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The question of 'the best neighborhood to buy a property in Paterson, New Jersey' does not have a one-size-fits-all answer.
Some of you are buying to live there, while others want to make the best investment possible. Individual preferences and circumstances matter.
That’s why the article below is covering every intent.
At WhatsmyCashFlow, when we write a blog post or when we update our real estate spreadsheet for Paterson, we want to bring solutions for everyone.
Enjoy the read, and please remember that we are not financial or investment advisors. This article is for informational purposes only.
To improve the readability and user-friendliness of this article, we will categorize neighborhoods into various groups, including budget-friendly options, emerging hotspots, and areas with high rental demand, among others. Consequently, some neighborhoods may appear in multiple categories and be mentioned several times throughout the article.
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How is the real estate market in Paterson, New Jersey?
The housing market in Paterson, New Jersey, is dynamic and continuously evolving, making it an intriguing prospect for buyers and investors.
One of the city’s strengths lies in its unique combination of rich industrial history, diverse cultural scene, and strategic location. The presence of major employers like St. Joseph's University Medical Center and the proximity to New York City create a high demand for housing as professionals seek affordable living options with easy access to urban job opportunities. Why does it matter? Because this influx of workers drives up property values, making it a lucrative market for investors like you.
Let’s be honest - Paterson offers attractions and amenities that are rare elsewhere.
The city's iconic Great Falls, vibrant ethnic neighborhoods like Little Lima and South Paterson, and historic sites such as the Paterson Museum are just a few examples. Its unique geography, with the Passaic River running through it, provides scenic views and a limited amount of space for new development, contributing to the city's exclusivity.
People who are looking to buy in Paterson often include healthcare professionals, educators, and young families seeking affordable housing and a lively urban environment. The diverse cultural landscape, excellent public transportation, and community-oriented values also attract a wide array of buyers.
For those interested in buying and renting out property in Paterson, the high demand for rental units from transient workers and short-term residents ensures a steady stream of potential tenants, making it a sound investment.
The real estate market in Paterson is exceptionally dynamic. For instance, the median home price saw a year-over-year increase of around 8% recently, indicating a robust and competitive market. This constant flux in property values and demand underscores the market's vibrancy and potential for significant returns on investment.
One very specific aspect of Paterson properties is the prevalence of historic mill buildings and brownstones, which add a unique charm and historical value.
These architectural styles, characterized by their sturdy construction and historical significance, are highly sought after and can command premium prices. This architectural uniqueness is a significant draw for buyers who appreciate the city's historical and aesthetic value.
As mentioned before, several factors contribute to the future appreciation of property values in Paterson. The ongoing urban revitalization projects, limited housing supply due to historical preservation efforts, and continuous influx of professionals are key drivers.
Additionally, ongoing infrastructural improvements, such as the expansion of public transit and revitalization of certain neighborhoods, will likely further boost property values up.
Top neighborhoods in Paterson to consider for living
Areas in Paterson that are budget-friendly
| Neighborhood | Average Price per Square Meter ($) | Characteristics | Resident Demographics | Strengths |
|---|---|---|---|---|
| Eastside Park | 2,500 | Diverse community, industrial past, ripe for renovation, increasing connectivity | Working-class families, artists, young professionals | Community spirit, connectivity with city |
| Hillcrest | 3,000 | Suburban feel, proximity to Garret Mountain Reservation, tranquil, frequent fog | Long-time locals, nature enthusiasts, young families | Strong community, good schools, recreational opportunities |
| South Paterson | 2,800 | Diverse population, on the cusp of change, vibrant cultural scene, family-friendly | Middle Eastern, Latino, working-class families | Cultural scene, family-friendly, affordability |
We’ll be transparent - when you’re looking to buy a property in Paterson, finding an affordable and budget-friendly area can be quite the challenge.
However, there are still a few neighborhoods that stand out for their relative affordability and potential for future growth.
Let’s dive into three of these areas: Eastside Park, Hillcrest, and South Paterson.
Eastside Park
Eastside Park is one of the last frontiers for budget-friendly properties in Paterson.
Historically, it has been one of the city's less expensive areas due to its industrial past and higher crime rates. However, recent years have seen significant investment in infrastructure and housing, leading to a gradual transformation.
The area is dotted with single-family homes, many of which are ripe for renovation. The average price per square meter hovers around $2,500, making it one of the more accessible areas in the city.
The community here is diverse, with a mix of working-class families, artists, and young professionals starting to move in.
