If you’ve been reading the news lately you’ve probably read that house prices are up, but interest (in terms of people wanting to buy homes) is not.
We are frequently seeing homes selling for less than asking – or selling for asking if priced appropriately.
So, how do you as a home buyer, or home seller, make the best choice when it comes to real estate? Especially if there is a downturn? Well, you have to take into account market factors, selling and buying strategy and a few worst case, best case scenarios.
1) Are we in a bubble?
A “bubble” is typically an unrealistic unsustainable value in an asset class that cannot continue. If everything in the market is being bought and sold at ridiculous prices that you know cannot sustain in your area – chances are you in a bubble.
However, a word to the wise – do not just assume you are in a bubble because prices have skyrocketed. Cities like Vancouver and Toronto are holding their prices.
If your market has now been flooded with an increase in supply, while demand stays low – it might suggest that bubble has burst.
If this is the case for you and you are trying to sell your home, you might be better off renting your home and waiting for prices to increase. If you absolutely have to sell it would be wise to price your home properly so that it does not sit on the market for a long time and you do not have to reduce prices.
Those two factors sometimes make people think that something is wrong with the house.
2) What happens if I buy my house or sell my home too early? Or too late?
This is a common question and typical fear. It’s a little bit of a catch 22 and a game of regret. Which scenario will regret more?
If you wait too long and the market crashes (or crashes more) you may lose money on your home if you are selling. If you are buying and you buy before the crash you should know it’s just a waiting game until the market rebounds.
You also have think about if you are buying and selling in the same market. If this is a factor – then your price is not as much as a factor.
3) How Do I know When To Get Into The Market?
Well, there are metrics to pay attention in order to hedge your bets…. but there are no GUARANTEES!
- What are the housing markets in your area doing? Are they up or down?
- How are interest rates? Are they going up?
- Are home prices going up or down?
- Is it a buyers market or a sellers market?
- Developments in the neighbourhood? Are there are a lot – is it an up and coming neighbourhood?
- How is the economy
Whenever you decide to get into the market, make sure it is calculated. Make sure you have done your research and talked to a realtor who knows the market inside and out.
As always, if you need help buying or selling your home, we are here to help.
Gregg Bamford and Ryan Bamford