Buying a Boston Seaport condo is a big commitment. Knowing when to dive into the real estate market can be intimidating, especially when there is low inventory, high prices, such as Beacon Hill. Even if you have purchased a home before and think you know the process, what worked back then might not be what works now. To help prepare you for what may come, here are a few things to know before diving head first into the 2019 Boston downtown real estate market.
Learn How the Tax Code Will Effect You
The recent tax reforms have caused some concern that they will put their Boston luxury condos ownership even further out of reach for many Americans, while also decreasing the tax benefits for owning a home. But that shouldn’t be reason to deter you from making your move. For example home-owners can deduct mortgage interest on loans up to $750,000, that’s down from $1 million. This change is expect to affect 1.3% – 2% of mortgages in the U.S.. The bottom line is to educate yourself on this new tax plan and how it will effect you.
Mortgage Rates Are on The Rise
For the past several years, homeowners have benefited from historically low interest rates – around 3% – 3.90%. But the Fed has recently begun to make some noticeable increases. Last year, the rate for a 30-year fixed mortgage broke 4%. With economic growth gaining momentum, we could see between two to four more rate hikes this year. Rates could end up closing out the year at 5%. First time home buyers should keep an eye on these trends and forecasts.
Debt Limits Have Increased
In mid-2017, Frannie Mae announced that they would now be purchasing loans with borrowers who have debt-to-income ratios up to 50%. That’s up from their previous limit of 45%. This is a good bit of information for first time home buyers to know because it could make mortgage loans easier to obtain, especially for those who have a higher level of debt.
Home Prices Are Rising More Slowly
Boston high rise condo prices have soared over the last few years, forcing other-wise qualified buyers out of high priced areas. But in 2019, price increases are expected to slow and become more moderate. Economists expect prices to rise by 3.5% – 5% nationwide this year. But it all depends on where you live. Some cities, where economic momentum has been steady, could see larger gains. While red-hot markets are predicted to finally lose a little steam.
Prepare for Competition
Boston Beacon Hill condo inventory continues to be at a record low across the country, meaning that the days of multiple offers won’t be subsiding anytime soon. Because of this we have seen the all cash buyer willing to pay full price or more. According to the National Association of Realtors, 23% of all homes purchased in January of last year were cash buyers. And some experts believe that number will rise this year.
Since these types of buyers don’t need to secure financing, they not only have an edge on the competition but they’re also more appealing to the seller. That doesn’t mean all hope is lost. There are plenty of creative ways to appeal to a seller, such as writing a letter about yourself, your family, and your situation. Learn more about surviving a seller’s market.