Eastside Park’s strengths lie in its community spirit and increasing connectivity with the rest of the city, especially with the ongoing improvements in public transportation.
However, it still struggles with perceptions of safety and lacks some of the amenities found in more affluent neighborhoods.
Hillcrest
Hillcrest offers a more laid-back, suburban feel while still being within the city limits.
It’s cheaper primarily because of its distance from the downtown core and the frequent fog that blankets the area, which some people find less appealing.
That said, the neighborhood has a unique charm with its proximity to the Garret Mountain Reservation and the tranquility it offers.
You can find a mix of single-family homes and a few apartment complexes here, with an average price per square meter around $3,000.
The residents are a blend of long-time locals, nature enthusiasts, and young families who appreciate the slower pace.
The strengths of Hillcrest include its strong sense of community, good schools, and recreational opportunities at Garret Mountain Reservation. On the downside, it can feel isolated, and the foggy weather isn’t for everyone.
South Paterson
South Paterson is another neighborhood worth considering.
It’s cheaper because it hasn’t yet seen the gentrification that other parts of the city have, but it’s on the cusp of change. The area features a variety of property types, including single-family homes and multi-unit buildings.
The average price per square meter here is about $2,800. South Paterson is home to a diverse population, with a strong representation of Middle Eastern, Latino, and working-class families. The neighborhood’s strengths include its vibrant cultural scene, family-friendly environment, and relative affordability.
However, it lacks some of the polish and high-end amenities of more developed areas and has pockets that can feel a bit rundown.
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Areas in Paterson that are popular and upscale
| Neighborhood | Average Price per sqm | Type of Properties | Demographics | Strengths | Weaknesses |
|---|---|---|---|---|---|
| Eastside Park Historic District | $3,000+ | Grand historic homes, stately mansions, Victorian houses | Affluent residents, professionals, business owners, long-established families | Architectural beauty, safety, proximity to top-rated schools, scenic beauty | High cost of living, maintenance required for historic properties |
| Great Falls Historic District | $2,500 | Converted lofts, modern apartments, historic row houses | Young professionals, artists, history enthusiasts | Rich history, stunning views of the Great Falls, vibrant cultural scene | Noisy streets, challenging parking |
| Hillcrest | $2,000 | Single-family homes, modern townhouses, smaller apartment buildings | Families, young professionals | Peaceful environment, safe streets, strong community feel | High cost of living, limited nightlife options |
Eastside Park Historic District
If you're looking to invest in Paterson, the Eastside Park Historic District should be on your radar. This area is one of the most prestigious and desirable neighborhoods in the city.
It's relatively expensive for Paterson, with average prices per square meter often exceeding $3,000. This district is home to some of the city's most affluent residents, including professionals, business owners, and long-established families.
Properties here include grand historic homes, stately mansions, and well-preserved Victorian houses, many of which offer beautiful views of the park and the Passaic River. The Eastside Park Historic District will likely remain sought-after due to its historic charm, prime location, and scenic beauty.
The strengths of this neighborhood include its architectural beauty, safety, and proximity to top-rated schools and the serene Eastside Park.
However, the downside is, unsurprisingly, the high cost of living and the maintenance required for historic properties.
Great Falls Historic District
The Great Falls Historic District is another area gaining attention for its unique blend of history and revitalization. It's moderately expensive, with average prices around $2,500 per square meter.
This area attracts a mix of young professionals, artists, and history enthusiasts who appreciate its industrial heritage and convenient location. Properties here range from converted lofts and modern apartments to historic row houses, many featuring exposed brick and contemporary amenities.
The Great Falls Historic District is likely to stay popular because of its central location, excellent public transportation, and proximity to downtown Paterson.
The neighborhood's strengths include its rich history, stunning views of the Great Falls, and vibrant cultural scene.
On the flip side, the area can be noisy due to its bustling streets, and parking can be a challenge.
Hillcrest
Hillcrest is a favorite among families and young professionals looking for a more relaxed and community-oriented vibe. It is also moderately expensive, but slightly less so than the Eastside Park and Great Falls Historic Districts, with average prices per square meter around $2,000.
This neighborhood is known for its quiet streets, local parks, and family-friendly atmosphere.
Properties here include charming single-family homes, modern townhouses, and smaller apartment buildings.
Hillcrest's popularity is likely to continue due to its welcoming community, excellent schools, and easy access to major highways and public transportation.
The neighborhood's strengths are its peaceful environment, safe streets, and strong community feel.
However, the high cost of living and limited nightlife options can be drawbacks for some residents.
