When is it the right time to buy a home?
Spoiler Alert…the right time to buy a home is when you need a home. If your goal is to purchase a property you plan to live in (or hold on to) for the foreseeable future, then there are a few questions you need to ask yourself.
Does it meet my current needs? Can I see myself here in 3 years? 5 Years? What about 10 years?
If the property were to go down in value by 10% over the next 2 years how would I feel about that? How would I react?
What are my non-negotiables with buying a property right now? What can I live without? Have I sought feedback on this property from a real estate professional and from the people who know me best?
Real estate is a long-term investment and one that is not without its risks. Market, economic and geographic conditions can easily shift, not to mention that the asset itself (the property) can be subject to physical risks like damage and deficiencies, so being prepared to invest for the long run is the smartest strategy. Yes, we all know someone (or maybe we are someone) who has a great story about flipping a pre-sale for sweet coin or making a mint on a property they held for only a short period time, but these should be considered the exception as they are experiences from the rear view. If your looking to leverage real estate as a vehicle for short term gain, then you could very well end up getting burned.
You may have heard of the strategy of timing the market. For example, real estate sales tend to plateau every year in the winter so there could be an opportunity for a bargain. But the risk in this is that there also tends to be low supply at this time of year so you could end up having limited selection. So, while there may be less competition you could be compromising in other ways. Keep in mind as well that seasons don’t function the same in BC as they do across Canada and weather can have a huge impact on purchasing behaviour. 2019 saw an extremely mild December and I don’t think it’s a surprise or coincidence that the real estate market had a very strong finish to the year.
An important question to ask yourself is, “am I buying from a place of emotion or logic?” If the answer is the former, then you could be in trouble. Take it from my own experience where I bought a property against the better advice of my Realtor. My emotional blind spot? The incredible valley views. What I didn’t consider was the end-of-life wood shingle roof that needed to be replaced, or the Olympic-worthy ski-jump of a driveway – both factors that made the property extremely difficult to re-sell.
If you’re interested in the real estate market it’s a good idea to keep informed, and in addition to working with a Realtor there are many free online resources to choose from. The local real estate boards also update monthly statistics for you to review (links below):
http://www.fvreb.bc.ca/stats/
https://www.rebgv.org/market-watch/monthly-market-report/december-2019.html
My take? If you’re a seasoned investor then pouring over real estate statistics and trying to time the market may hold some benefits, but for the average buyer IMO it’s best to avoid any sort of speculation or timing of the market. If you’re looking for your ‘forever home’ (or even your ‘for now’ home) then making sure the property meets your needs is the most crucial factor.
Questions? Let’s talk.