Is now a good time to buy real estate?
This is a question that I have been hearing almost on a daily basis. With the negative media, skewed statistical reports and high prices, buyers have been pumping the brakes thinking that it is not a good time to buy real estate in Vancouver. Personally I think this is one of the best opportunities that we have seen in the past three years to buy a property.
The market generally slows down at this time of the year. November, December, and January are typically slower in terms of overall sales. People usually do not want to keep their homes clean for showings over the holidays and buyers are usually planning family holidays and Christmas parties rather than focusing on open houses and arranging financing.
With that being said, the sellers that have their homes listed are likely motivated. Maybe they have already bought something, or maybe their home has been on the market for a while and they are hoping to get it sold before the New Year. If we look at 2015 as an example, there were 2,837 homes sold in Greater Vancouver in December. If we compare this to April (Spring is supposed to be the best time to sell?) there were 4,179 homes sold. The market has dipped in the last few months, but it is not uncommon for this time of the year.
With new taxes, legislation and a changing US Government there is a high level of uncertainty in buyers right now. Buyers don’t want to be caught buying a home at the peak if prices may drop. What this has caused is a large number of buyers deciding to wait until the New Year, or wait until Spring to see how the market looks before they start house hunting. If Economics 101 has taught us anything, it’s that Supply and Demand control pricing. With less buyers in the market we are going to see sellers more willing to negotiate on prices.
For the past 2 years it has been such a severe sellers market that buyers were having to waive inspections, secure financing prior to accepted offers and most importantly compete with other buyers. This is a huge reason as to why prices were pushed up 20%+ year over year. But it all comes back to the fact that there were more buyers competing on fewer properties.
So now we are faced with a stand off. Buyers wanting to wait, sellers not wanting to drop their prices, and winter hitting. It is the perfect storm for a change in the real estate market. What this has led to is a much easier time to buy real estate in Vancouver.
Will prices drop a few more points? Possibly. But if we try to time the market exactly, we will be caught back in multiple offers and be forced to pay over asking price.
My suggestion is that if you find the right property for you and your family that you pull the trigger. Who knows what will happen in March 2017. Vancouver will remain a world destination, the city has a tight control over supply of new homes and everyone that is waiting to see what shakes out will eventually jump back into the market. If the right property doesn’t become available, don’t rush into something, but don’t stop looking just because the Spring might be a better time to buy. My prediction is that it will only be more competitive.