New Jersey’s property boom may be running out of road. Based on the Zillow Home Values Index, analysts have flagged 20 towns across the state where housing prices now show clear signs of vulnerability. These communities share a troubling pattern: home values stretched far above long-term trends, rapid price swings, and market behavior that mirrors past downturns. Whether driven by tourism reliance or rapid gentrification, each of these towns faces rising risks that current property prices may be unsustainable.
20. Hillside – Crash Risk Percentage: 81.25%
- Crash Risk Percentage: 81.25%
- Historical crashes (8%+ drops): 2
- Worst historical crash: -14.2% (2012)
- Total price increase since 2010: +103.6%
- Overextended above long-term average: +73.0%
- Price volatility (annual swings): 9.0%
- Current 2025 price: $510,560
Hillside’s housing data reveals a market stretched to concerning levels, with prices more than doubling since 2010 and currently sitting 73% above historical trends. The Union County township has experienced two significant crashes over the past 15 years, including a devastating 14.2% drop in 2012 during the post-recession recovery period. This pattern of boom-and-bust cycles suggests the market lacks fundamental stability.
Hillside – Dangerous Overextension in Union County
Located in Union County just southwest of Newark, Hillside sits at a crossroads of major transportation routes including the Garden State Parkway and Routes 22 and 82. The township’s 2.8 square miles house approximately 21,000 residents in a predominantly working-class community. Hillside’s economy relies heavily on its proximity to Newark’s job market and its role as a transportation hub, making it vulnerable to broader economic shifts in the region.
The current median price of $510,560 represents mathematical unsustainability when compared to local income levels and historical norms. Hillside’s 9% annual price volatility indicates an unstable market prone to sharp corrections. The township’s dependence on commuter traffic to New York City and its aging housing stock from the 1940s-1960s era create additional risk factors that could trigger rapid price declines if economic conditions deteriorate.
19. Hopatcong – Crash Risk Percentage: 81.35%
- Crash Risk Percentage: 81.35%
- Historical crashes (8%+ drops): 2
- Worst historical crash: -10.7% (2011)
- Total price increase since 2010: +81.7%
- Overextended above long-term average: +65.8%
- Price volatility (annual swings): 8.0%
- Current 2025 price: $442,416
Hopatcong’s lakefront location has driven dramatic price appreciation, but the borough now shows clear signs of overheating. With home values 65.8% above long-term averages and an 81.7% increase since 2010, the market has reached levels that may be unsustainable for a community of 15,000 residents. The borough’s history includes two previous crashes, demonstrating vulnerability to economic downturns.
Hopatcong – Lake Community Under Pressure
Hopatcong, situated around New Jersey’s largest freshwater lake in Morris and Sussex counties, has evolved from a summer vacation destination into a year-round residential community. The borough’s appeal stems from its recreational opportunities, including boating, fishing, and waterfront living, which has attracted both retirees and families seeking alternatives to more expensive lakefront properties elsewhere in the region. However, this demand has pushed prices beyond what many local incomes can support.
The current median price of $442,416 reflects the premium commanded by lakefront and lake-view properties, but may not be sustainable given the community’s seasonal economic fluctuations and limited employment opportunities. Hopatcong’s 8% price volatility and history of market corrections, including a 10.7% crash in 2011, suggest that current valuations could face significant pressure if demand from outside buyers diminishes or if broader economic conditions force residents to sell.
18. Egg Harbor City – Crash Risk Percentage: 82.15%
- Crash Risk Percentage: 82.15%
- Historical crashes (8%+ drops): 2
- Worst historical crash: -17.0% (2017)
- Total price increase since 2010: +54.8%
- Overextended above long-term average: +58.6%
- Price volatility (annual swings): 10.4%
- Current 2025 price: $340,810
Egg Harbor City stands out with the most recent severe crash in our dataset, experiencing a devastating 17% price drop in 2017. Despite this recent correction, the Atlantic County city has already rebounded to concerning levels, sitting 58.6% above long-term trends. The 10.4% annual volatility signals an inherently unstable market prone to dramatic swings.
Egg Harbor City – Recent Crash Survivor at Risk Again
Located in Atlantic County’s Pine Barrens region, Egg Harbor City serves as a small urban center of approximately 4,200 residents surrounded by rural and conservation lands. The city’s economy has historically depended on agriculture, small manufacturing, and its role as a service center for the surrounding area. Its proximity to Atlantic City, about 20 miles southeast, has provided some economic benefits but also exposed the community to the volatility of the tourism and casino industries…