While most Americans are thrilled by declining oil prices creating up to a 50% reduction in the cost of gas at the pump, many homeowners and buyers are asking “How are declining oil prices good for real estate?” At the same time, experts are speculating on the subject. Most agree that at least in the short term, the current downturn in oil prices is a good thing for those selling or buying property. Here are four reasons why:
- Gen Y Home Buyers
For those in the Gen Y generation, lower gas prices mean more money to spend on their student loans. Many are waiting to pay off their student loans before saving for a down payment on their first home because paying off that debt puts them in a better financial position to qualify for a mortgage. This is an important decision for Gen Yers since starting a family is high on their priority list.
- Investment opportunities for mom-and-pop investors
Many parents in the baby boom generation are purchasing property (think condo) for their college-age children rather than paying dorm costs. Other baby boomers are investing in property to create retirement cash.
- 2015 mileage deduction
Starting this year, drivers are encouraged to take the 2015 mileage deduction in their taxes rather than deduct the actual costs of operation, because the IRS has set the mileage deduction this year at 57.5 cents per mile (based upon $4 per gallon gas prices).
- The luxury market
We’re already seeing that lower oil prices mean more money for Americans to purchase in the luxury market, where foreign buyers have been major players.
For more insight into the question “How are declining oil prices good for real estate?” read the article “Declining Oil Prices: Boon or Bane For Real Estate?” in Inman News, the place real estate agents and brokers from around the world turn to for accurate, innovative and timely information about the industry. If you are planning to sell a luxury property in Montecito or any of the surrounding areas, I suggest you act quickly. The rise in luxury home sales will bring with it a building boom in this sector. It is important you list your property while there is still a limited amount of homes available. Let’s discuss your real estate situation. Please give me a call at 805.886.9378 or email me at Cristal@montecito-estate.com.