Trenton Multifamily Real Estate

Trenton's multifamily real estate sector often remains in the shadows of larger neighboring areas like Philadelphia or other parts of New Jersey. However, this year, the region has taken the spotlight by defying the prevalent trend of rising vacancies and substantial new property additions seen in nearby locations.

The occupancy rates for apartments in Trenton have reached an unprecedented peak. The scarcity of new property developments, along with robust growth in population and income, have turned the capital of the Garden State into an increasingly appealing choice for both renters and operators in the multifamily housing market.

Remarkably, the unemployment rate in the Trenton vicinity is less than 3%, which is not only below the pre-pandemic levels in the area but also under the national average of 3.6%. In the past year, Trenton managed to recover all the jobs it had lost during the pandemic and has even added 31,000 new positions. As of the third quarter, the year-over-year population growth in Trenton has risen by 0.6%, surpassing the U.S. benchmark for the first time since the latter part of 2013.

These trends have substantially enlarged the pool of potential renters in Mercer County following the pandemic recovery. Besides its central location nestled between New York City and Philadelphia, Trenton's appeal is magnified by its abundance of government job opportunities, proximity to universities, and a well-established railway network that facilitates convenient travel throughout the Northeast Corridor.

In the meantime, the median household incomes in the region are steadily approaching the $100,000 mark, which bodes positively for the market's allure and its future prospects in terms of apartment demand. As of mid-August, Trenton's average apartment vacancy rate stood at a mere 1.8%, significantly lower than the averages for both Northern New Jersey (4.6%) and Philadelphia (6.2%). CoStar's Base Case forecast predicts that this low vacancy rate will persist until the second quarter of 2024, remaining below the 10-year average for the foreseeable future.

With the multifamily housing market currently tighter than ever, landlords have consistently been increasing rents since the beginning of 2021. The latest data indicates an annual rental growth rate of 5.4%, surpassing the 10-year average of 3.7%. Due to the continuous climb in apartment rental prices over the past two-plus years, the average asking rent in Trenton now surpasses $2,000 per month, crossing this symbolic threshold during the second quarter of this year.

Oxford Economics presents a favorable outlook on the demographic front, projecting an additional quarterly population growth of at least 3,000 individuals until early 2025. Fueled by rising incomes and an expanding population, property owners in Trenton's apartm