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You don’t need to be a psychic to know that real estate values at the Jersey Shore have risen steadily these last few years. But an analysis by the Asbury Park Press shows just how significant the rise has been.
Largely fueled by pandemic buying, real estate values in Monmouth and Ocean counties have skyrocketed as residents in New York and North Jersey were no longer tethered to their desks in office buildings during the COVID-19 shut down.
Since 2018, the average residential property value in New Jersey grew by $48,952, according to data from the New Jersey Department of Community Affairs.
Of the 564 municipalities in New Jersey, 514 towns have seen an increase in average property values. In that five-year period, only 47 municipalities saw a decrease and three municipalities saw no change in average property values.
While property values and market price are interlinked, the two numbers have separate uses. The property value of a home is the figure determined by inspections from appraisers. It is the number used to calculate property taxes. Monmouth County reevaluates property values every year, while Ocean County requires municipal-wide reassessments every few years.
Appraisers often attempt to value homes as close to market price as possible. But in the last few years, homes have often sold well above its official property value. Bidding wars have driven the final price of homes above the initial asking price.
Both property values and the market price of homes have risen since the beginning of the pandemic.
Michael Smith with Weichert, Realtors said when the pandemic halted life in March 2020, a lot of real estate agents thought of joining other professions.
But by May 2020, “the real estate market just blew up because everybody was moving down from New York, North Jersey. They all wanted to be down in the suburbs because the reality of it is that they didn’t have to work at a brick-and-mortar shop anymore.”
If houses are selling above asking price and it is up for reassessment, the property value of the homes may increase. Those increases in property value has often resulted in increases in property taxes.
“People ask that question, you know. You buy the house for $7 million, does your assessment change overnight? It does not. It changes over time,” said Mantoloking Mayor E. Laurence White, who works as a Realtor with Sotheby’s International Realty. But the experience of 2021 into 2022 “was unbelievable. Every house was going above ask. That’s quieted down a little bit. The market is still good, but the inventory is very low, as you may know.”
Mantoloking’s average property value increased by $255,818 from $2.57 million in 2018 to $2.82 million in 2023.
All municipalities in Monmouth and Ocean counties saw an increase in average property values from 2018 to 2023.
The top 10 municipalities with the highest increases in average property value from 2018 to 2023 include:
- Deal in Monmouth County increased by $2.35 million, from $2.38 million in 2018 to $4.73 million in 2023.
- Loch Arbour in Monmouth County increased by $1.67 million, from $1.21 million in 2018 to $2.88 million in 2023.
- Allenhurst in Monmouth County increased by $1.14 million, from $1.82 million in 2018 to $2.95 million in 2023.
- Sea Girt in Monmouth County increased by $930,295, from $1.91 million in 2018 to $2.84 million in 2023.
- Tavistock in Camden County increased by $920,533, from $1.72 million in 2018 to $2.64 million in 2023. The municipality is home to just three houses and a golf course.
- Spring Lake in Monmouth County increased by $895,218, from $2.01 million in 2018 to $2.9 million in 2023.
- Westfield in Union County increased by $630,897, from $181,931 in 2018 to $812,827 in 2023.
- Rumson in Monmouth County increased by $539,003, from $1.39 million in 2018 to $1.93 million in 2023.
- Interlaken in Monmouth County increased by $498,651, from $657,809 in 2018 to $1.16 million in 2023.
- Mountainside in Union County increased by $461,884, from $163,735 in 2018 to $625,620 in 2023.
Chris Berzinski has lived in Upper Freehold for 28 years. The bucolic township dotted with farms, does not provide certain services, such as a public sewer system or a local police department.
With higher property values, property taxes have increased.
Property taxes are calculated based off tax rates, which vary from year to year and from municipality to municipality.
From 2018 to 2023, Berzinski saw a $3,000 increase in his property taxes. His home, which was assessed a $480,000, is now assessed at $646,600.
Berzinski’s tax bill is broken up into municipal, county, school and open space taxes. Not all municipalities have an open space tax. Other municipalities might have library or fire district taxes. When inflation drives up the cost of operating schools and new construction, property taxes increase as a result.
While many people have benefited from wage increases since the start of the pandemic, those who have not seen an increase in pay or live on fixed incomes are paying more taxes in proportion to their take-home pay.
“You don’t want to pay over $3,000 more over a five-year period, it doesn’t make you happy,” he said. “But on balance, I understand. … Seventy-five percent of it is well spent on the schools and the rest, for the most part, is well spent.”
Olivia Liu is a reporter covering transportation, Red Bank and western Monmouth County. She can be reached at oliu@gannett.com.