As with anything, supply and demand play a large role in getting the best deal on your home. Finding the balance between having a variety of options, but decreased competition is a key goal. This is one of the main benefits of working with an agent. Their understanding of the local market can buffer some of the unknowns and help you find the best house at the right time. Read ahead to learn more about how to determine a good time to buy a home.
The pandemic has had a massive impact on the market since it began. A huge shift in priorities as people began working and spending more time at home created a mass exodus from the city to rural areas and created ripples in some local markets that don’t follow regular trends. While increased home prices would normally create a “seller’s market”, low mortgage rates have meant that demand has not slowed even if you have to pay more. This means there are more people in the market and homes are moving faster. If you are financially stable and able to qualify with the more stringent lending standards, the low-interest rates will work in your favour. The rates will be low for a while, so don’t feel pressured.
Spring is the time of year when homes start to appear on the market after the winter lull. Research shows that April brings the most selection but also more competition from other homebuyers. The inventory options will continue into summer but there tend to be even more purchasers in the market looking to move during nice weather and before school. Many people believe the fall is the best time to purchase a home because the number of available homes has decreased but will still offer lots of options, while the number of people wanting to move will take a nosedive as people settle into the routine of the school year. In the winter, your inventory options are low BUT home prices also tend to dip. You are less likely to get into a bidding war. So, while you may have less to choose from, you are likely to get a better deal financially, with January having the lowest prices historically.
The Local Market
Even with global and national trends and patterns, real estate has always been local. If you live in a city, you have likely witnessed more home sales than ever before as people in your community adjust to the pandemic lifestyle. If you live in a rural area, you’ve seen a huge influx of people looking for more space in their homes and yards. Some markets have seasonal fluctuations based on seasonal work, school, or weather. A real estate agent is the best person to help you navigate the local inventory to ensure you get the best price on the home that is best suited to you. Their understanding of the patterns, as well as their connection to local services, will prove invaluable when house-hunting.
Personal Financial Health
Ultimately, the best time to purchase a home is based on you. Your personal goals, financial health, and timeline will play the biggest role in determining the right time. Considering the trends and patterns are important but you need to ensure you are personally set up for buying your home, no matter what time of year it is.
If you work towards building a sizeable down payment and improving your credit score overall, you will not only make the whole process easier, but you will also receive the best deal. Mortgage lenders offer the best interest rates to the people with the best credit and down payment. Higher down payment will also save you money on your mortgage loan insurance. In Canada, mortgage loan insurance can be as low as 0.6% and as high as 4.5% of your entire mortgage amount. The higher your down payment, as a percentage of the total mortgage, the lower your fee.
Ensure that you can appropriately manage all the expenses involved in homeownership before taking the leap. Remember to budget for maintenance and repairs, taxes, and household utilities. Are you financially stable enough in your employment that you know you will have the money in 5-, 10-, or 20-years’ time?
The bottom line is that only YOU can truly determine when the right time is to purchase real estate, but you need the help of professionals in the field to understand the various factors. Reach out to your bank and a real estate agent today to help you determine whether this is the right time for you to find your dream home. The bank can determine your budget and the agent can work within that budget to make your dream a reality. Contact us today at Blackwell Group to find out how we can work together to find the perfect place for the best price!