Increased purchasing power is driving high demand in the real estate market. In spite of the coronavirus pandemic and its negative impact on the economy, the real estate market remains strong.
In fact, mortgage applications were 13% higher than a year prior. Interest rates remain near record lows providing homebuyers with enhanced purchasing power. In addition, there is a lot of pent-up demand from the coronavirus stay-at-home orders.
Tampa Bay is one city that stands to benefit. Read on to learn why it is the perfect time to buy a luxury home in Tampa Bay.
Mortgage Rates Are Low
One reason that many people are buying right now is that interest rates are so low. The average rate for a 30-year mortgage was just 3.24% in the first week of June.
Some lenders are advertising rates as low as 2.5%. A mortgage rate being this low is virtually unheard of.
The benefit of such low rates is that it increases the purchasing power of buyers. They can afford a more luxurious house with lower financing charges each month.
The good news is that historically low-interest rates are here to stay. The United States Federal Reserve indicated that they would not raise rates until 2022.
In 2017, the United States Congress passed the Tax Cuts and Jobs Act (TCJA). The TCJA had a significant impact on real estate.
In the past, homeowners could deduct their property taxes from income taxes. However, the TCJA placed a $10,000 deduction cap on state and local taxes (SALT).
This cap put a significant burden on states with high income and property taxes. The state of Florida does not have a state income tax and boasts low property taxes. The end result is that states like Florida are more financially appealing than highly taxed ones.
The Northeast region of the United States is not too appealing right now. States like New York and New Jersey were devastated by the coronavirus pandemic. The primary reasons are climate and population density.
Southern states with large populations, like Florida and Texas, fared much better with the coronavirus. They have fewer positive Covid-19 cases and a lower infection mortality rate.
Scientists believe that the virus does not survive as long in warm, sunny weather. In addition, the Tampa area is less populated than Northeastern cities like New York City and Boston.
Tampa has a population of less than 400,000, while NYC is more than 9 million people. Homebuyers in Tampa can enjoy the perks of city life without putting their family at risk of a pandemic. You do not have to sacrifice arts, culture, and fine dining when living in Tampa.
Now Is the Perfect Time to Buy in Tampa Bay
It is time to strike while the iron is hot. Mortgage rates are near record lows and you stand to financially benefit by moving to the state of Florida.
If you agree that it is the perfect time to buy, contact us today to schedule an appointment with our real estate team.