The news is filled with headlines about the state of today’s housing market south of the border—"Foreclosure sales are up.” “Real estate prices are down.” “Borrowers are defaulting on sub-prime loans.” It’s easy to be confused and uncertain about whether now is a good time to buy a home.
Although the Canadian market is not as robust as it was a year ago, housing prices have been stable for several months, mortgage rates have dropped this year and there is overwhelming choice of homes currently available in all price ranges. All these factors add up to an ideal market place for first time or move up home buyers.
The turbulence we’re seeing in the housing market is not all problematic. For some, it has opened up new opportunities. If you have good credit and your finances are solid, you may be able to benefit from today’s housing market.
As a first-time home buyer the current market offers you many advantages, such as:
1. Lower interest rates
Today’s long-term fixed mortgage rates are relatively low. The Bank of Canada had dropped the key interest rate a couple of times in the last few months. Today’s historically low interest rates mean you’ll benefit from increased buying power if you’re shopping for a home.
2. More negotiating power
In the hot real estate market of a few years ago prospective home buyers often found themselves in a bidding war when making an offer on a home. Today’s cooler market means buyers have more bargaining power. More sellers are now willing sell at less than list price or offer other incentives.
3. Wider selection of properties
Today’s larger inventory of homes for sale means more properties to choose from. It also means home buyers can afford to be more discriminating and take the time to find a home with all of the features that they are looking for.
4. Sales incentives
Many new home builders are beginning to offer incentives to lure buyers. In some cases, they’re offering price discounts or complimentary extras such as granite kitchen countertops or upscale appliances. Some private home sellers are also throwing in a variety of incentives such as paid closing costs or free home inspections.
Historically, the housing market has been cyclical. Every period of sustained price increases has been followed by a period of declining values. It’s therefore not surprising that after the boom of the last few years, we’re currently experiencing a housing market correction. In most parts of the country, the days of being able to profit from buying and selling a property quickly may be over, at least for a while. But owning a home and building equity in real estate is likely to remain a sound long-term investment.
The fundamentals of the Canadian economy and today’s buyers market suggest that now is an excellent time for prospective buyers to explore opportunities to buy a new home. Consult with your agent, do some research, and buy, buy, buy!
For more information on the Canadian market contact Alexandra at Alexandra@theOREC.com or call 250.870.2792.