The real estate market has experienced some fairly major upheavals during the past two or three years. One of them is that the has been heavily weighted in favor of sellers owing to low inventory, fierce buyer competition, and rising home prices. As a result, many potential home buyers are reluctant to jump into the market. But market conditions are now changing, and sellers don’t have the upper hand that they did just a short time ago. Buying a home is, of course, a highly personal decision, but right now may be the time to buy. Here are 4 huge advantages of buying a home today in Kauai.
1. Inventory is Increasing and Sellers Are Willing to Grant Concessions
Over the past couple of years or so, almost anyone buying a home has been at a huge disadvantage compared to those selling homes. The inventory of homes on the market has been woefully low, resulting in keen buyer competition and a strong seller’s market. Now, though, more homes are hitting the market so buyers are in a better position and sellers are far more willing to grant concessions
Even over the course of the past several months, the supply of for-sale homes has grown significantly. This growth in inventory has occurred for two main reasons: 1) more homeowners are listing their homes for sale, and 2) more homes are staying on the market longer owing to the increase in mortgage interest rates.
This is good news for those buying a home in Kauai or anywhere else. With more homes on the market, you have more homes to choose from. You will also have less competition from other buyers and won’t have to get into the bidding wars that were common a short time ago.
In addition, since sellers have lost much of their leverage, they are more willing to accede to a buyer’s request for concessions. In fact, a recent survey found that 42% of sellers granted concessions to buyers, including those for repairs and for payment of closing costs.
So the current climate spells a great opportunity for home buyers. But, still, to get the best deal with respect to concessions, you will need to work closely with an experienced Kauai agent. To consult an agent about this, just call 808-634-4518.
2. Home Values Always Increase Over the Long Run
We’ve all heard the financial advice stating that buying a home is a good investment, and over the long haul it is. Home values may dip from time to time, but in the long run, they go up. And that means that your investment increases in value and becomes worth more. In short, real estate remains an excellent investment, which is a definite advantage of buying a home today.
Some may object that because home prices have been rising dramatically, they are at risk of crashing as they did in 2008. But industry watchers don’t expect this to happen. Home prices are expected to moderate depending on various local market factors, a crash won’t happen. In fact, many experts anticipate a slight appreciation to be the norm for a good long while.
3. Rising Mortgage Rates Will Come Down
Not long ago, mortgage interest rates hit near historic lows, but since then, they have risen dramatically. This, however, is not a state of affairs that is expected to last. Mortgage rates will come down, and that is a reason for buying a home now even though, it seems, on the face of it, counterintuitive.
The fairly recent dramatic increase in interest rates has begun to level off a bit. This is largely due to the fact that inflation has been easing slightly. Where mortgage rates go depends in large part on what happens with inflation, and the outlook for inflation is a continued cooling – and as a result, rates decreasing.
And this phenomenon can offer you an advantage in buying a home today. As mortgage rates begin to decrease, more and more buyers will get back into the market. And that increased competition means you will be back in the bidding wars that drive prices up. Your buying advantage lies in buying before many other buyers jump back in.
4. Major Tax Benefits
One significant plus to buying a home today in Kauai is that you begin to take advantage of the tax benefits that much sooner. Owning a home carries tax benefits that just aren’t available to renters.
Probably the biggest tax benefit of buying a home is the mortgage interest deduction. You can deduct what you pay in mortgage interest when you file your income taxes. The only stipulations are that your mortgage loan is less than $750,000 and that you itemize your deductions.
You can realize significant tax savings this way. For example, suppose you buy a $400,000 home at an interest rate of 5%. In the first few years of owning, you will pay around $18,000 in interest. But when you deduct that amount, you can reduce taxable income and save thousands of dollars.
Get the Pro Assistance You Need for Buying a Home Today
It should be pretty clear, then, that there are some huge advantages of buying a home today in Kauai. Still, though, the market leans slightly in favor of sellers, so it pays to hire a good local Kauai agent to get the best deal possible. So if you’re looking to buy a home in Kauai, be sure to contact us today at 808-634-4518.