Imagine your real estate investment business is a sailboat— a Sunfish, perhaps— and you are passing the breakers rolling in toward the shore. Already, your little ship is being buffeted by the waves of volatility. The risk is palpable as the wind squalls and ocean air rush toward your sails. Yet, you set your sights on the destination ahead and stay the course.
Regardless of the uncertain economic weather, your investment plan should always be your compass. Next year, investing in New Jersey real estate will certainly show some ebbs and flows in the market. Local market conditions alongside potential policy changes will offer both challenges and opportunities statewide. Here’s what you need to know to ride the waves.
A LIGHTHOUSE OF HOPE FOR INVESTING IN NEW JERSEY REAL ESTATE?
Looking ahead, your real estate investment business will experience some mixed winds, but the market is off to a pretty good start so far. New Jersey ended last year with a good increase in single-family home sales prices. Sales volume remained steady, and sale time dropped. Mortgage rates continue to remain relatively low and there is a general sense that residents will continue to pursue homeownership.
But, the somewhat slow growth in jobs may hamper housing starts, which is not bad news if you are focused on buying, renovating, and reselling distressed houses. With fewer new houses to choose from, buyers will be buying more of the existing stock. This is especially likely to be so in Jersey City, now that development has slowed there and the luxury market has been sated. Some experts are even forecasting a housing shortage before the market evens out. This will only increase the demand for existing housing among those that are gainfully employed. But where will you find leads on distressed houses to fill New Jersey home buyers’ needs?
The obvious choice for investing in New Jersey real estate is to look toward the foreclosure market. While the doom and gloom of the housing crisis is slowly becoming just a bad memory, New Jersey still has the nation’s highest foreclosure rate. Camden and Sussex counties are the leaders in this regard.
Foreclosure rates may also continue to soar in Jersey City as a result of property tax revaluations. The last property valuation was performed in 1988 and, as a result, the average home had been assessed at less than a quarter of its current market value. The current revaluation has made a lot of residents’ property taxes go through the roof, especially in the downtown area and in many of the older neighborhoods. New Jersey residents already pay the highest property taxes in the nation, and it recently got worse. Much worse. The Tax Cuts and Jobs Act limited the ability for homeowners to deduct state and local property taxes from federal income taxes.
Many residents— often seniors with fixed incomes— may be unable to pay the increased tax rates, creating an opportunity for you to help distressed property owners, while simultaneously stabilizing neighborhoods in crisis. To take advantage of these opportunities, however, you need to be able to reach distressed homeowners before their house goes into foreclosure. If you’ve been in the New Jersey real estate investment waters for any length of time, you already know that getting those leads can be easier said than done.
HOOKING THE BEST LEADS IN ANY WEATHER
Whether it’s Atlantic City, Trenton, Jersey City or another location where you find some great investment opportunities, HomeVestors® has the best marketing tools— tools that can bring the leads to you. By leveraging the nationally-recognized and trusted “We Buy Ugly Houses®” marketing campaign, HomeVestors® franchisees may see a steady flow of calls from distressed homeowners. As we move into next year, it’s a smart strategy to position your real estate investment business to help New Jersey property owners facing foreclosure and financial distress.
Get ready to weather the market fluctuations when investing in New Jersey real estate by getting in touch with HomeVestors® today.
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