They are literally all over New Jersey and I've seen a good amount in PA as you head north. They can't possibly be that uncommon.
I am from New Jersey. They are not "literally all over New Jersey." I can't say I've ever seen more than one or two here in my entire lifetime.
Fine, all over South Jersey. Obviously the flag isn't flown publicly but tons of rebel flag pins on bags in my high school and others nearby, and I know several people south of me post pictures of their in-state (/Penn/DE) dorm rooms with the Confederate flag on the wall. Confederate gear is publicly displayed, and the flag is often in houses. In more rural areas you do see it on cars too. There's probably some bias due to people who share my interests, but it's pretty prevalent. My family members (mostly NYers) are horrified when they see them so they get pointed out quite a bit. In fact, I think at some point, I was given stickers or tattoos of the flag.
EDIT: And I just realized, high school/organizations are not even the primary source. I frequently go to country concerts, even at the Meadowlands, and the parking lot is packed with them. Few in Philadelphia though. Never in NYC. It's pretty weird.