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What is the outlook for NJ real estate for 2018?

Contrary to what many local experts are calling “misconceptions,” and perhaps even ‘fake news’, the NJ Real Estate Report and NJ Business Magazine say that their calculations show the new tax changes will actually be a positive for many New Jersey home buyers and homeowners this year. Especially in the short term.

Last year NJ residential real estate sales rose to $38.3 billion, up 10% from the year before. The bulk of counties in the state have less than 8 months’ of housing inventory for sale. Some have as little as 4-5 months worth of inventory for sale. This suggests a pretty healthy market overall.

RealtyTrac has reported foreclosure activity slowing at the end of 2017; though the state still has the highest rate of foreclosure concentration in the US. The only metric up as of December 2017 was bank owned property. This suggests this distressed inventory and REOs are moving through the system more swiftly, and the recovery is still picking up pace.

House price and volume growth is still expected to be up this year. Though it may be moderated by less inventory and higher interest rates later in the year.

This gap, with REO property coming into the marketplace and the simultaneous growth in home prices presents sizable profit opportunities to those with access to deals. This could be complemented even further by a strong economy, extremely low unemployment, rising wages, and positive corporate reporting, following lower corporate tax rates.

Presenting the Annual Central New Jersey Real Estate Forecast in January, the Real Estate Business Alliance predicted a “banner year” in 2018, with a strong outlook for 2019 and 2020 too.

We could specifically be seeing more investment opportunities in distressed property and renovating and repositioning single family homes, multif-amily rentals, and mixed use properties. This could include more focus on higher end rentals and even corporate housing.

Mortgage notes should also perform well for investors during this period. When unemployment is low, equity is building, and borrowers have more cash, they are more likely to pay their home loans, and protect their investments. More may even get back on track this year, after faring even better than expected during the tax season with some getting back even larger tax refunds this year.

It may take a few weeks before confidence returns to the markets, creating a later than normal surge in the data. This is giving tuned in investors a great opportunity to act fast and benefit from an organic lift in the late spring and summer months.

Investment Opportunities

Find out more about investing in secured debt and real estate, go to NNG Capital Fund

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