New Jersey real estate doesn’t usually start to really surge until late spring and summer, when the buyers come out in masses and more movers get motivated. This year is different. What does it mean for investors?
NJ.com reports that properties are already selling in just days. Typically with multiple bids. It isn’t uncommon for there to be a dozen offers and for listings to sell for $50k to $75k above asking prices.
Why is this happening?
It is really a combination of several factors. The culmination of these factors is creating a self fueling upward spiral that is pulling in everyone around it. People see their neighbors cashing out at great prices, properties selling so fast, and they don’t want to miss out.
Low interest rates are certainly helping to fuel buyers, including first time home buyers, move up buyers and even those downsizing. The chaos of last year has definitely also been driving many households to seek out new types of housing in new areas than they may have chosen before. This is causing significant spikes in some places.
What’s the best strategy in the middle of all of this?
For those with assets in mature areas which they believe won’t appreciate much over the next seven years, it can be appealing to sell and restructure their portfolios. Those who see the long term value curve may still find many attractive buy and hold properties. Flippers have found their sweet spot where prices are going up fast.
This surge is only likely to continue through until the fall and get more intense. How long this run will last at this pace isn’t really known. There are many factors that could extend or stall and slow it down after that.
For those that want to make the most of this opportunity, without worrying about getting stuck with all of their capital in an asset if things change, it pays to play the hybrid approach and utilize several of these investment strategies simultaneously. This way you get to enjoy the best of all worlds, while minimizing risk, and not missing out.
The real challenge of note here is that with such a competitive market, most average individual investors cannot compete well on their own. Sellers, especially those offering good deals are able to be pickier than ever about who they sell to. They are only choosing the strongest buyers. They are looking at who has the most money down, best credit, is best qualified and has the best reputation. There are great acquisition opportunities out there, but in this market you may only find them if you are well connected, partner up or invest through a fund.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund