Have you been considering buying a home, but have been on the fence about it, unable to commit to buying? It just may be time for you get down off that fence and make a move. Yes, the real estate market has its ups and downs, its inevitable cycles. But the cycle seems to have reached a point quite favorable for home buyers. So let’s consider why now may be the best time to buy real estate in San Bernardino, Riverside, and San Diego Counties.
1. Low-Interest Rates
Mortgage interest rates are still relatively low (compared to what they were), but there’s no way to predict with any certainty how long that will last. Interest rates have risen slightly from historic lows a few years ago, but they remain low enough still to make buying a house pretty attractive.
Currently, interest rates are slightly over 3% for both 30-year and 15-year fixed-rate mortgages. Still, rates could go up at any time with the current trade issues and possible antics from the Federal Reserve. So now would be a good time to buy real estate in San Bernardino, Riverside, and San Diego Counties before mortgage rates increase significantly.
“Let’s your mortgage principal is $200,000. If you secured your mortgage with a 3.87% interest rate, the total interest you would pay over the course of the loan would be $138,571 (360 monthly payments of $940, for a total of $338,571). Now, if you secured a mortgage with a 5% interest rate, the total interest you would pay over the course of the loan jumps to $186,153, a difference of $43,581.”
2. Rising Prices
Another reason to buy real estate in San Bernardino, Riverside, and San Diego Counties now is that home prices are still rising. They are increasing at a slower rate than they were a year or so ago, but they’re still going up. So why would you wait till home prices get even higher, as they inevitably will because the trend displays no signs of stopping?
Home prices rose by about 5% in 2017 and around 3.5% in 2018. So the increase is happening at a slower rate, but still happening. If you wait, then, you’ll wind up paying more for a home than you would if you bought now. And don’t forget that interest rates, as we mentioned, will likely go up too, so waiting gets even more costly.
3. Low Inventory
In addition, inventory in real estate is still low – there just aren’t enough homes to go around right now. This means that competition is keen, which drives prices even higher.
And this low-inventory problem doesn’t look like it’s going away any time soon because new construction is still fairly stagnant. And keep in mind that when interest rates rise, “people are less likely to put their homes on the market in an effort to preserve the lower interest rates on their mortgages.” Inventory then remains low (at best) or decreases even further.
So, again, now is the time to buy real estate in San Bernardino, Riverside, and San Diego Counties. It’s just that low inventory makes the services of a good agent even more critical. (Find out what a local agent can do for you by calling 8665937012.)
4. Tax Benefits
A very good reason why now may be the best time to buy real estate in San Bernardino, Riverside, and San Diego Counties is so that you can begin enjoying the tax benefits. Even with the recent changes in tax laws, tax rates favor homeowners, and ownership remains a good tax shelter.
At tax time, you can deduct your mortgage interest, which makes up the lion’s share of your mortgage payment in the early years. You just have to make sure your mortgage loan balance is less your home’s price. Then, up to the new limits, your mortgage interest is deductible, and you save money on your taxes.
Another important tax break associated with homeownership is the deduction for property taxes. Even with the new cap, if you live in a high-tax area, this could amount to significant savings – another reason to buy real estate now.
Despite the fairly recent real estate debacle, real estate remains a sound long-term investment. Of course, real estate has its cycles, sometimes up in value and sometimes down, but over the long haul, say, 30 years, it almost always appreciates and increases in value. The simple fact is that over the years real estate has consistently appreciated – but it’s a long game.