According to a recently released market study, housing demand in Trenton is on the upswing, creating a need for nearly 1,300 new residential units downtown over the next five years.
The study released by Greater Trenton, a 501(c)3 dedicated to promoting economic revitalization in the city, reveals a potential market in the downtown that is a third higher than in 2018. This means a demand of up to 1,270 new units, including 995 rental apartments, 200 for-sale rowhouses and townhomes, and 75 for-sale condominiums over five years in downtown Trenton.
The study by Zimmerman/Volk Associates Inc. analyzed 39 competitive rental apartment properties in the region with a combined supply of more than 8,250 units and a reported stabilized weighted occupancy of 98.3 percent. It projects that some 43 percent of the demand for new units in downtown Trenton would come from within the city, while the balance would come from elsewhere in Mercer County, along with Middlesex, Burlington, Somerset, and Monmouth counties, Bucks County in Pennsylvania and outside the region.
Greater Trenton released the downtown Trenton residential market study, an update to a 2018 analysis, in sponsorship with Wells Fargo and New Jersey Realtors Association.
According to the study, an annual average of 5,670 households represents the potential market for new and existing housing units city-wide each year over the next five years. Also, an annual average of 2,760 younger singles and couples, empty nesters and retirees, and traditional and non-traditional families of all incomes represent the potential market for new and existing housing units within the Greater Downtown Trenton Study Area each year over the next five years.
“We’re excited to see continued healthy residential demand within our historic and diverse capital city,” said Trenton Mayor Reed Gusciora. “From its unique cultural assets to its robust arts community, wonderful mix of restaurants, and its tremendous highway and rail access, Trenton stands strong as an attractive destination to live, work, play, and visit.”
“Greater Trenton was created to create opportunities for all current and future residents and businesses in Trenton by advancing economic development” said Kevin Cummings, Chair of Greater Trenton. “We are pleased to commission this study which quantifies the residential demand with Trenton’s downtown core in furtherance of our mission.”
“Trenton continues to benefit from a 7% increase in population to nearly 91,000 residents and becoming one of the top ten largest municipalities in the entire state” said George Sowa, CEO of Greater Trenton. “As we look to maximize Trenton’s residential market, it will be important to focus on developing higher-density housing types while also redeveloping existing buildings in Downtown Trenton.”
The study noted that Trenton’s attraction as a place offering a highly transit-oriented location; a range of affordability; a vibrant arts community; rich history; and a welcoming community combined with the city’s high walk score position it exceptionally well for continued growth.
“There are numerous real estate assets, both historic and modern, that enhance the attractiveness of residential living in Downtown Trenton,” said Jarrod Grasso, Chief Executive Officer at New Jersey Realtors Association. “Prominent attractions in Trenton from the Old Barracks to the Cure insurance Arena to the War Memorial and others are also complimented by Mercer County’s regional attractions including Grounds for Sculpture, Princeton University Art Museum, Washington Crossing Historic Park and more.”
The study also noted that the aftermath of the housing crash continues to reverberate through the housing market nearly 15 years later as evidenced by significant changes in market preferences from single-use subdivisions in exurban locations to mixed-use, walkable developments, particularly in downtown and intown neighborhoods. This transformation has been driven by the convergence of the preferences of the two largest generations in the history of America: the estimated 69.6 million Baby Boomers born between 1946 and 1964, and the estimated 72.1 million Millennials, who were born from 1977 to 1996 and, in 2010, surpassed the Boomers in population.
The convergence of two generations of this size – simultaneously reaching a point when urban housing matches their life stage – is unprecedented. The preference for urban living evidenced by both younger and older one- and two- person households has been a primary force in downtown redevelopment across the country, and continues despite press articles to the contrary, citing anecdotal pandemic-induced moves out of cites. Although this trend was notable at the onset of the pandemic, significant numbers of households who had left their urban neighborhoods have now returned, and as the coronavirus is perceived by many to be less of a threat, urban occupancies are resuming pre-pandemic levels.
The pandemic trend of rising single-family detached home purchases also continues across the country, reducing inventory and increasing pressure on home values, resulting in a significant decline in housing affordability. Although recent interest rate increases have had an impact on purchase volume, house prices are currently holding steady. Another significant shift is the Millennials’ strong propensity for renting rather than owning. This is due in part because of their relative youth – many do not have sufficient funds for a down payment and many others are burdened by student debt – and in part because the prior collapse of the housing market made many of them skeptical about the value of owning versus renting.
Both the 2018 and updated 2023 studies were conducted by Zimmerman/Volk Associates, Inc., which has a national reputation for innovative market analysis based on its proprietary target market methodology.
To access a full copy of this study, please visit: https://www.greatertrenton.org/wp-content/uploads/2023/04/UPDATED-RES-STUDY-413spread.pdf.