Is It A Good Time To Buy A House Right Now? on February 15, 2021 When people are browsing the real estate market, they might hear that it’s a buyer’s market or a seller’s market, among many other complicated terms they probably haven’t heard of before. Is it a good time to buy a house? This question is probably the number one question that real estate agents hear from prospective homebuyers. No one wants to make a home purchase when the real estate market is doing terribly. The same thing goes with mortgage rates. If the current mortgage rates you’ve been offered aren’t appealing, then that could play a role in your decision to purchase a home. Mortgage Assist has a team of dedicated mortgage agents that are there to answer all of your questions, including the best time to buy a house in Toronto or wherever else you’re looking into. They can also fill you in on the mortgage assist program. Many people think that if they have a bad credit score, they’ll never be able to even be considered for a mortgage. Sometimes it’s nearly impossible to predict what will happen in the real estate market, and that’s more evident than ever before since the start of COVID-19. Many people have dealt with the crushing blow of job loss and faced the added stress of not knowing if they’ll even be able to pay their bills. It’s no surprise why people might be asking when is a good time to buy a house. Even though some people were able to successfully purchase a home amidst the pandemic, other people have lost out on purchases. Others have also had to put their homes up for sale just to make ends meet. As a result of everything going on, it’s good to take a step back and look at the current real estate market to really get a firm grasp of what’s going on. Is Now A Good Time To Buy A House? Sometimes the people tend to blame millennials for certain trends in real estate. As of the past year, some market analysis was done and said that millennials might be the ones to blame for homes becoming so outrageously priced. According to a real estate report conducted by RBC, the rate at which millennials were purchasing homes throughout Canada was more than in other countries in the world. In the spring of 2019, as much as 40% of the properties in Canada had owners in them that were around 35 years old or even younger than that. In the U.S., the average age was around 34. A couple of the cities in Canada that had that youngest average age of homeownership were in Vancouver, Toronto, and Calgary. All of this is happening even though the prices of homes are skyrocketing. Did this real estate boom continue throughout the entire pandemic? It might not have. Scotiabank conducted a survey that found that around 38% of all of the Canadians that were involved in the survey said that it’s still an ideal time to purchase a home. 18% said that were aged 18-34 said that COVID-19 increased the speed at which they wanted to purchase a home. Around a third of people said they wanted to wait a bit for the purchase prices to reduce before they decide to make a leap to homeownership. Has The Pandemic Had An Effect On The Current Real Estate Industry In Canada? Even though the pandemic created such negative circumstances throughout the country and the entire world, real estate still kept moving forward. Greater Vancouver, Greater Toronto, and Montreal even had a few records being broken in real estate. Many people experienced job loss and were worried about being able to pay off bills, and others used this time to do home renovations or buy properties. Some people used the time they had off to make home purchases in the suburbs because of being able to work from home. Others decided to take advantage of the mortgage rates. What Records Were Recorded Over The Past Year? COVID-19 caused a lot of confusion in the real estate market. No one would’ve expected the market to even break records when people were having many issues in even being able to work. Montreal A lot of people living right in the city of Montreal decided to get rid of their homes and flee to cottage areas. July and August saw a massive increase in property sales. What this means is that the demand for houses is higher than what’s listed on the market. In August alone, home sales went up by 39%. If you compare that with the previous year, it was much higher. Not only that, but it was also the highest number in the last two decades for the month of August. The overall price of homes also jumped up nearly 25%. The average price of a single-family home was around $427,500. Even the homes that were worth $1,000,000 were going up by double in comparison to the previous year. Greater Toronto Montreal wasn’t the only city to see real estate records being shattered. Toronto saw its fair share of pandemic-related issues for office employees and those in the real estate industry. The Toronto Regional Real Estate Board did a report and saw that housing sales increased more in the previous four months before the pandemic began. $968,000 is the average price of a home in the Greater Toronto Area, and that’s up nearly 14% from the previous year. Single-family homes are in high demand, and that means bidding wars have also increased. A lot of people looking at purchasing homes for the first time are being outbid because people know how crazy the current real estate market is. Single-family homes aren’t the only ones breaking records. Condos also have to be included in this too but in a not so positive way. Lots