New Jersey Housing Shortage Persists as 18% of Residents Leave Annually

Written by:

Rudi Davis

Date:

19 Apr 2026

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New Jersey loses about 18% of its residents each year, yet the state’s housing market remains defined by tight supply, high prices, and fierce competition. Nicole Romanik, a licensed real estate sales associate at Keller Williams Village Square Realty, says the contradiction highlights a gap between statewide migration trends and local housing realities.

“In the state of New Jersey, we lose — I think it’s like 18% of people a year leave the state, but we still have a supply problem here,” Romanik says. “So I don’t know what’s going on.”

Despite significant outmigration, demand in certain New Jersey communities remains strong enough to absorb available inventory quickly. Statewide population declines are not translating into weaker local housing markets, especially in high-demand towns.

Age and Jobs Drive Migration

Migration patterns shifted during the pandemic, when remote work allowed people of all ages to move south. That trend has reversed as employers require more in-person attendance. Migration now resembles pre-pandemic norms: older residents move south, while younger families stay in or return to New Jersey.

“It used to be older people migrated to the south, and we’re seeing that come back now,” Romanik says. “But there was a pocket during COVID where everyone was migrating to the south, and yet our market was still very strong.”

This return to traditional migration patterns reflects the limits of pandemic-era flexibility. Younger professionals who relocated south are now tied to offices in the New York metro area. Maintaining homes in the South while working for local employers is no longer practical.

This age-driven migration helps explain the ongoing supply shortage. When older residents leave, they often sell larger single-family homes that families with children quickly purchase. Demand for family-sized homes does not decrease. Instead, ownership turns over, keeping prices high.

Supply Lags Household Formation

The continued housing shortage, even as population declines, indicates that housing production lags behind household formation. New households form when young adults move out, families split, or people relocate for work. Even if the total population falls, demand can remain strong.

Romanik’s experience in northern Bergen County supports this. Homes often sell quickly and above asking price, with multiple offers. In Fair Lawn, she recently sold a property for $110,000 over the asking price after receiving 13 offers.

“We had 13 offers on the property, and it ranged from asking price to 115 over asking,” Romanik says. “People are waiving appraisals, not doing inspections, doing all kinds of things.”

Such competition is uncommon in markets with declining populations. The people leaving New Jersey are not competing for the same homes as those staying or arriving. Retirees and downsizers are departing, while families and younger buyers continue to compete for single-family homes.

Demand Concentrated in Bergen County

The housing shortage is most acute in northern Bergen County towns with strong schools and convenient access to New York City. Romanik points to Ridgewood, Fair Lawn, and Westwood as markets where homes routinely sell above asking price.

Ridgewood has little inventory under $1 million, with some homes reaching $6 or $7 million. The town’s appeal comes from its schools and proximity to Manhattan. Fair Lawn offers lower entry prices and strong schools, attracting both first-time buyers and move-up families.

“Ridgewood is a town that is very commutable to New York City, and it’s a high-end town,” Romanik says. “You don’t see much under a million there, and you can see way up to like six, seven million easily.”

Statewide migration figures do not reflect the realities of demand in these specific markets. While New Jersey as a whole loses residents, towns with desirable amenities continue to attract buyers, fueling intense competition for limited inventory.

Policy Must Target Local Demand

The disconnect between population loss and housing shortages has direct consequences for policy and development. Decision-makers who focus only on statewide population trends risk underestimating the need for new construction in high-demand areas.

Romanik’s firm works to increase supply by sourcing off-market properties for investors, who often demolish existing homes to build larger, high-end houses. This adds inventory at the top end but does little to help entry-level buyers or address affordability.

As New Jersey’s population dynamics evolve, the shortage of homes in sought-after towns is likely to keep prices high and worsen affordability. Addressing the state’s housing needs requires looking beyond aggregate migration data to understand where demand is concentrated and what housing types are most needed.

For policymakers and builders, the lesson is clear: local market realities can diverge sharply from statewide trends. Without targeted efforts to match supply to the needs of families and first-time buyers in high-demand areas, New Jersey’s housing shortage and high prices are likely to persist.