At the end of January, Cg’s John Blake had the opportunity to attend the Princeton Mercer Regional Chamber’s 2025 Central NJ Real Estate Forecast. Alongside almost 300 professionals, John gained insightful information about the 2025 predictions for the Central New Jersey real estate market from the discussion led by some of the industry’s experts.
Some key takeaways from the event:
Residential Real Estate
The current market in New Jersey has not seen much of a fluctuation in home sales for 2024 compared to 2023. The higher interest rates are potentially a contributing factor to keeping people in their current homes.
Predictions for 2025 indicate that interest rates will come down, potentially lowering mortgage rates, which could then trigger an uptick in residential sales.
Commercial Real Estate
Offices
The 2025 outlook for office spaces seems relatively positive: businesses are beginning to stabilize their in-person staffing requirements, interest rates are lower, and production of new offices has slowed. Lower-class office spaces, however, will likely continue to trend toward additional vacancies as companies move to higher-class spaces.
Multi-Family Properties
Multi-family properties could be a strong investment for commercial investors. Rent demand is strong; with high interest rates, many renters are likely to pay the increased rent rates rather than getting a mortgage with high rates.
Data Centers
Data centers are becoming more prevalent. So much so that supply is struggling to keep up with demand. The presenters suggested that there will be an uptick in data centers outside of the main IT hubs, provided those locations have adequate power and fuel available.
Industrial
Occupants in industrial spaces will be looking for more long-term solutions. Newly built spaces will be in high demand, which will increase the vacancies of older buildings. Third-party logistics carriers will likely be the largest consumers of these spaces.
Overall, interest rates and the job market are the driving forces that will impact the market in 2025. People anticipate that rates will drop which may spur more movement in other sectors. This forecast was based on more traditional factors like interest rates and job growth, but may be the first to address post-pandemic stabilization. The pandemic has had a lasting impact on some sectors, however, it has also opened the door for expansion in others. As the year progresses, it will be interesting to see how these predictions unfold.
Questions about how this forecast may affect you and your business? Contact John Blake, Director in our Tax Services Group.