By far the most popular post I’ve written in 2016 was my “3 Predictions for the Mississauga Real Estate Market in 2016”. Almost every day I have someone reach out to me and ask “is now the right time to buy?”.
And it’s totally understandable. For someone that doesn’t deal with real estate every day it’s difficult to cut through all of the media speculation (not to mention every so-called expert homeowner you talk to) and get a genuine, truthful answer to that question. All anyone wants to know is if they’re making the right decision on something that is incredibly important.
Should I Buy Now or Next Year?
This is the most common variation of the question and it comes with the same introductory response:
I know people really hate that answer, but it’s true. Everyone’s situation is entirely different and I can’t possibly answer the question the same way for everyone. Do you have a large enough downpayment? Do you have steady employment in a stable field? Do you have children that are in school full-time? Are you planning to purchase a house that stretches your budget to its limit based on today’s ultra-low interest rates? These are all questions that will determine if now is the right time to buy and they will differ for everyone.
What’s most important in my mind is the stability of your employment and ability to put together a sizeable downpayment (including the sale of your own home). As long as these two factors combine to allow you to comfortably afford your home taking into consideration a possible rise in the interest rate then I don’t believe you need to wait to purchase a home.
At that point if you’re wanting to make the move because your family is growing, you’re considering moving for work or just planning to move cities/neighbourhoods for lifestyle purposes then there should be nothing stopping you.
But What if the Market Crashes?
The last time we saw this happen was in the early 90s and people who had a plan, didn’t stretch their budget and had stable employment came out unscathed for the most part. Those who carried on are now seeing the fruits of their planning nearly 4x over in the way of home value/equity.
The point is it’s impossible to plan for the unforeseen but you can withstand any fluctuations with proper planning and budgeting. Since the early 90s we’ve heard of this fabled market crash far too many times to count, but that hasn’t stopped everyone from speculating on it.
Remember, what’s going to sell the most papers/generate the most clicks…bad news always does.
I Can’t Afford These Crazy Prices
Until a major announcement happens regarding interest rates, supply is going to be constrained and demand will continue to exceed it. And with the state of the world economy right now, there’s really no end in sight to today’s historically-low interest rates. This is likely to be our reality as the GTA continues to mature.
So if you’re looking for that large, detached home with all the bells and whistles and the big backyard for a reasonable price then you will likely have to move out of the GTA entirely. But, you have to account for the extra travel time/costs and the strain that comes with commuting for several hours a day. If you work in downtown Toronto that can definitely add up.
If you want to stay in the GTA then as consumers we’re going to have to really change our expectations. We’re going to have to become handier and take on homes that possibly need a good amount of work. We need to work hard at being a homeowner and we need to stop worrying so much about who has the better floors or kitchen or bigger lot.
We need to return to a time where you had a home as place for your family to live and the pride of ownership came from simply having your own home.
I don’t mean that as a criticism but as someone that works in real estate every day it’s plain to see that the modern homeowner certainly has a richer taste than previous generations. That is seen through the types of homes and finishes that come in new developments that routinely start WELL above what used to be considered starter-home material.
So What Should I Do?
Get out there and start looking. Get off your computer. See for yourself, in person, what is happening in the market. Take action and decide one way or the other what would be best for you. Once you have the information for yourself then trust yourself to make the right call.
Also, rest assured that there is a home out there for you. It might seem crazy now but if you’re determined and take the right steps then you can definitely make your decision to purchase a reality. It’s just going to take a little more preparation than it might have in the past.