Whenever there’s a shift in the market, it can create a lot of hesitation and uncertainty. The recent slowdown in real estate has both buyers and sellers feeling nervous. Homeowners are often reluctant to list out of fear that housing values will shoot up after they sell. And many buyers are on the fence for the opposite reason. They’re waiting and hoping prices will drop even more. While facing an uncertain economic future, it can be frightening to make a change, especially one as significant as moving!
Despite market conditions, the timing is perfect for one group of people to take action. If you’ve been dreaming of some extra living space, here are a few reasons why the current market is actually in your favour.
Your Equity Insulates You From Market Changes
While the headlines can talk about nothing except rising interest rates and inflation, current homeowners are insulated from much of their effects. The longer you have owned your home, the more equity you have, which provides significant purchasing power to take your next step.
And even though housing prices have dropped steadily over the last few months, they remain higher than they were at the same time in 2021. What does this mean?
If you bought your house as early as 12 months ago, it has increased in value. If you got into the market three or more years ago, you’re sitting on a goldmine of increased equity.
Higher interest rates won’t affect you as much as other people. Why? Because the proceeds from selling your current home will go towards your new purchase, and you’ll need to borrow less.
A stress-free upgrade depends on the successful sale of your current home and your knowledge of the market. Here are some resources to help:
- Is Toronto Really In A Buyer’s Market?
- What Buyers In Toronto Want Right Now
- Everything You Need To Know About Selling Your First Home
You’ll Face Less Competition
The hardest thing about trying to buy a home in the last two years was the fierce competition you’d face from other buyers. Multiple offer scenarios were almost a given, and all-out bidding wars happened more often than not. However, the frantic seller’s market we were in has done a complete 180.
More listings are available, giving you the luxury of taking your time to consider your options and choose your new home carefully. More people selling means another added benefit:
Prices have dropped. If you were looking to buy a home in March, the average price peaked at nearly $1.3 million, and even more if you wanted a detached house. Now, the average price has fallen to $1,074,724.
More options and lower prices? How does it get even better? There is no guarantee, but if you sell now, prices could fall even further by the time you’re ready to buy. In that case, you’ll get a lot more home for less money.
You Have Negotiation Power
Back in the winter, a seller wouldn’t have even looked at you if you placed a conditional offer. If you wanted any hope of succeeding in a bidding war, you had to go all out to make your offer compelling. It left you vulnerable to overpaying for a home that might have a host of unforeseen problems.
Now is an excellent time to buy because you can include a home inspection condition before committing to the purchase. You can get out of the contract without penalty if the home doesn’t pass.
The ability to place conditional offers may be the greatest advantage to buying now, but it’s not the only one. As the market slows down, you’ll find sellers are much more open to negotiating with you. You may be able to get a better price or a more flexible closing date.
Location is everything! Where should you buy your next home? A few of our community guides might help you decide:
- 5 Up & Coming Neighbourhoods In Toronto
- 5 Reasons To Love Living In Humber Valley
- Your Quick Guide To Life In Mimico
Upgrading in a Shifting Market is Less Risky
You might think that moving during a market slowdown is a risky endeavour. But as a current homeowner, it’s actually safer. Although it was far easier to sell your home a few months ago, buying a new home on time for your closing date was very stressful and challenging.
Many people bit the bullet and bought a home before they even listed their house for sale, rather than risk having to live with relatives once their house sold.
During that time, you’d have the financial strain of carrying two mortgages and the risk of defaulting on one or both houses.
A balanced market means you can sell first, which is the safest option financially. You know exactly how much you can afford to pay for your new home.
Real Estate is Always a Good Investment
You almost can’t go wrong with investing in real estate. Prices are down at the moment, but that is likely a temporary situation. Looking back at the history of housing prices, you’ll see that values always increase. Buying now during a shifting market allows you to upgrade to a home your family will love and build your equity faster once prices start to bounce back, as they most certainly will.
Are you ready to move up to your next home and are curious about what’s available? You can find our featured listings right here.