Areas in Paterson that emerge as new hotspots
| Neighborhood | Description | Key Attractions | Current Property Prices | Future Outlook |
|---|---|---|---|---|
| Downtown Paterson | Historically the heart of the city's industrial boom, now a vibrant area with a mix of historic charm and modern amenities. | New cafes, restaurants, cultural spaces, scenic views of the Great Falls, access to Paterson Great Falls National Historical Park. | More affordable compared to nearby cities like Hoboken or Jersey City. | Prices are likely to rise as more people discover its potential. |
| South Paterson | Once a predominantly industrial zone, now one of the trendiest neighborhoods in the city. | Stylish lofts, artist studios, chic restaurants, boutique shops, diverse community, easy access to public transportation. | Climbing, but still lower than in areas like Montclair or Ridgewood. | Property values expected to continue climbing as more people flock to this dynamic area. |
| Eastside Park Historic District | Known for its historic homes and quiet streets, now becoming a sought-after neighborhood. | New cafes, specialty shops, community events, proximity to Eastside Park and the Passaic River. | More affordable than in the central parts of the city. | Property values expected to rise as more people seek out its unique historic charm. |
If you're looking to invest in a neighborhood with strong long-term rental demand and the potential for significant returns, these emerging hotspots in Paterson, New Jersey, are worth considering.
Downtown Paterson
Downtown Paterson, historically the heart of the city's industrial boom, has been undergoing a significant transformation.
Once known for its textile mills and factories, Downtown Paterson is now a vibrant area with a mix of historic charm and modern amenities. The influx of young professionals and families attracted by affordable housing and new developments has revitalized the area.
The introduction of new cafes, restaurants, and cultural spaces has made Downtown Paterson a hotspot for creatives and entrepreneurs.
Despite its industrial roots, the neighborhood offers scenic views of the Great Falls and access to green spaces like the Paterson Great Falls National Historical Park.
Property prices in Downtown Paterson are still more affordable compared to nearby cities like Hoboken or Jersey City, mainly because it's only recently started gaining attention.
As more people discover its potential, prices are likely to rise, but for now, it remains a relatively budget-friendly option.
South Paterson
South Paterson, once a predominantly industrial zone, has seen a remarkable turnaround and is now one of the trendiest neighborhoods in the city.
Its transformation began with the conversion of old factories into stylish lofts and artist studios. The opening of chic restaurants, boutique shops, and small businesses has further cemented South Paterson's status as an up-and-coming area.
The neighborhood's diverse community and easy access to public transportation make it highly attractive.
While prices here are climbing, they are still lower than in areas like Montclair or Ridgewood. The community vibe and the blend of historic charm with modern amenities make South Paterson particularly appealing to young professionals and families. Expect property values to continue to climb as more people flock to this dynamic area.
Eastside Park Historic District
Eastside Park Historic District, once considered too far removed from the city's hustle and bustle, is now becoming a sought-after neighborhood.
Known for its historic homes and quiet streets, Eastside Park has long been a hidden gem for those seeking a more laid-back lifestyle. Recent years have seen an influx of new cafes, specialty shops, and community events, reflecting the area's growing appeal to a younger, more diverse demographic.
The proximity to Eastside Park and the Passaic River provides ample outdoor activities, making it ideal for nature lovers and families.
The real estate prices in Eastside Park Historic District are still more affordable than in the central parts of the city, partly because it's perceived as being on the periphery.
However, as more people seek out its unique historic charm, you can expect property values to rise.
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Top neighborhoods in Paterson to invest in propertyAreas in Paterson with a strong long-term rental demand
| Neighborhood | Types of Tenants | Types of Properties | Rental Income | Rental Yield | Tips for Increasing Income |
|---|---|---|---|---|---|
| Downtown Paterson | Young professionals, students, commuters | Modern apartments, condos | $1,500 - $2,000/month (1-bedroom) | 5-6% | Opt for properties close to the Paterson Train Station |
| Eastside Park Historic District | Families, professionals | Victorian, Colonial-style houses | $2,200 - $2,800/month (2-bedroom) | 4-5% | Consider properties near Eastside Park |
| Hillcrest | Families, professionals, retirees | Single-family homes, townhouses, apartments | $2,500 - $3,200/month (2-bedroom) | 3-4% | Focus on properties with proximity to schools and parks |
If you're considering investing in rental properties in Paterson, New Jersey, targeting areas with strong short-term rental demand can significantly boost your returns. Three key neighborhoods to focus on are Downtown Paterson, Eastside Park Historic District, and Hillcrest.
