If there’s one expression you’ll often hear from any investment professional, it’s that “you can’t time the market.” It’s true with the stock market, and it’s especially true with the real estate market. You’ll never act if you wait to buy until prices hit rock bottom. There may never be a “perfect” time to buy. However, it is an excellent time because housing prices are down all over the country.
We’ve just come off two years of an unprecedented housing boom that seemed like it would never end. Every time we thought, “prices can’t possibly go any higher,” the market shot up again. There didn’t seem to be a ceiling on it.
However, since March, the market has been through a correction. Real estate sales have slowed as the Bank of Canada began increasing interest rates. Prices have dropped steadily every month from April to July.
A Snapshot of Guelph’s Real Estate Market
As a university town, Guelph is relatively insulated from the drastic ups and downs other areas can face. Still, there will always be some fluctuation. During the pandemic, housing values soared here like everywhere else. At one point, the average price of a house soared to $1,149,194 for a detached home. Condo prices went up to an average of $670,548 by the time the market peaked. Even at those prices, each property got snapped up after spending only an average of 10 days on the market.
Several interest hikes have worked to cool the market and bring the situation back to normal conditions. What does the Guelph market look like now?
According to the Canadian Real Estate Association (CREA), housing prices slipped below 2021 levels for the first time in August, falling to $883,900. The benchmark price for a condo is also down, coming in at a much more reasonable $548,000.
If you already know you’re ready to buy, the next question is, “How?” Here are some articles that can help:
- How A Guelph Real Estate Team Can Help With Your Investments
- How Downsizers In Guelph Can Capitalize On A Changing Market
- Will A Shifting Market Help Millenial Buyers?
Fortune Favours the Bold
Part of the reason for the market slowdown is that both buyers and sellers are playing a game of “wait and see.” No one wants to sell when the market is down. As a result, homeowners are waiting until housing values rebound.
Buyers are also holding off to see what happens. Will prices drop even more? The most recent interest rate hike may cool the market even further. On the other hand, we may have reached the end of the slowdown, and conditions could now stabilize. Autumn is traditionally much busier for the real estate market than the summer, so we could see housing sales pick up again.
No one can predict what will happen or where prices will go in the short term. However, over the long term, the trend is always up. Even if housing prices go down next month, they will increase at some point. They always do over time.
For buyers and investors, the time to act is now! Here are just a few of your options:
Buy a Condo to Rent
There is something strange happening in the rental market. We know that prices are down if you want to buy a house. That’s understandable, given everything that is happening in the world.
Oddly enough, however, the costs of renting have increased.
Whatever the reason for this, it’s a massive opportunity for anyone in a position to buy.
Every year, thousands of students come to the city to attend Guelph University. Some will stay in residence, especially in their first year. However, many are looking to rent where they can be close to the school.
A townhouse or multi-bedroom condo reduces the cost of rent per person because students can share with roommates.
For you, the investor, it’s a win-win. You’re helping students find affordable housing off campus, but you end up earning more money by renting to more people.
That’s not even considering the growth in your net worth as the property increases in value! Plus, you now have a valuable asset that you can sell later at a profit or keep for personal use.
Investing in real estate can be a dream when everything falls into place! Here are some ideas to make it happen:
- Questions To Ask Potential Property Management Firms
- Buying An Older Home? Here’s What To Watch Out For
Buy to Downsize
If you’ve thought about downsizing to a smaller place, the recent slowdown actually puts you at an advantage. The hardest thing about buying when interest rates rise is qualifying for financing. Even at lower prices, the rates increase your borrowing costs. However, if you already have equity, the higher interest rates don’t affect you as much, especially when moving to a smaller, less expensive property.
Perhaps the most significant advantage of buying now is less competition. Just think – a few short months ago, you would have been caught up in multiple offer scenarios and intense bidding wars. Even when offering far above the asking price, another buyer would often outbid you.
Now, homes tend to stay on the market longer, for an average of 20 days. This gives you the opportunity to shop for the perfect home – without the pressure of competition from other buyers.
We have been helping real estate investors in Guelph for years. Whether you’re looking for your first property or your twentieth, we have a proven process to help you succeed. Find out more right here.
