Witnesses reported a man, 25-year-old Jose Feliciano, was acting strangely and that he opened fire.
The teenager, identified as 16-year-old Raymond Ramon, was pronounced dead at Cooper University Hospital.
Feliciano is charged with first degree murder.
Feliciano and Ramon are cousins, and family members are baffled by the shooting.
"I don't know how it happened. They were like two peas in a pod," said Feliciano's sister Chrystal Mendez.
The 68-year-old who was shot is Feliciano's uncle, Juan Lopez. Investigators are still unsure how Lopez was shot. Family members say he was in a house next door to where the initial gunfire occured. Bullet holes are visible in the home.
"I think the cops shot my uncle," Mendez said.
Authorities won't confirm or deny that claim, saying only that Lopez was wounded in the exchange of gunfire.
Lopez was said to be recovering, and was upgraded to stable condition on Wednesday.
Feliciano has not been charged in Lopez's shooting. However, has a record that includes burglary and weapons charges.
Assistant prosecutor Gregory Smith outlined the charges in court Wednesday morning.
"The defendant did speak with investigators and he did admit to shooting the victim inside the residence prior to police arrival," Smith said.
When officers arrived, they say Feliciano shot at them, and officers returned fire.
Police say Feliciano fled into his home, but surrendered shortly after.
Feliciano faces life in prison for the alleged murder of his cousin.
