Toronto and Vancouver are seller’s markets; thus, together with the rise of open houses in the summer results in bidding wars which end with houses selling for over $300 000 of the original price. This is scary for a home buyer, especially if it’s their first time buying a home. However, this doesn’t stop people from entering the housing market due to fear of the prices climbing even higher as time goes on.
For some, waiting until fall to buy a house could be the smartest option. Waiting could reduce bidding wars as well as allow you time to save up and avoid the summer high prices in Toronto and Vancouver.
Wait on This Peaking Market
The prices of houses are quickly rising, however, as stated by the Canadian Real Estate Association, the market has “topped out”. As experts have stated, first time home buyers could get the better end; by waiting on the rising housing market, and meanwhile investing in other things. This option however is not guaranteed, so the preparation to take on this risk of further increasing housing prices must be acknowledged.
Spring and summer are the most popular times to buy a home as parents are rushing to settle down before the new school year. As fall and winter approach, although there will be less listings, the competition rate will go down as well. This results in less bidding wars and the goal of lower selling prices. Financially, it will be a lot better to purchase in the fall or winter.
The Down payment, Save!
Do not underestimate the power of additional savings. Many people can rush into purchasing a home without even considering the additional closing costs like land transfer tax and more legal fees. Without putting this into consideration, they’re left struggling to pay these additional costs after thinking they had it all covered. Just by adding even a couple months of savings into your down payment might not increase your budget, however, it will give you that extra wiggle room for all the extra closing costs and unexpected fees.
For a home buyer, especially first time, things can seam chaotic. Before waiting out the market, you must first evaluate your affordability and come up with a budget. Take a look at your current salary, and if it will cover all the costs and other expenditures while still allowing you to save. Keep in mind rate increases and weather or not you’ll be able to swing it. Also, remember other large purchases you have to make along with a home, make sure you can afford both before making any decisions. Other big purchases you could be making such as a car or any large spending you anticipate in the near future must be accounted for and covered before entering the housing market in order to be secure. Make sure you have a solid knowledge of your financial priorities and savings, in order to really know if you’re up for making a bid, and taking that leap into purchasing a home!