This typically occurs after a decline in home prices, which is often spurred on by a recession that causes difficult lending conditions. Now, cash buyers are entering the market while mortgage buyers are forced out due to difficult lending conditions, but this time the home prices never fell.

This unique trend is occurring because high rent prices and abundant cash reserves, specifically in the major NJ and NY markets, have pushed many buyers to escape the rental market and bypass the interest rates. Unlike previous occasions of increased cash buying, these buyers are not taking advantage of market conditions, but rather escaping them. The primary effect will be an increased market resilience to large price declines.