New Jersey is the most densely populated state in the US. In fact, NJ construction companies are struggling to keep up with all the buyers looking to purchase new construction homes. But what’s behind all the demand?
This article will help answer that question by explaining the demand for new construction homes in the US in general, why so many new homes are being built in New Jersey specifically, some of the state’s notable new housing developments, and what the future looks like for New Jersey’s residential construction market.
Let’s get started!
Table of Contents
Drone photo of new single-family homes under construction in Barnegat, NJ
America’s Demand for New Construction Homes
US demand for new construction homes is booming. In February 2022, new home building in the US was up 22% from last year. That’s the fastest growth rate for residential construction since 2006!
New houses also make up a giant portion of US single-family home sales overall. In December, they made up more than one third.
So what’s driving the surge in new home building across the nation?
Well, the short answer is the housing shortage. As of September last year, the US was short 5.24 million homes. This record low housing inventory has been a major cause of the sudden rise in demand for new homes. And construction companies are having a hard time keeping up with the increased demand for a few reasons:
- A lumber shortage
- A labor shortage
- And other supply chain issues
Drone photo of prefab lumber delivery for a new construction home in Medford, NJ
Many of these factors were triggered by the COVID-19 pandemic. For example, the labor shortage is partly due to a lack of drivers and transportation during the pandemic, which made getting wood from mills to dealers difficult. The labor shortage, however, is also the result of many skilled workers retiring and not enough younger workers entering residential construction to take their place.
All of this has led to a backlog of new construction orders that continues to pump up new home prices. In fact, the average sales price of a new home jumped over $50,000 from 2020 to 2021, leading to bidding wars and new homes selling fast.
HAVE QUESTIONS ABOUT droneS? START HERE.
Why are so Many New Homes Being Built in New Jersey?
As the demand for new homes continues to grow, much of the construction is happening in New Jersey. The Garden State has a giant $2 billion residential construction market with 9,578 home building businesses.
Besides offering beautiful beaches and a central location among big eastern cities, the New Jersey construction market has been booming for a few reasons:
- Mortgage rates are at a record low—At the beginning of 2021, the average fixed-rate mortgage dropped to a 50-year low of 2.65%. This made buying a home more affordable and attractive to many.
- Millennials are settling down—As the millennial generation (those born between 1981 and 1996) gets older, they’ve started buying houses to settle down or start families. Now, millennials make up 43% of home buyers, which is the biggest share of any generation.
Drone photo of Bob Meyer Communities Wyngate at Medford development in South Jersey
- Remote work allows more location flexibility—Since the pandemic forced many to work from home, remote work has given workers more freedom to live wherever they want. As a result, suburban and exurban areas are growing with new move-ins.
- Pandemic dampened the appeal of living in urban cities—When the pandemic lockdowns started, living in a small apartment in a big city suddenly lost its appeal. You couldn’t go out to eat or socialize anymore. So many urban dwellers moved out of the city to buy a house somewhere they could spread out. In total, 15.9 million people have moved during the pandemic.
“If people can stay home or commute to work only one or two times a week, or a month, that will lead to continued growth in suburban areas, small towns and rural areas,”
- Jessica Lautz, VP of demographics and behavioral insights for the National Association of Realtors
Ultimately, low mortgage rates, millennials settling down, remote work flexibility, and the dampened appeal of urban living all combine to create massive new demand for new housing construction in the state of New Jersey.
What's included in YOUR GUIDE...
A Proven Roadmap of Success for Implementing Drones in Construction.
A List of Red Flags to Avoid When Hiring Drone Service Providers.
How to Persuade Your Leadership Team to Leverage Drones on Every Jobsite.
Notable New Housing Developments in New Jersey
Let’s take a look at a few of New Jersey’s standout new housing developments:
Stafford Park - Ocean County, NJ
Drone photo of Stafford Park housing development under construction in Ocean County, NJ
Stafford Park is a new community built by DR Horton, the largest homebuilder by volume in the US with a quickly growing number of developments in the state including:
- Signature Place by D.R. Horton America’s Builder, 1 Naples Ln, Mt Laurel Township, NJ 08054
- Autumn Park by D.R. Horton, 22 Evesboro – Medford Rd, Medford, NJ 08055
- Ocean Acres by D.R. Horton America’s Builder, 54 Nautilus Dr, Barnegat Township, NJ 08005
The community is located on a 345-acre site near a former landfill one mile west of the Garden State Parkway in Manahawkin, Ocean County. In fact, Stafford Park is where the most building permits for single and two-family houses were issued in NJ in 2020. It has 345 single-family houses and 310 apartments.
Since these homes are in a highly competitive area only 15 minutes away from Long Beach Island, people have been buying them up fast, driving up their price to well over $500,000.
Venue at Smithville Greene - Burlington County, NJ
Drone photo of Venue at Smithville Green housing development under construction in Burlington County, NJ
Venue at Smithville Greene is a 55+ active adult community located in Eastampton in Burlington County. The community was built by Lennar, which is the second-largest home building company in the US. It was founded in 1954 and is currently based in Florida, but currently has dozens of communities within New Jersey including:
- Lennar at Venue at Lighthouse Station, 6 Chesterton Ct, Barnegat Township, NJ 08005
- Lennar at Iron Gate, 1600 Williamstown Erial Rd, Sicklerville, NJ 08081
- Lennar at Fox Hollow, 201 Emerald Dr, Branchburg, NJ 08876
The community includes 2-3 bedroom single-family homes and lots of amenities, including a clubhouse, pool, gym, ballroom, bar lounge, theater room, pickleball, tennis, and more. Home prices start at $300,000 and go up from there.
Legacy Acres - Camden County, NJ
Drone photo of Legacy Acres housing development under construction in Camden County, NJ
Lastly, Legacy Acres is a 55+ community in Berlin, NJ built by Ryan Homes. It offers several single-family homes starting in the mid $300,000s. But you’ll have to act fast to get one.
Ryan Homes is a major player in the home building industry as well. Since its inception in 1948, it has constructed over 360,000 homes! And it has over 50 developments in the state of NJ alone. Here are some of them:
- Ryan Homes at Mansfield Meadows, 13 Mountain View Ln, Port Murray, NJ 07865
- Ryan Homes at Lifestyle at Cumberland, 50 Cottage St, Millville, NJ 08332
- Ryan Homes at Woodstown Greens, 70 Kingsberry Ln, Woodstown, NJ 08098
The Future of New Construction Homes in New Jersey
Overall, it’s a busy market for new construction homes in New Jersey. Though the Federal Reserve raising interest rates may dampen the demand for new housing by making mortgages more expensive, last year’s US building permits were up 17.2% from 2020. And in January 2022, they reached a 16-year high of 1.895 million! So for now, the NJ residential construction industry is still pretty hot.
On top of that, many companies have made remote work a permanent policy, which means employees working in big cities like Newark and Atlantic City will continue to look for opportunities to relocate to more inexpensive and desirable areas in the suburbs where they can buy a new house.
Whatever the next few years bring, it’s clear that the residential construction market in New Jersey is not slowing down anytime soon.
What's included in YOUR GUIDE...
A Proven Roadmap of Success for Implementing Drones in Construction.
A List of Red Flags to Avoid When Hiring Drone Service Providers.
How to Persuade Your Leadership Team to Leverage Drones on Every Jobsite.