of people have seen their condos sit vacant much longer than they’d like. There have been a lot fewer people willing to rent condos because they haven’t been able to go to schools and haven’t been able to travel. The decrease in condo sales was recorded to be around 8.5%. Greater Vancouver If you compare September of 2020 to September of 2019 in Vancouver, over 1,300 more homes were sold in 2020. The average price of a home in Vancouver sits at around $1,045,110. This is up 6% from October of 2019. Even the Fraser Valley saw real estate sales growing to the point where they were recorded to be the second-highest that they’ve been able to reach in a whole decade. This is a 26% increase even though the supply of single-family homes is not very high. What About The Condo Market In Greater Vancouver? The condo market in Greater Vancouver is a little different than the Greater Toronto Area. Greater Vancouver had an increase of 37% in condos being sold. This number was recorded in September, and as a result of the demand being high for condos, the prices have also reflected that and stayed high, as well. The average price you’ll be looking at for a condo in Vancouver currently sits at around $684,000. On the flip side, if you own rental housing in Greater Vancouver, you’ve probably had to lower the prices of the rent a bit because students haven’t been able to attend school. The amount of immigration has also lowered and tenants have dealt with job loss. If you compare August of 2020 to August of 2019, the price of rent decreased by around 9%. Top Things You Should Know Before Purchasing A House In The Current Real Estate Market No one has to tell you that a home purchase is the largest purchase that one usually ever has to make. If it’s your first time diving into the real estate market, it can be very stressful, but don’t run away from it all just yet. Purchasing a home is something that you should pat yourself on the back for. Before you go and make an offer on the first home you see, there are a few factors you need to keep in mind. Current Mortgage Rates Are Low A lot of people are jumping into home purchases because the interest rates are at an all-time low. Due to the pandemic, there has been a lot of surprises in many different industries that some thought would never happen in their lives. To keep the economy going, low-interest rates were offered so that people would be more prone to applying for mortgages. The Bank of Canada says these low-interest rates might even stick around for a couple of years. For first-time homebuyers, this can be advantageous for a number of reasons: You’ll save more on monthly payments. If you’re refinancing your mortgage, you’ll see positive changes. You won’t have to deal with as much debt when all is said and done. You’ll be able to afford more of a mortgage than you would otherwise. Mortgage lenders will feel more comfortable in lending you more money. One thing to keep in mind is that a fixed-rate mortgage typically won’t reap these same benefits that an adjustable-rate mortgage will. Keep A Keen Eye On The Real Estate Market For those that are actively wanting to purchase a house, you’ll want to learn as much as you can about it so you make a well-informed decision when it comes time to purchasing. Find a real estate agent who doesn’t mind answering all of your questions and guiding you in the right direction. An experienced real estate agent will be able to recommend ideal areas that have the best pricing, among other things. Purchasing a property is a decision you want to feel as comfortable as possible with. For those seeking out investment real estate opportunities, a real estate agent can guide you in areas where the rental market is currently strong. Certain neighborhoods have higher market value than others. If you’re well-researched on the real estate market, you’ll evidently end up with a better deal than you would if you didn’t bother looking into anything. Get Ready To Deal With Bidding Wars Dealing with bidding wars can become a nuisance when you’re a first-time homebuyer. For those that have been in the real estate industry for years, you’re probably used to it by now. Bidding wars can be frustrating for people that didn’t get up getting a home they’ve had their eyes on for a while. This trend has been becoming a much-hated one for quite a while, and it’s mostly due to the supply of houses in certain areas and the number of buyers that are looking for homes. Real estate agents and sellers take advantage of that and use bidding wards as a way to increase the pricing on houses. No one likes when a home goes to a bidding war because the price of the home is artificially increased. If a home you have your eye on and you make an offer on does end up going to a bidding war, ensure that you know exactly how much you’re willing to spend on it before accidentally getting caught up in the heat of the moment and increasing your offer to an amount you can’t afford. Sometimes you might even have to reduce the number of conditions on the initial offer so that it’ll be more attractive than some of the other offers on the table. Before Looking At Homes, Make Sure You Have A Stable Income Due to the pandemic, a lot of people have dealt with salary cuts or job loss. If this has happened to you, you might want to reconsider looking for a home because of the risks involved. If you go to apply for a mortgage, most lenders will wonder if you’re going to be able to make the monthly