2018 Tax Law and the Long Beach Island NJ Real Estate Market
Tax Reform and the LBI NJ real estate market are two very important topics for all buyers and sellers on Long Beach Island to be concerned with. The recent changes to the tax law specifically have elements that can target the Northeast (New York, New Jersey, Connecticut) areas. Most notable are the changes tot he property tax deductions which have caused some to speculate there will be a drop in real estate values. That initial fear certainly had spilled over to the LBI real estate market but now that the real facts of the law are out and being digested the reaction has softened significantly. There are many other positive factors that seem to point to the LBI real estate market staying strong.
Tax Reform and the LBI NJ Real Estate Market
Despite the impact on homebuyers of the tax reforms, economists are confident it will benefit the housing market. This seems to be the case on Long Beach Island as well. That’s because they predict that the positive impact for businesses will mean a boost for the economy and for jobs, handing the housing market new entrants and confident consumers. “We expect that tax reform will boost GDP growth to 2.6% in 2018, and this added economic activity will also bode well for housing, although there will be some transition effects in high-tax jurisdictions,” said NAHB Chief Economist Robert Dietz. “Ongoing job creation, expected wage increases and tight existing home inventory will also boost the housing market in the year ahead.” Not that it will be an easy time ahead for builders with shortages of labor and lots still challenging their ability to meet demand. The panel at a NAMB conference forecast that there will be 1.21 million housing starts with production up 2.7% year-over-year to 1.25 million units. Single-family starts will gain 5% this year and in 2019 to 893,000 and 940,000 respectively. Multifamily starts will decline 1.6% to 354,000 this year (from 360,000 projected for 2017). “Rates on home loans are expected to rise from 4 percent to 4.5 percent by the end of year,” said David Berson, senior vice president and chief economist at Nationwide Insurance “However, housing demand remains strong and wages are solid, and this will more than offset the negative effects from rising rates.” Source: The NAMB. While much of this data relates to the national real estate market, which to be fair is very different from the LBI real estate market, the overall positive theme is what we like to see!
Buying and Selling in the LBI NJ Real Estate Market
Overall it seems that the real estate market on Long Beach Island will continue to remain strong. There seems to be no slow down of buyer activity and the fundamentals of the economy remain strong. This is in spite of a recent drop in the stock market. The LBI real estate market has also been boosted by the impressive wave of new building that has taken place since Hurricane Sandy. This has helped to create an improved and safer market outside of the parameters established by the economy. Overall Tax Reform and the LBI NJ Real Estate Market seem to be causing little impact on the LB real estate market.
By : Nathan Colmer | The Van Dyk Group
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