Downtown Paterson
Downtown Paterson is the city's bustling core, attracting a diverse mix of young professionals, students, and commuters due to its proximity to major transit hubs and local businesses.
Tenants here typically seek modern apartments and condos with amenities such as fitness centers, rooftop terraces, and secure parking.
One-bedroom apartments in Downtown Paterson can fetch around $1,500 to $2,000 per month. The rental yield here can be appealing, ranging between 5-6%, thanks to the high demand and competitive rental rates.
Opt for properties close to the Paterson Train Station to ensure lower vacancy rates and higher rent. The station offers convenient access to New York City, making it a prime location for commuters.
The main drawback is the area's ongoing development, which could lead to construction noise and temporary disruptions.
Eastside Park Historic District
The Eastside Park Historic District is another hotspot, known for its historic charm and picturesque streets.
This area appeals mainly to families and professionals who appreciate the character of older homes, such as Victorian and Colonial-style houses, often updated with modern amenities.
Here, two-bedroom apartments or homes can rent for about $2,200 to $2,800 per month. Rental yields can be solid, around 4-5%, given the consistent demand for the area's unique ambiance.
To maximize rental income, consider properties near Eastside Park, which offers recreational activities and green space. However, be mindful of the maintenance costs associated with older properties, which might impact your overall returns.
Hillcrest
Hillcrest is a prime neighborhood with a reputation for suburban tranquility. It draws families, professionals, and retirees who prefer larger homes and a quieter environment.
Properties in Hillcrest often include single-family homes, spacious townhouses, and well-maintained apartments. Rental rates for a two-bedroom home here can reach $2,500 to $3,200 per month. Due to the high property values, the rental yield might be lower, around 3-4%, but the area offers stability and lower vacancy rates.
Focus on properties with proximity to schools and parks to attract long-term tenants and command higher rents. The primary downside is the higher initial investment and the competitive market for quality properties.
By focusing on these neighborhoods, you can tap into Paterson's diverse rental market and maximize your investment returns. Each area offers unique advantages and potential challenges, so choose the one that aligns best with your investment strategy and goals.
Areas in Paterson with a strong short-term rental demand
| Neighborhood | Demand Reasons & Tenant Profile | Preferred Properties & Amenities | Average Nightly Rate & Tips |
|---|---|---|---|
| Downtown Paterson | Revitalization efforts, proximity to attractions like Paterson Great Falls National Historical Park and Paterson Museum. Young professionals, students, and tourists. | Modern, well-equipped apartments with high-speed internet, gym, and easy access to public transportation. | $150-$200/night. Invest in sleek, modern condos near business hubs and cultural sites; prioritize workspace and views. |
| Eastside Park Historic District | Historic homes, tree-lined streets, proximity to Eastside Park. Tourists and history enthusiasts. | Unique, stylish properties with well-stocked kitchens, outdoor space, and proximity to public transportation and local attractions. | $175-$250/night. Invest in charming Victorian homes or well-preserved historic properties near the park and local eateries. |
| South Paterson | Diverse cultural experience, proximity to landmarks like Paterson Public Library and Main Street. Tourists and business travelers. | Well-furnished apartments or homes with modern amenities such as concierge services, fitness center, and easy access to local markets and restaurants. | $180-$250/night. Invest in properties near cultural hotspots and dining options; restore historic features while adding modern luxuries. |
If you want to reduce the risk of your property investment in Paterson, New Jersey, and especially the vacancy rate, aim for these 3 neighborhoods.
Downtown Paterson
Downtown Paterson is a burgeoning area for short-term rentals due to its revitalization efforts and proximity to key attractions like the Paterson Great Falls National Historical Park and the Paterson Museum.
The typical tenants in Downtown Paterson are young professionals, students, and tourists who appreciate modern, well-equipped apartments.
They look for properties with high-speed internet, a gym, and easy access to public transportation. For a one-night stay in Downtown Paterson, you can expect to charge around $150-$200.
To maximize rental income in Downtown Paterson, invest in sleek, modern condos near major business hubs and cultural sites. Properties with a dedicated workspace and excellent views will attract higher-end tenants and reduce vacancy rates.
Eastside Park Historic District
The Eastside Park Historic District is another neighborhood with strong short-term rental demand, attracting tourists and history enthusiasts.
The area is known for its historic homes, tree-lined streets, and proximity to Eastside Park.
