When the new tax legislation was passed in late 2017, many experts predicted negative impacts on the real estate market as some incentives were cut or eliminated for the 2018 tax year. Those predictions included decreased sales and stagnant values as buyers and sellers felt compelled to wait due to the loss in deductions from interest or property taxes.
Now that we are well in to 2018, it’s safe to say the market hasn’t taken the hit than many experts were predicting. Bastrop demand is outpacing supply as evidenced by multiple offers resulting in above listing price sales at a record pace. However, tight inventory is putting downward pressure on sales units simply because there are not enough homes to go around. Many sellers are staying where they are longer because they can’t find the home they want to move into creating a cycle that is slow to change.
Lawrence Yun, NAR chief economist, attributed the slight sales slump seen in April to spring’s staggeringly low inventory levels. “The root cause of the underperforming sales activity in much of the country so far this year continues to be the utter lack of available listings on the market to meet the strong demand for buying a home,” he said.
Experts predicted buyer demand would shrink as interest rates began to climb and incentives to dwindle. This hasn’t happened. Nationally, buyer showings as reported by Showingtime were up 4.6% in April compared to the same time last year. Interest rates are still climbing causing many buyer’s budgets to constrict but this hasn’t caused a dip in activity as of yet. Interest rates will likely continue to climb throughout the year but buying a home is still extremely affordable in most markets and the best investment vehicle available to build long-term wealth.
Only you can decide what is right for you but owning a home offers significant benefits far beyond tax advantages so don’t let that be your deciding factor. Professionals like real estate agents, mortgage professionals and tax advisors can provide a long list of reasons to purchase a home but you will need to make a decision that meets your needs. Call me to discuss your specific situation and what is best for you.
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