When is the best time to buy a home?
(I will keep this post up and revisit it one year to check it’s accuracy.)
Since the Alberta economy slowed due to low oil prices I’ve heard many people predict a major price dip or crash in our local real estate market. Make note, you should never take advice from these people. Their predictions, more often than not, are based on nothing relevant – they’re usually just repeating what another boob told them at work.
Have prices dipped, will prices dip more…?
We’ve seen prices sit flat essentially, but it’s due more to consumer caution than anything else. People aren’t uncertain where the market is heading and they’d prefer to wait and see.
Here is what’s happening.
The flat sales are due to too much “supply” and not enough “demand.”
We have a high real estate inventory count right now, but don’t worry it isn’t due to a mass sell-off of homes like you might think. It’s due to a lower number of buyers than normal (demand). Sellers are listing homes (supply) at a normal rate but inventory is piling up due to less than normal buying behaviour.
This article is about pricing and when the best time is to buy. In addition to it probably being the lowest real estate prices we will see, the current interest rates are super low. Combine current prices and the super low interest rates available and there might never be a better time to buy than now.
If every one of the homes listed had to be sold – ie. if everyone was leaving town – we would see a major price drop or “crash.” However, a very large portion of the homes listed will sell over the next few months and the other portion will come off the market and be sold some other time. Because of the high inventory we’ve witnessed flat prices.
I predict the average home price will hold steady until it starts rising again. I think we’ll see pricing remain flat through 2016 in Central Alberta.
So, when is the best time to buy? Right now. You can wait until you’re completely sure prices are at their lowest, but that number won’t be known until prices have increased (see chart below).
Also, one thing to remember is the fact that prices will continue to increase over the long term. So even if you buy a property before prices hit their low, the price you pay will likely just be a little higher than the low, and the price you pay will definitely be way lower than 5 or 10 years from now 😉 (see chart below).
When is the best time to buy?