Buying a home when prices of homes are decreasing is scary but here is how to make sure you’re making a smart investment in your future property.
Real estate prices are returning to the pricing we saw this time last year as interest rates rise and qualifications for mortgages change. If you’re in the market to buy a home, you’re probably worried about making a bad buy or overpaying.
How long do you intend to own the property?
Every down in Canadian real estate has an up. There is not a point in history where the real estate market in Quinte West and Prince Edward County did not recover from a decrease in average sales prices. If you are buying a home to flip or do not intend to own the house you buy for very long, short-term market trends have a bigger impact on your investment. However, if you’re the average homebuyer who intends to live in the new home you buy for at least five years, the likelihood of losing value in your property is low. Houses for sale in the Quinte West and Prince Edward County markets are sitting on the market a little bit longer and are currently often selling with flexibility in the final sales price and conditions to protect you as a buyer. This gives you the opportunity to do your due diligence and negotiate a great price.
Is this an investment or your personal residence?
Rental rates in the Quinte area are at an all-time high due to the incredibly low inventory of rental units and the cost for new investors to finance their purchases. It’s a case of supply, demand, and inflation that is greatly impacting the availability and affordability of housing. Despite increasing interest rates, there are many opportunities to own a home with monthly payments lower than the current rental rates, especially if you are buying a home to live in with more readily available and flexible financing options.
Compare the cost of your monthly mortgage payments with the cost of local rental units and see where you line up and remember that you are paying into your future equity as opposed to your landlord’s.
Is the housing market likely to recover?
The projected population growth for the province of Ontario as a whole and the Quinte West and Prince Edward County local areas far exceeds the housing creation and development plans for the area. This means that we are very likely to face another supply and demand issue in the future. There’s a very good chance that will propel our market back into a sellers market in the future, as opposed to the more balanced real estate market we are experiencing right now.
If you are looking to buy a home for sale in the Quine area, consider your long term plan, the long term projections for population growth and the future of interest rates. While interest rates are higher than they were last year, they are still historically low. Property values in Ontario have never stayed down for long and due to the growth projections for the province, there is no reason to assume that the real estate market will not recover from this decrease.
Homebuyers are in a unique position of opportunity to negotiate, get full inspections, protect themselves with conditions, and take advantage of a slowing market. If you plan to buy a home to own for five or more years, you’re likely to make a great investment by buying a home this year.