More Banks, Corporations Are Buying Homes In Edison, Metuchen: Study

EDISON, NJ – Banks, corporations and other institutions are rapidly buying property in Edison and Metuchen, according to a new study.

Last week, the New Jersey Department of Community Affairs (DCA) released a report titled “Buying New Jersey: The Rise in Institutional Ownership of Residential Properties.”

According to the report, corporations and institutions have been snapping up an increasing number of houses and apartment buildings across the state, including in Edison and Metuchen.

Over the past decade, almost every town and city in New Jersey – about 96.4 percent – has seen an increase in the share of residential properties owned by real estate firms, business entities, trusts and banks.

Around 6 percent or 1 in 17 residential properties were institutionally owned in 2020, which is a 2.5 percent increase since 2012, the report said.

About 71 percent of institutionally owned residential properties are owned by corporate or business entities, followed by trusts at 22 percent and banks at 4 percent.

Edison has 1,037 institutionally owned residential properties in the Township, which is 1.5 percent increase since 2012. It ranks 356th in the state for the highest rate of institutionally owned residential properties as of 2020.

Comparatively, Metuchen fared better, with 173 properties owned institutionally, which is a 1 percent increase since 2012.

Here are the statistics for Edison:

• 2020 Institutionally Owned Residential Properties: 1,037
• 2020 Institutionally Owned Percentage of Residential Properties: 4.1 percent
• 2020 Institutionally Owned Percentage of Residential Properties Rank: 314
• 2012-20 Change in Institutionally Owned Percentage of Residential Properties: 1.5 percent
• 2012-20 Change in Institutionally Owned Percentage of Residential Properties Rank: 356

Here are Metuchen's statistics:

• 2020 Institutionally Owned Residential Properties: 173
• 2020 Institutionally Owned Percentage of Residential Properties: 3.8 percent
• 2020 Institutionally Owned Percentage of Residential Properties Rank: 349
• 2012-20 Change in Institutionally Owned Percentage of Residential Properties: 1.1 percent
• 2012-20 Change in Institutionally Owned Percentage of Residential Properties Rank: 426

Growth in institutional homeownership has been strongest in counties like Hudson, Camden, Ocean, and Mercer, according to the report.

The average shares of these properties are relatively small in communities within Burlington, Bergen, and Morris counties.

In Middlesex County, New Brunswick has the highest percentage of institutionally owned properties — 9.5 percent or 1,046 properties.

While the overwhelming majority of municipalities are experiencing a rise in institutional homeownership, the report finds the areas most targeted by institutional buyers tend to be lower-income, more distressed, and have a resident population of mostly renters.

The report states that this “may reflect a propensity to acquire property for speculation, investment purposes, or to rent out.”

The average home buyer is essentially competing against big business when trying to buy their dream home, said Lt. Gov. Sheila Oliver, who also serves as commissioner of the DCA.

“This report shows the challenges that exist for homebuyers, particularly those with lower incomes, to purchase a home in their communities when they’re competing against corporations and business entities for housing,” Oliver said.

“While institutional homeownership is just one of several factors contributing to the very difficult housing market for regular homebuyers, it is an important factor.”

The study didn’t include multi-family properties with five or more units.

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