Tenants in the Eastside Park Historic District are often looking for unique, stylish properties that reflect the neighborhood's historic charm. They appreciate amenities like a well-stocked kitchen, outdoor space, and proximity to public transportation and local attractions.
The average nightly rate in the Eastside Park Historic District ranges from $175 to $250. To get better rental income in this area, consider investing in charming Victorian homes or well-preserved historic properties close to the park and local eateries.
South Paterson
South Paterson is a prime location for short-term rentals, attracting tourists and business travelers seeking a more diverse cultural experience.
This neighborhood offers a rich blend of Middle Eastern and Mediterranean cultures and is close to landmarks like the Paterson Public Library and the vibrant Main Street.
Tenants in South Paterson typically prefer well-furnished apartments or homes with modern amenities. They look for properties with amenities such as concierge services, a fitness center, and easy access to local markets and restaurants.
The average price for a one-night stay in South Paterson is between $180 and $250.
To increase rental income, focus on properties near the heart of the neighborhood, offering easy access to cultural hotspots and dining options. Restoring historic features while incorporating modern luxuries can attract a high-end clientele and ensure consistent bookings.
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Areas in Paterson where property prices might increase in the future
| Neighborhood | Why Prices Are Low | Current Developments | Factors for Price Increase |
|---|---|---|---|
| Great Falls Historic District | Underappreciated for years. | Great Falls redevelopment project, National Park Service involvement, new housing, retail spaces, and green areas. | Large-scale redevelopment, increased attractiveness and livability, high demand for single-family homes and townhouses. |
| South Paterson | Not as well-known as other parts of the city. | Main Street Corridor project improving sidewalks, lighting, and bike lanes. | Proximity to public transportation, infrastructure upgrades, hidden-gem status, high demand for multi-family units and condos. |
| Downtown Paterson | Prices higher than Great Falls Historic District or South Paterson but still reasonable. | Center City Mall expansion, restoration of historic buildings into mixed-use spaces. | Proximity to business and cultural scene, new job opportunities, urban development, high demand for modern lofts and apartments. |
As these neighborhoods continue to develop and attract more residents and businesses, you can expect property values to rise, making them smart choices for investment.
Great Falls Historic District
The Great Falls Historic District is a gem in Paterson that’s starting to get the attention it deserves.
Prices here are still relatively affordable because the area has been underappreciated for years.
However, with the ongoing Great Falls redevelopment project and the National Park Service's involvement, there's a lot of investment pouring in. These projects are bringing in new housing, retail spaces, and green areas. As the area revitalizes and becomes more attractive, expect a rise in property prices.
Single-family homes and townhouses will be in high demand as families and young professionals move in looking for more space and a community vibe.
The key factor here is the large-scale redevelopment, which will transform the neighborhood into a more attractive and livable area.
South Paterson
South Paterson is another neighborhood with great potential. It’s one of the last affordable areas in Paterson, partly because it’s not as well-known as other parts of the city.
However, it's gaining attention due to its proximity to public transportation and the ongoing improvements to local infrastructure, like the Main Street Corridor project.
This project aims to revitalize the main thoroughfare with better sidewalks, lighting, and bike lanes.
Properties like multi-family units and condos will see high demand here, especially because they cater to the young professionals and families looking for reasonably priced options with good commute access.
The ongoing infrastructure upgrades and the neighborhood's hidden-gem status make it ripe for appreciation.
Downtown Paterson
Downtown Paterson is already somewhat trendy but still has room to grow.
Prices are higher than Great Falls Historic District or South Paterson, but still relatively reasonable compared to more central neighborhoods.
The big draw here is the proximity to the burgeoning business and cultural scene.
With new developments like the Center City Mall expansion and the restoration of historic buildings into mixed-use spaces, Downtown Paterson is becoming increasingly desirable.
High-demand properties will include modern lofts and apartments that appeal to professionals looking for a short commute and a vibrant local scene.
The combination of new job opportunities and exciting urban development will drive property prices up.
How to get the best ROI out of a property investment in Paterson, New Jersey?
Picking the right neighborhood in Paterson, New Jersey is not everything.
Each neighborhood has potential if the strategy is right, but it cannot be based on gut feeling. You need to analyze the data and make financial projections. This approach will save you from a lot of mistakes and money losses.
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One of the standout features of our spreadsheet is its comprehensive data set. It includes all the average and median values for sale price, price per square foot, cash on cash returns, rental income, and occupancy rates for Paterson. This means you can make accurate, data-driven decisions specific to the city's market conditions.
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