When to buy (or when to sell) a house is nearly always the first question someone will ask when they are thinking of a move. Whether searching for your primary residence or your next investment property, the issue of timing tends to be at the top of your mind.
However, the market is unpredictable, and even the most educated, experienced, and well-informed expert cannot say when prices will peak or bottom out. If you canโt rely on timing, what should you base your decisions on?
In this post, weโll explore the finer nuances of when to buy your next home.
Searching for the right home in Guelph or the Tri-Cities? Start here by browsing our featured listings.
Smart Decisions Arenโt Based on Luck
Saying, โletโs wait until the market hits bottom to buy a houseโ follows a similar logic as playing the lottery; it relies entirely on luck! Yes, thereโs a slight chance you could win, but it is not a great strategy since the odds are so stacked against you.
If you had a time travel machine, things would be different. You could hop in, take a quick trip back to last week, and choose all the right numbers.
In real estate, everyone prefers to buy when prices are at an all-time low. There is just one problem with this โwait and seeโ strategy:
How do you know when weโve reached the bottom of the market? The only indication is that prices have started to rise once again. This reactive approach means you will always miss the bottom!
Imagine a buyer in February and March holds off on placing an offer. The market is traditionally slow at this time, but housing prices could still go lower, right? Possibly. Or perhaps, those same buyers will be kicking themselves for not acting sooner. When relying on timing alone, you just donโt know.
โWhenโ isnโt the only question when buying a house. You also need to figure out โwhere.โ The posts below might make the case for Guelph and the surrounding areas:
- Is Guelph, Ontario, a Good Place to Live?
- 5 Reasons to Make Guelph Your Next Home
- What Are the Best Guelph Neighbourhoods for Families?
The Best Real Estate Advice Is Often Contrarian
Forbes once published an article titled โ17 Counterintuitive Things Most Successful People Do.โ Right off the bat, it states, โYouโre always going to get the same results, doing what everyone else does. Sometimes you have to know when to zig where others zag.โ
This sums up the real estate experience perfectly. If buyers are lining up in April and jumping in with no conditions because theyโre competing with 12 other buyers, that might be the time to step back.
Now, letโs fast forward to a hypothetical slow market, where buyers are put off by all kinds of frightening stories in the news. Inventory has tripled and bidding wars are nowhere to be seen. You might think this is when buyers would be thrilled to begin their search – but most donโt.
Many house hunters plant themselves firmly on the fence and follow the crowd in waiting for prices to drop even further – or for conditions to improve.
If you make informed decisions based on real data and backed by experience and knowledge, their hesitation could become your opportunity. (If you didnโt time the market well and paid more than necessary, donโt lose sleep. Historically, over any 10-year period in Ontario, real estate has always risen in value, making it a solid long-term investment.)
A History of Accurate Data Should Inform Your Choices
Not one of us has a crystal ball to tell us what to do or when. However, we have the next best thing: access to yearsโ worth of data showing the slow but steady rise of real estate prices over time. Itโs not an exact science, but there is a real ebb and flow to the market.
Plus, what happens in Toronto will tend to ripple down to Guelph and the Tri Cities a few months later. By keeping your eye on the numbers, you can get into the market at an excellent time, even if it isnโt at the very bottom of the cycle.
At any point, there could be a buying mania, followed by a sharp drop in transactions and a big upward spike in listings, with a moderate cool-down in prices as a result. Does that mean itโs time for you to act?
From Generalties to Specifics: What to Do in Your Situation
Your decision should be grounded in fact-based data and a careful assessment of your resources and risk tolerance. Your answers to the following questions will help you know what to do next:
- Do you have access to sufficient funds for a down payment and closing costs?
- Have you obtained a mortgage pre-approval so you know how much you can borrow?
- Will you be able to cover the monthly costs of your house in addition to your other expenses?
- If selling an existing home, have you had a free evaluation to determine what it is likely to earn in todayโs market?
- Perhaps most importantly, are you planning to stay in your home for the next five years or more?
If youโre in the market for the long haul, buying a house could be the best decision you ever make, regardless of current conditions. Just think of how much you are paying in rent each month!
When you own your home, you build equity every time you make a mortgage payment. When real estate values rise, as they inevitably will, your financial power will grow even more.
What are your next steps if youโre ready to buy? The posts below will help you plan your home purchase:
- Checklist for Buying a Home
- Conditions & Clauses to Avoid Putting in Your Home Offer
- 10 Things To Consider When Buying a Home
Expert Advice Is Your Advantage
Whether you plan to buy now or a year from now, an experienced expert can guide you through the entire process and negotiate on your behalf. A local real estate agent can often provide access to private or off-market listings, expanding your options even further.
If youโre ready to zag while everyone else zigs, our top Guelph real estate agents are happy to help you secure a home you love at the best price and terms. Reach out to info@gowylde.ca or call 519-826-7109 for more information.
