In Northeast

Riding market highs and market lows—while finding good investment opportunities regardless—is something that real estate investors have to get used to. When I first began investing in New Jersey real estate, I was in a constant state of anxiety. I read the local real estate news fanatically, trying to make sense of it all. I felt like I was always scrambling just to keep up.

Now that I’ve been around the block a time or twenty in the Jersey City market as an, though, I’ve learned to settle in and trust that opportunities to boost my ROI are always around the corner. It seems, once again, that time is now. With the current market conditions and huge property tax hikes that kicked in last year, investing in real estate may help our local economy stabilize sooner rather than later.

Jersey City Real Estate Market Trends for 2019

JERSEY CITY’S 2019 MARKET TRENDS SUGGEST INVESTING OPPORTUNITIES

Historically known as the gritty underdog compared to New York’s boroughs and even neighboring Hoboken, the end of 2016 marked Jersey City’s coming of age. For the first time, Jersey City swiped the Curbed Cup award, taking the title of “Neighborhood of the Year” for New York City. Locals cited their preference for Jersey City over New York because of the relatively lower home prices, taxes, and crime in addition to access to transportation to the big city. That level of enthusiasm from native New Yorkers continued throughout 2018. With the demand for affordable housing in hip communities that have local pride still going strong, Jersey City could easily remain a tough contender as one of the places to be in 2019—even by non-New Yorkers.

Thanks to its popularity, the Jersey City real estate market has been humming steadily along, despite the occasional dip in prices and sales. Median home sales prices more than doubled from 2016 to 2017 and, though we didn’t see a similar spike over the last year, home prices still increased by almost $100,000. Sellers are getting nearly very close to their asking price, too. This is striking given that statewide sales have decreased and, in some cities, median home sales prices have dropped. So, in deciding where to hang your investing hat in the coming year, you’re far more likely to realize potentially significant returns in Jersey City than in some of the other communities across the bay.

Of course, where you look for leads on investment property will impact whether or not you see the opportunities available. The foreclosure picture in Jersey City, for example, gives a more complicated impression of the market, according to RealtyTrac analytics. The number of newly-foreclosed homes at the auction stage spiked in September of 2018, while bank-owned properties had a big jump the month before. So, for a time it looked like the market was flush with distressed opportunities if your investment strategy relied heavily on getting leads on REOs or buying foreclosure auction homes. Pre-foreclosures, on the other hand, were on an overall decline, making the potential for future pickins’ look pretty slim. And, by December of last year, all stages of the foreclosure process were trending downward from the year prior—despite the state of New Jersey still having one of the highest rates of foreclosure in the country. Does that mean we will see increased competition for investing in distressed homes?

The short answer: not necessarily.

You’ve seen it all over the news that Jersey City’s property tax revaluations resulted in a significant tax increase for many residents, who started receiving their bigger bills last summer. Homeowners then had only ten days after receiving their reevaluation letters to file an appeal. Not that an appeal would have done residents any good; the new amounts—some of them triple the cost of what a homeowner was used to paying—came due in full as soon as the data was in and the city’s budget was finalized.

The revaluation didn’t result in a tax hike for everyone as feared—in fact, homeowners in some neighborhoods saw a decrease in their tax bill—there are two areas that have experienced big increases. Long-term residents whose property taxes were set years ago when the rate was based on old valuations were taken by surprise even by relatively small increases. Retirees living on a fixed income in Lafayette or Journal Square, for example, may be having a hard time meeting a tax bill that only jumped around a thousand dollars. Plenty of residents in other neighborhoods, too, still worry that the home they once viewed as an investment may, instead, turn into a liability.

As a result, it’s possible we’ll see many homeowners desperately needing to sell so they can live somewhere more affordable. This gives you the chance to buy, renovate, and sell homes in two types of Jersey City neighborhoods in 2019: the first being where higher tax bills may be causing homeowner distress and the second being in areas where these homeowners may turn to find more affordable housing. Since median home sales prices across the city are on the upswing, as long as you purchase property at below-market prices and keep your repair costs under control, you stand to make a sizeable difference in your bottom line despite the lower rate of foreclosure activity throughout the city.

INVESTORS CAN TURN LOCAL LEMONS INTO LEMONADE

Providing homeowners with “solutions for their ugly situations®” by buying the homes they can no longer afford also gives you an opportunity to make a difference in the community while building your business. That, in turn, has the potential to improve the local economy, too. The key, of course, is to ensure that you have a lead generation strategy in place for 2019 that helps you find motivated sellers on a regular basis. As an independently owned and operated HomeVestors® franchisee, I have the benefit of access to the nationally-known “We Buy Ugly Houses®” marketing campaign that drives distressed homeowners to me. So, my scrambling days are over. My ability to improve my bottom line, and the lives of my fellow Jersey City neighbors, however, is never-ending.

Make this the year you don’t have to scramble for leads. Contact HomeVestors to find out how you can turn local lemons into lemonade by connecting with motivated home sellers today.

 

Each franchise office is independently owned and operated.

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