Is the market hot or not?
January market reports are in and they don’t look so good. Check out the info graphic below and you will see more inventory (which means more competition), more days on market, fewer homes being sold and prices going down. It looks terrible! However, if you compare YEAR to YEAR, things don’t look so glum. For example, the median sale price increased 2.6% over last year. It’s not double digits like we’ve seen in the past, but it supports the argument that many analysts have made that the market is stabilizing, not tanking. Within the sub-market of fix and flip, we are hearing stories of lots of showings, multiple offers and strong offers. Buyers may be few, but they like fixed up houses! They just aren’t willing to overpay, so calculate your ARV wisely.
The “O” in O-zone means Opportunity
We are hearing more and more about Opportunity Zones, a.k.a O-zones, a program recently expanded by the 2017 tax reform bill. The goal of the program is to incentive investment in low-income neighborhoods by allowing investors to take their capital gains (any gains, not just real estate) and reinvest them into O-zones (any investment, not just real estate) with tax-free benefits. There are special rules for purchasing property within an O-zone in order to receive the benefits, so make sure you investigate before you purchase anything. However, properties already within O-zones have the potential to appreciate faster simply because the neighborhood is being redeveloped.
QUOTE OF THE WEEK
“EXPECT PROBLEMS AND EAT THEM FOR BREAKFAST.“
~Alfred Armond Monapert
See you soon,