Reasons to Buy a Sanibel Home Even If Interest Rates are High
Many people dream of buying a home on Sanibel Island but somehow put their dreams off because interest rates have remained higher than expected for some time. Though they have come down slightly, and given buyers a little bit more purchasing power, they are still relatively high as compared to the pre-pandemic mortgage rates that seemed somewhat normal.
And even though rates have come down slightly cautious homebuyers are still concerned about where mortgage rates could go as they took us on a roller coaster ride over the last three-ish years. Mortgage rates have been a challenge and a change in the landscape of home affordability over the past couple of years.
It seems like a terrible time to purchase a home with inventory low and mortgage rates high. Some housing experts believe that there might be a hidden window of opportunity in purchasing a home in Sanibel or anywhere across the country right now. Here are a few reasons why purchasing a home currently could be a good idea.
Prices are Predicted to Increase
As mortgage rates are coming down and some are predicting them to continue to drop, house prices are expected to increase. Home inventory remains low but the demand for homes remains high and this keeps market values increasing. Data from November 2023 just a few months ago showed that home prices increased from the year previous. Each local real estate market has different pricing trends but several locations across the country have continued to increase values.
Some areas have seen price increases just below double digits. This makes a significant impact on the affordability of a home as well. Even if mortgage rates drop a 10th of a percentage point it will make for little impact on a home that has increased its value by 7%.
Though inventory remains low and there are more buyers interested in buying homes than there are homes for sale, there has been a cooling in the competition between buyers trying to purchase the same home. This cool-off has given buyers a little bit more negotiation power in purchasing a home. It has not completely balanced the market back out but it has tipped the scales a bit in a buyer's favor. As mortgage rates drop more and more this brings more buyers into the market and this could bring back more bidding wars and competition.
This also helps a buyer to be able to ask more from the sale to help get the home sold. For example, at the peak of the pandemic when interest rates were 2% buyers were so competitive that sellers had to do practically nothing to sell the home. Today buyers benefit from contingencies and concessions they would not be able to ask for during that time.
The competition was so fierce that if a buyer was brave enough to go through with a home inspection they wouldn't dare ask for a home seller to fix any issue referenced in the inspection report. Today buyers have the leverage to ask for fixes or negotiate a different price point. Competition heating up could lead to buyers giving up these powerful negotiation tools again.
Home Inventory is Slowly Increasing
The real estate market has seen an astonishing low inventory for several years. The pandemic brought it to lows we never expected. However, the housing inventory has been below what is considered a balanced market for some time prior to the pandemic. But there are promising increasing numbers. Inventory has grown 5.1% from September to October 2023 and many believe this is a sign that inventory will continue to slowly increase. This of course is great news for someone looking to purchase a home on Sanibel or anywhere else for that matter.
If You are Ready as a Buyer Then Any Time is the Right Time
Regardless of market conditions, if you have the personal financial ability to purchase a home and need to move to a home that better suits you, now is the perfect time for you to purchase a home on Sanibel. Don't wait for some perfect magic realistic condition to buy a home. If your next home purchase fits within your affordable budget and you have the personal financial ability to purchase a home now is the perfect time for you to purchase a home on Sanibel. If your next home purchase fits within your affordable budget then there is no need to worry about committing to homeownership.
If you are looking for a home on Sanibel Island I can help. Contact me anytime with any Sanibel real estate needs. I am a local realtor dedicated to serving my clients and helping them find a home they will love.