New Jersey was never a desirable destination for free agents because Lou barely attempted to to sign them here. That's not a knock on him, the way he did things worked for quite a while and let's also not forget that up until 2005, UFA age was 31. Lou would often times let his own big name UFA's walk, when they were going to cost too much and weren't worth it anymore. I'm talking even before the lockout. Holik, Gilmour, Mogilny 1.0, Lemieux 2.0, Andreychuk, etc.
Lou didn't start signing free agents until 2013 or so, when he really had to because he insisted on trying to have the team compete. He signed a few second tier UFA guys or supplemental guys like Zubrus (to kind of replace Gomez), Matvichuk back in 2004. I guess if you count Kovalchuk (who was already with us), Tallinder and Volchenkov, maybe 2010 was when he first really went on a UFA spending spree, but even that was after Paul Martin had left and we lost Oduya in the Kovalchuk trade, so those two were helping replace them.
And I really doubt any players live in Newark, even the nice parts of the city. Most visiting teams don't even stay in Newark. They usually stay in Jersey City or the Short Hills Hilton. Probably because there's more to do in Jersey City and the Short Hills Hilton is much nicer than the one in Newark next to Penn Station. A lot of teams used to stay in the Hilton Hasbrouck Heights, back when we played in The Meadowlands. There's plenty of other NHL cities/buildings that are close to pretty bad neighborhoods too. I've heard the Joe and even the new building are close to some unsavory neighborhoods that you wouldn't wanna walk through at night after games.