Why NOW is a Great Time to Buy
Tuesday Feb 20th, 2018
As you’ve probably been hearing, the GTA housing market has been sluggish for the past several months. Houses are getting listed and often sitting on the market for weeks, sometimes needing a price reduction. This is a scenario that we haven’t seen in the GTA for years. Up until nine months ago, GTA home buyers were being faced with rapidly increasing prices and massive competition for homes.
So, why am I telling my clients that now is a great time to buy? Especially if your goal is upsize your homes, consider the following:
1. Reduced Demand
Some buyers have backed away from the market. Firstly, many have been affected by the new mortgage rules and simply can’t afford what they want anymore. It will take these buyers some time to decide what to do next. Secondly, because of a little uncertainty in the market, with the introduction of the Foreign Buyers Tax last April, coupled with some pretty dramatic swings in market conditions, some buyers simply want to take a wait and see approach.
2. Increasing Inventory
As we move into the Spring market, we will start to see more and more homes listed. There are many sellers who are waiting to list, hoping for an uptick in demand once the cold weather breaks. There are also a number of sellers who were unable to sell last fall, removed their homes from the market, and are planning to re-list in the fall. A third scenario that has emerged is that deals are falling through. Because financing requirements have changed, there are number of houses that were previously sold firm, that are appearing back on the market as buyers financing falls apart. Sellers faced with longer “days on market” and issues around financing, tend to be forced to become a little more flexible on their price.
3. Smaller Price Differential Between Small and Large Homes
As I’ve said, because of the new mortgage rules, many buyers can no longer afford the size/type of home for which they had previously planned. Some are deciding to move into a lower price point. This may mean a semi-detached, a townhouse or a condo. While, we are still generally not seeing bidding wars in these house types, there is more demand in the smaller home type, particularly properties under $1M. This scenario creates relatively higher prices in the smaller category of homes. If you are in a position where you’d like to sell a smaller home type, to move into a bigger home, this can mean significant cost savings!
So, to sum it up, serious buyers have a real opportunity to shop around in an environment with decreased competition and more homes to choose for. And, it may not be such a stretch to move into that larger home. It is now rare to see multiple offer scenarios, and often sellers are needing to accept offers that are below ask price. This is a real change from a year ago where houses were selling consistently over ask, sometimes hundreds of thousands over! Of course, there is a variability in the market depending on where you are buying (suburbs are generally cooler then the city), and the home-type you are considering (the condo market has not slowed as much as the freehold market)
If you’ve been contemplating the timing of when to purchase, consider now! I’d be happy to discuss your needs over a coffee or on the phone, and help you determine the right decision for your family.