payments without having a job. In addition to the price of the mortgage, you also have to keep the down payment and closing costs in mind. If you aren’t aware of these extra fees, you might have to take out another loan in addition to the mortgage itself just to make ends meet. With a salary cut, all of these things can create financial stress that you might not be fully comfortable with taking on at the current time. Visit Various Mortgage Lenders Until You Find Just The Right Mortgage Terms There’s no harm in doing your research and finding a mortgage lender that will negotiate terms that’ll fit right into your financial situation. Doing some research on the internet is a good way to get started in familiarizing yourself with everything. The pandemic has surged the way things are done, which is mostly now digital. If you’ve never had to look into a mortgage before, figuring everything out by yourself can be a tricky task. With all of the different terms and complicated factors involved, it’s best to just bring your questions to a mortgage broker right off the hop. It’s their job to take the details of your situation into account and align you with a mortgage on terms that work best for you. Those new to the real estate industry might think that it’s the agent’s job to find you a mortgage, but real estate agents are only versed in being able to find you a house that’ll work for you. After that, it’s the mortgage broker’s job to connect the rest of the financial puzzle into place. Are Your Goals For A Home Short-Term Or Long-Term? Not everyone has the same reason for why they want to purchase a home. Some people want to purchase a home they’ll be living in for the rest of their lives, while others just plan to stay there for a few years before moving somewhere else around the world. Some decide to purchase a home with plans of having kids and upgrading, and these are all things to take into consideration when you’re browsing around the real estate market. If you’re wanting to purchase an investment property over the short-term, there are some signs to keep an eye on: If you already have a home and a good enough stream of income flowing in that you can afford a second down payment. A good credit score will be part of this equation, as well. You’re offered attractive interest and mortgage rates by the lender. You might not have the money saved for a second down payment, but there’s equity built up in your current home that you have access to. You know the current real estate market conditions enough to realize the differences between a seller’s market and a buyer’s market. Bidding wars don’t happen as much if there are more homes available than there are buyers. You’ve found a property that’s in a great area for renting. There are also some signs to be aware of for when it’s an ideal time to purchase a long-term home: You have a decent chunk of money saved up that will cover both the closing costs and the down payment on a home. You don’t have a problem putting your current home up for sale. You have a positive credit report. The current interest rates are attractive. You’re ready for a long-term commitment to home and have all of the finances to do so. You’re aware of the current real estate conditions and your home will increase in value as years progress. You’ve conducted all of the necessary research involved, found a great area to purchase, keep track of comparables in the area, and the real estate market is going smoothly. When To Buy A House Is it a good time to buy a house in Ontario? This question has probably brisked across your mind numerous times if you think you might be ready to purchase a house. Knowing when to buy a house will always have a couple of different factors involved. Is this the first home you’re purchasing? Are you downsizing from a previous home? Are you aware of the home prices in the area? Are your finances stable and predictable in the future? Do you know the real estate market or have you spoken to a real estate agent about it? Are you aware if it’s a buyer’s or seller’s market? COVID-19 has had an impact on everyone in some way, shape, or form. A lot of people that have wanted to sell their homes have held onto them because of it, but others have been actively involved in the real estate market amidst the whole thing. Because of that, many cities in Canada have undergone these strange real estate records that not many people initially foresaw happening. A lot of cities haven’t undergone sales much like it in many years. The interest rates have reached lows that no one ever saw happening. If you think you’re financially stable enough to start looking into the market and eventually purchasing your home, you’ll need to keep all of the discussed factors in mind. Just be prepared to deal with some frustrating bidding wars when it does come time for you to put that offer in on your dream home. If you do run into bidding wars, sometimes it’s good to not keep the expectations or hopes too high into one home. When people are looking around for homes, they sometimes find one that they can truly see themselves being in for the rest of their lives. When it comes time to make the offer, there could potentially be 7 or 8 other offers on the table in front of your offer already. If the other offers are $40,000 higher than your offer, you have to think to yourself if you can really afford to spend that much more money on the home. If you can’t, something like this can shatter your hopes.