You’ve maybe heard this question, “when’s the best time to buy real estate?” And of course, you’ve heard the answer, “yesterday.”
It’s true – population will continue to grow (demand) and with the amount of land on earth remaining fixed (supply) prices will inevitably increase. A more familiar example would be a typical city growing without development keeping up. And in a normally growing city, property prices will increase decade after decade due to other inflationary pressures too. Ask your parents what they paid for their house or what their home was valued at 20 years ago.
Of course people aren’t only thinking of future value when buying a home, generally, they’re buying to better their quality of life. However, with that in mind, everyone making the greatest purchase of their life wants to get the best price, because saving money makes life better.
Most home buyers don’t know when the best time is to buy. How would they? Most peoples information and advice related to real estate is from friends, family, and people at work and 99 times out of 100 the information is distorted, out of date or incorrect. Rarely is anyone exhaustively analyzing the real estate market to stimulate conversation at the water cooler. You know who does scrutinize the local real estate market? The proficient and insightful Red Deer Realtor® Blake King.
When a real estate market isn’t doing well or hasn’t been doing well, most buyers hesitate to buy. They’re scared of making a bad decision with the notion prices may drop. Waiting, in theory, can be smart but how long should someone wait? When is the right time to buy?
“You’ll never know when the best time to buy is until after it’s happened. Like the stock market, we can’t see when the lowest price was until the prices are heading in the opposite direction. But we can use indicators within the current market to make an educated guess.”
Nailing down the most opportune time to buy real estate is difficult but there are factors to consider when making this decision. I track and post these stats each month at Red Deer and Central Alberta’s real estate news and information site HomeScope.com.
The same factors can be used across the board but also keep in mind, each real estate market is different. Below are the three factors I’m using to state now being the best time to buy real estate in the Red Deer and Central Ab.
Current inventory rate is maybe the #1 factor indicating whether it’s a good time to buy or sell. If an inventory rate is high sellers are faced with a lot of competition and forced to price very competitively to be one few homes selling each month. Very competitive pricing is great for buyers.
As I write this article there are 449 “single-family detached” homes currently for sale (listed) in Red Deer. This stat is of little relevance unless you also know only 67 homes are currently selling on average each month in that large group. 85% of sellers each month will wonder why their house hasn’t sold and they’ll have to either reduce their price improve their property to sell. The only other option is removing it from the market until selling conditions improve. Right now sellers should consider all offers very seriously.
The homes for sale inventory rate in Red Deer is currently 6.7 months. With so many homes available for sale and considerably few buyers to compete with, it is probably the best time to buy.
Interest rates are still currently super low with continuing talk of upcoming rate increases.
Your mortgage payment can increase substantially with only a 1% percent rate increase. A typical mortgage at the current interest rates will save you approx $200 per month compared to an interest rate 1% higher. That’s $12,000 over 5 years!
Interest rates being as low as they are now is reason alone to make now the best time to buy.
Economic conditions improving
The Alberta economy is turning around. Below are excerpts from the most recent Alberta Treasury Board economics and revenue forecasting report. See the full report by »clicking here«
The economy is doing better than it has for the last few years and in addition to the stats below oil prices are also higher than they’ve been since 2014. When consumer confidence increases we’ll see the two factors mentioned above – local inventory rates and interest rates – change. Inventory rates will correct themselves gradually and when they do prices will begin their increase. If prices and interest rates increase, buying a home will be more difficult for everyone.
Now is definitely the best time to buy a home in Red Deer and Central Alberta. Wait longer and you definitely risk paying more. There are numerous clues indicating prices will gradually increase with no reasons to think prices will decrease locally. If you’d like help using all current market and economic factors to get the best price now call me Blake King Realtor® with Century 21 Advantage in Red Deer, Alberta anytime or email firstname.lastname@example.org.