Posts Tagged 'tax law'

Market conditions – Affordability & Inventory

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The spring housing market has been similar to 2017, inventory is tight and housing prices are strong. Hesitancy over new tax laws and the deductibility of prepaid property taxes has caused some sellers to ‘wait-and-see’, limiting supply, and causing New Jersey home buyers to wonder whether there is any relief in sight.
Trends to know for 2018:
1. Recent tax changes are keeping some home sellers on the sidelines.  The Tax Cuts and Jobs Act may have far-reaching effects for the New Jersey real estate market. In 2018, homeowners will have their state and local tax (SALT) deductions capped at $10,000. A work-around has been approved by Gov Murphy but how the feds react to it is still to be determined.
2. When the new tax bill was announced, many New Jersey residents prepaid their first and second quarter 2018 property taxes in the hopes they could deduct those payments on their 2017 tax returns. As it turns out, the treatment of these payments may differ for Federal and State returns.
New Jersey home prices continue to rise – Reduced inventory is underpinning home prices in NJ. Early indications for the 2018 spring market show strong demand for homes, due in part to wage growth and a strong job market. Both have contributed to a very competitive housing market, and home prices continue to rise. The Home Buying Institute anticipates home prices could increase by 3-5% this year in the United States, and northern New Jersey is seeing strong markets particularly along the Midtown Direct train line in towns such as South Orange and Maplewood.
3.  Although mortgage rates are expected to rise in 2018, they remain historically low. Current 30-year fixed mortgage rates are hovering at about 4.5%, and many forecasters predict they will end the year higher. Low interest rates are keeping home buyers (especially families) active. Many want housing contracts in place before the start of the school year in the fall so children can take advantage of highly-rated school districts along the Midtown Direct.
4. Millennials are moving to the suburbs from New York City
Although New York City rents are softening, Millennials are still migrating to the suburbs where there’s more square footage for the price. While overall rent levels may be starting to drift down, according to StreetEasy; New York City rents are still increasing twice as fast as wages. Compounded by the fact that many Millennials are starting families, city dwellers are leaving New York City in search of nice neighborhoods, more space, and excellent schools. And with plenty of options to facilitate the daily commute into New York, New Jersey has become a go-to place to live. In addition to Maplewood & South Orange, towns such as Montclair, Summit, Chatham, and Westfield are just a few more that are top of the Millennial list due to their walkable & fun downtowns, entertainment, shopping, and trending restaurant scenes.
Are you considering a move to northern New Jersey? I would love to assist you.
With 9 years of experience buying and selling homes, I can help you take advantage of current housing trends and find the home of your dreams. Contact me at 201 600 8141 or ken@kenkrasnerhomes.com

Link to Forbes article and more details

 

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