Looking to Upgrade Your Current Home? Now’s the Time to Move-Up!

Looking to Upgrade Your Current Home? Now’s the Time to Move-Up! | MyKCM

In every area of the country, homes that are priced at the top 25% of the price range for that area are considered to be Premium Homes. In today’s real estate market there are deals to be had at the higher end! This is great news for homeowners who want to upgrade from their current house and move-up to a premium home.

Much of the demand for housing over the past couple years has come from first-time buyers looking for their starter home, which means that many of the more expensive homes that have been listed for sale have not seen as much interest.

This mismatch in demand and inventory has created a Buyer’s Market in the luxury and premium home markets according to the ILHM’s latest Luxury Report. For the purpose of the report, a luxury home is defined as one that costs $1 million or more.

“A Buyer’s Market indicates that buyers have greater control over the price point. This market type is demonstrated by a substantial number of homes on the market and few sales, suggesting demand for residential properties is slow for that market and/or price point.”

The authors of the report were quick to point out that the current conditions at the higher end of the market are no cause for concern,

“While luxury homes may take longer to sell than in previous years, the slower pace, increased inventory levels and larger differences between list and sold prices, represent a normalization of the market, not a downturn.”

Luxury can mean different things to different people. It could mean a secluded home with a ton of property for privacy to one person, or a penthouse in the center of it all for someone else. Knowing what characteristics you are looking for in a premium home and what luxury means to you will help your agent find your dream home.

Bottom Line

If you are debating upgrading your current house to a premium or luxury home, now is the time!

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3 REASONS WHY BUYING A VACATION HOME COULD BE A GREAT INVESTMENT

Couple Standing on Balcony Looking At The Ocean

1 – House Price AppreciationTHREE REASONS WHY BUYING A VACATION HOME COULD BE A GREAT INVESTMENT

The average rate of house price appreciation in the US over the past 20 years has been over 3% per year.  This means that if you bought a vacation home 20 years ago for $100,000, it would likely be worth over $180,000 today.  If you used a 20% down payment, your $20,000 investment would have yielded more than an 8% annual rate of return.

2 – Ability to Rent Out the Property and/or Save Money on Hotels

You may be able to rent the property for part of the year that you’re not using it.  Additionally, you could save some money on hotel bills if you vacation in your own property instead of vacationing in a hotel.  These factors could help you to reduce your cost of ownership.

3 – Step-up in Tax Basis

If you keep the property for your entire lifetime, your heirs will likely receive a “step-up in basis” when they inherit the property.  This means that their tax basis “steps up to” the future value of the property.  In our example above, if the property is worth $180,000 when your heirs inherit it, their tax basis would be $180,000.  This means that they could sell the property and pay absolutely nothing in capital gains taxes.

Contact me for more information or to consider your mortgage options.

Real Estate is Best Long-Term Investment

Americans Believe Real Estate is Best Long-Term Investment | MyKCM

According to Bankrate’s latest Financial Security Index Poll, Americans who have money to set aside for the next 10 years would rather invest in real estate than any other type of investment.

Bankrate asked Americans to answer the following question:

“Which would be the best way to invest money you did not need for more than 10 years?”

Real Estate came in as the top choice with 25% of all respondents, while cash investments (such as savings accounts and CD’s) came in second with 23%. The chart below shows the full results:

Americans Believe Real Estate is Best Long-Term Investment | MyKCM

Sterling White, co-founder of Holdfolio, gave one reason as to why real estate may have ranked so high.

“Houses are tangible. You can physically see and feel the product. So you know where your money is going.”

July’s poll also found that for the “26th consecutive month, Americans’ sense of financial well-being improved when taking into account debt, savings, net worth, job security, and overall financial situation.”

Bottom Line

There are several reasons, both financial and non-financial, as to why homeownership makes sense. It is nice to see that Americans have returned to a belief in homeownership as the best investment.