Wait, we're buying? Now?
People often judge when a good time to buy a home based on the perceived difficulty of doing so. Often, buyers are influenced by the news media telling us all the sky is falling – for whatever reason it is this week.
Realtors use market statistics to define three types of real estate markets;
The Seller’s Market –
This is a market where demand dwarfs supply and there are the fewest options for purchasers. The economy may also be on fire, fueling the craziness. Prices rise, sometimes quickly, and the market becomes frenzied. If you’ve been looking around during the last couple of years you’ve likely experienced the recent seller’s market and the multiple offer, take no prisoners environment that came with it.
The Balanced Market –
You’ll have noticed recently that prices have steadied or moderated and supply increased over the last couple of months while demand has decreased. These are all indicators of a market where supply ( the number of listings ) and demand ( the number of buyers ) has become more equalized and there is a better balance. Time to sell increases and there’s often more time if you’re a buyer, to do more diligence on what you are buying.
The Balanced Real Estate Market is often the best of both worlds for buyer, seller and everyone involved because there’s less pressure on all concerned. Most realtors will tell you this is one of the best times to buy.
The Buyer’s Market –
Some of you will have bought, as we did, during what Realtor’s refer to as a Buyer’s Market. The economy is in full on recession, prices are dropping and there’s plenty of inventory and few buyers. This might seem like the best time to buy, but it comes with its challenges – it becomes even harder and more costly to borrow money because lenders see increased risk in a weakened economy and decreased values. Although we ended up buying a home at a discount (i.e. below asking), it took us several tries to find a lender to agree to lend money on the property we wanted to buy.
So when is the best time for you to buy? The twofold answer is ‘when you are ready’ and ‘now’. Let me explain:
When you are ready –
It’s of course entirely up to you when you start. You need to be prepared with your financing, an idea of where and how you want to live and most importantly, you need to be ready for the stress of buying. Some of your stress relief will come from great mortgage and realty advisors, but the whole thing is stressful, no matter what.
Now –
If you are ‘ready’ then the time to buy is now, not next year or the year after. There are two constants in the BC Real Estate market – a) Values will rise 3% per year on average and b) you cannot time the market i.e. sit back and wait for prices to plummet. Fourteen months hesitation for some friends increased their purchase price by $200,000 last year. That likely won’t happen again but it is an extreme example of why hesitating can be costly.
I hope you are enjoying your analogue summer… please don’t hesitate to call me if you have any questions or need help.
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