ARC Effect on Northern NJ Housing Market

I’m surprised to hear that many of the homeowners I talk to aren’t familiar yet with the ARC Program taking place as we speak, a historic transportation improvement that will benefit tens of thousands of NJ residents.  This could bode very well for NJ suburban markets that are served by rail stations.

“ARC is New Jersey and New York’s biggest investment in transit, ever.  It involves the construction of a second commuter rail tunnel that will connect NJ Transit’s existing rail network and Metro-North Port Jervis and Pascack Valley service with a new terminal station at 34th Street in the city.  ARC will double the number of trains that can travel every morning into the economic engine of the region from west of the Hudson River.  For several train linesthat currently terminate in Hoboken, Newark, and Secaucus, ARC will provide new, direct service to Midtown.  For those lines that already terminate at Penn Station-NY, ARC will significantly increase the frequency and reliability of service.”  (ARC Report)

It is expected that residents with commutes of under 50 minutes into the city with the new tunnel, the number of commuters will DOUBLE after ARC.  This will effectively cut down on pollution as well, a great benefit to the planet and Northern NJ.  For homeowners looking currently to buy, perhaps it would be a good idea to look closer to rail stations if you are looking for added benefits in the near future.  The ARC is expected to take up to 10 years to complete, but many in the industry are expecting closer to 7-8 years.  It is currently underway though and drilling through the Hudson River is taking place as we speak.

Here are some interesting stats to keep in mind regarding real estate:

• Homes near train stations significantly gained in value after Midtown Direct, Montclair Connection and Secaucus Junction.  The average home gained $23,000, with the highest gains coming within walking distance to the stations.
• Houses immediately adjacent to San Francisco’s BART sold for nearly 38% more than identical homes in areas not served by BART (Landis and Cervero, 1995).
• Homes within walking distance of stations on the Morris & Essex line increased in value by $90,000 more than homes farther away after direct service to Midtown was inaugurated in 1996 (Michaelson, 2004).
• In Chicago, the prices of single family homes located within 1,000 feet of stations were worth 6.7% more than similar homes in other communities (Armstrong 1995)

To read the entire ARC Report and to reference the writers of the report, quoted in this post, CLICK HERE.

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