CNBNews

William E. Cleary Sr. | CNBNews

GLOUCESTER CITY, NJ (June 22, 2025(CNBNews)--Residents and officials in 19 cities throughout New Jersey are being cautioned about an impending real estate crash that may impact their communities soon. Included in the list of 19 is the City of Gloucester City in the 5th spot. 

A recent article from Newsweek highlights that although New Jersey’s housing market seems to be thriving on the surface, a deeper analysis reveals troubling trends. Over the past 15 years, the Zillow Home Value Index has indicated that these 19 towns are showing critical warning signs reminiscent of previous market declines: significant overvaluation, noticeable volatility, and a concerning loss of upward momentum. Specific communities, such as Woodlynne and Gloucester City, have experienced such extreme price inflation that a market correction appears not just possible, but almost inevitable. This situation may be driven by exaggerated media coverage, speculative investment behaviors, or an unchecked momentum that no longer reflects real economic conditions.

Gloucester City serves as a prime example, having witnessed an astonishing 206.6% increase in home prices. This surge has pushed property values a staggering 89.5% beyond what the market can sustain, particularly when considering the relatively moderate current prices. The city's history of three significant housing crashes, including a harsh 15.7% decline in 2012, further illustrates its vulnerability and the likelihood of another downturn. This combination of excessive growth fueled by speculation and historical trends is raising alarm bells for residents and officials alike, signaling that these markets' stability may soon be tested.

GLOUCESTER CITY

Home Stratosphere | Zillow Home Value Index

• Crash Risk Percentage: 90%
• Historical crashes (8%+ drops): 3
• Worst historical crash: -15.7% (2012)
• Total price increase since 2000: 206.6%
• Overextended above long-term average: 89.5%
• Price volatility (annual swings): 8.8%
• Current 2025 price: $245,454

Gloucester City – Delaware River Location Can’t Justify Overvaluation

Gloucester City is strategically situated along the scenic Delaware River, directly opposite the bustling metropolis of Philadelphia. This prime location offers residents easy access to major employment hubs, making it an attractive option for individuals seeking job opportunities. Despite its appealing proximity to Philadelphia, Gloucester City provides a more affordable housing market compared to other high-risk urban areas. Nonetheless, the current median home price stands at $245,454, an alarming 89.5% higher than its long-term sustainable average.

Since 2000, home values in Gloucester City have surged by an extraordinary 206.6%. The housing market in Gloucester City has faced significant volatility, marked by three major crashes since 2000. The most severe of these downturns occurred in 2012, when home prices plummeted by 15.7%, coinciding with broader economic challenges affecting the entire region. Residents contend with typical urban challenges such as aging infrastructure and a lack of robust local economic development initiatives.

With an annual price volatility rate of 8.8%, the housing market in Gloucester City exhibits signs of ongoing instability. The history of three major market crashes underscores the presence of underlying structural vulnerabilities within the community. While the current home prices may seem relatively reasonable when compared to more luxurious coastal markets, the striking 89.5% overvaluation signals that even this working-class community has elevated property values far beyond what is sustainable. This situation creates a substantial risk of a market correction, putting homeowners and potential buyers in a precarious position.

READ NEWSWEEK ARTICLE

This article, Crash Coming? These 19 New Jersey Towns Are on Thin Ice first appeared on Home Stratosphere.

LIST OF COMMUNITIES                        CRASH RISK PERCENTAGE

19-Paterson                                                                     84%

18-Long Beach                                                                85%

17-Atlantic City                                                               85%

16-Camden City                                                               85%

15-Ocean Gate                                                                 87%

14-Chesilhurst.                                                                87%

13-South Toms River                                                      87%

12-Ventnor City                                                                87%

11-Willingboro                                                                  87%

10-East Orange.                                                                87%

9-Interlaken                                                                      89%

8-Brielle                                                                             89%

7-Keansburg                                                                     89%

6-Ship Bottom                                                                 90%

5-Gloucester City                                                             90%

4-Pleasantville                                                                 90%

3-Deal                                                                                 92%

2-Sea Girt                                                                         92%

1-Woodlynne                                                                   95%