The definition of a buyers market is this: “A buyer’s market is a situation in which supply exceeds demand, giving purchasers an advantage over sellers in price negotiations.” While the local media tells us that out market is a balanced, as a Regina REALTOR® who trades heavily in our market; I would have to disagree. And I also offer a few reasons as to why right now is a great time to buy in this market.
- Inventory has been at an all-time high in the last 24 months. The sheer volume of listings allows buyers to view 5-20 newly listed homes or condos almost daily. The only drawback is that 75% of these are 5/10’s.
- Prices are the lowest they have been in almost a decade. There is a lot of opportunity to purchase a home and actually realize some appreciation when you may potentially considering moving again.
- Interest rates are slightly higher than they have been in the last 5 years; they are still quite low considering what they were in the early 2000’s. The government is testing all of us with their stress test. Truth is, people do feel the stress of knowing they can afford more but get their hands slapped for trying. The stress test is a good exercise in restraint and budgeting and in the event of an unthinkable rate hike; I think many Canadians will be happy still being able to afford their homes.
- People buying their first home are getting some great deals these days, but lets not forget people selling and buying in this market. There is a solid opportunity here to come ahead. It is true that they may not be getting as much for the home they are currently selling, what people fail to consider is that the sellers of the home they are looking at buying are in the same boat. What does this mean? Generally these people are buying up, so while they may be losing on the sale of their home; this home is usually 200K + less than the home they are buying so the loss is not as significant as the 500K house they are buying. Which means that when the market turns around as it always does, there is a greater return on that more expensive asset.
- Prices dropped over the last 2 years, and they dropped a lot! But they are coming back albeit much slower than they declined. On that topic; there isn’t a single event that contributed to this.
There was a perfect storm of overbuild, combined with the collapse of oil and slow down in our natural resource sectors. Add to that a slowdown in immigration and a government change and then drop a dollop of the mortgage stress test on top of that and we find ourselves here! In a market where people with motivation that see opportunities will capitalize on the lull.
Contrary to what some people may think. There are still some anomalies in the current market conditions. We have had plenty of bidding wars in the last 12 months here in Regina. This is mostly attributed to the quality of the inventory as I alluded to at the beginning of this blog. I could safely say that about 12-15% of the current active listings are premium listings that need to be acted on, more than waited on. If an actively listed home that fits a high number of the must haves on a buyers list and doesn’t require 30K+ to repair/update right of the bat, a buyer needs to get the home under contract and move on it. Because while there may be another listing coming down the pipe in a day or two, the one that works for you and is worth considering may be gone tomorrow!
If you have questions or would like me to blog about something in particular, please email me and of course always check back to read and pass along my blogs!