The latest interest rate hike took the real estate world by surprise, the biggest jump since 1998. With the target rate now at 2.5%, many potential buyers are considering their purchases more carefully.
The good news is that prices are coming down, and more options are available than there have been for at least two years. You can look at multiple listings and decide what features you want your home to have.
The bad news is that rising interest rates make borrowing more expensive. Depending on your mortgage amount, the higher interest can offset any benefit of lower prices. Though real estate is still a solid investment, especially for the long term, many people are reconsidering what is most important in a home.
What should you look for when buying during a market shift?
A Motivated Seller Or Cosmetic Imperfections – Or Both
It took a while for homeowners to accept that they could no longer command the exorbitant prices that sellers could get back in February. Some listings have been on the market for far too long, and when that happens, prices tend to drop even more.
If you have the patience and know what to look for, you can sometimes find a house that is undervalued. It could be because the owner is motivated to sell or because the property has minor cosmetic flaws they don’t want to repair. Such imperfections could look like:
- Chipped paint or marked up walls. Tired paint may make a house look worn out, but is easily fixable at a very low cost. However, watch out for cracks in the walls as these could indicate a much bigger problem with the home.
- Outdated hardware or plumbing fixtures. A fancy new faucet might look appealing, but it is something you can do yourself or have someone do for you very inexpensively.
- Unappealing light fixtures or chandeliers. A trip to your local hardware store can have your house looking brand new in no time.
- Not superstitious? You might even consider buying a home with a stigma or a reputation for being haunted – as long as the house itself is structurally sound.
Speaking of hardware stores, check out our article about updating your home decor in a single visit.
Sometimes, you can save thousands of dollars because of issues that can be fixed by anyone with a ladder and a screwdriver.
An Up & Coming Or High-Value Neighbourhood
Winning in real estate is often more about the location than anything else. Talk to a local agent about what neighbourhood you should be looking in to get the best value. It could be a neighbourhood that may have once been considered “a bad part of town” but is now a thriving, upcoming community. Or it could be a highly desirable area that you know will hold its value even if prices plummet everywhere else.
In Etobicoke, you might want to consider the Queensway if you’re looking for a vibrant community where houses are still relatively affordable. If your budget allows it, homes in areas like Humber Valley and Princess Anne Margaret are very well maintained and always in high demand.
Want to know more about up & coming communities in Etobicoke in Toronto? Check out our neighbourhood comparison right here.
Consider The Resale Value
When house hunting during a shifting market, it’s more important than ever to consider the resale value if you don’t intend to stay for the long term. So perhaps that haunted house isn’t the best value after all!
In all seriousness, however, it’s easy to be tempted to pay more for features that can lose their value a year or two down the road.
For example, a swimming pool might be very tempting, especially if you’re walking through a home on a hot day. However, always consider the resale value before you make any commitment.
Features that tend to hold value include:
- A modern and well-laid-out kitchen
- Energy efficient appliances and HVAC system
- A finished basement
- A dedicated laundry room
- Outdoor decks and patios
- Updated bathrooms
Thinking of buying soon? These articles will give you some valuable insight:
- Is Toronto Really In A Buyer’s Market?
- Ready To Downsize? The Timing Just Got Better!
- Our Home Buying Process
Invest For The Long Term
The prices of homes in Etobicoke may be down at the moment, but they’re not going to stay that way for long. Real estate values have consistently increased over the long term, even during the crash of 2008.
Taking advantage of the lower prices now can be a solid investment if you can hold the property for several years.
Plan your purchase with your future in mind, and you won’t have to sell your home quickly because it no longer suits your needs. Before you act, consider the lifestyle you want to enjoy today, but also think about your future.
Do you intend to grow your family? Then it might be wise to buy a larger home than you think you need, with more bedrooms and an extra bathroom.
Are you planning to take a position in downtown Toronto? Consider your commute time. A house with easy access to transit could save you hours each way.
Remember that those who invest for the long term nearly always come ahead. A local real estate agent can help you plan for a successful purchase.
Do you want to know what areas in Etibocoke are the best investment in this changing market? We’d be happy to talk about your options. You can book a free, no-obligation chat with us right here.