Buying or Selling its most important to note - over time housing markets rise and fall.
Historically, on average, these peaks and valleys trend in 5 year cycles. Assuming the average holds true and the market began its pricing uptick after the fall of 2008 current conditions are now ripe for a correction.
As “Bubbles” “Bursts” and “Foreign Money” dominate the media there aren’t many pages of print left over to show the data regarding long term trends or the seasonal trends (you can set your watch to) that affect pricing fluctuations.
Macro and micro economics, consumer confidence, immigration and migration patterns, governmental regulation and legislation will always have an immediate / short term effect on the supply and demand of housing but in our opinion it’s more important to look to the historical / long terms trends when trying to understand current conditions and how they may impact your decision to buy or sell a home.
Ie: Consider these Real Estate Truths …
Real estate has peaks and valleys but there will never be a future peak that is lower than the last one.
Time is your ally - turning bad real estate decisions into good ones.
Equity is your safety net. It can supplement a pension and give you financial options later in your life.
Your mortgage is a forced savings program.
It’s easy to get caught up in all the noise around the immigration tax and the affordability dilemma but harder to separate the facts from the hype. Pricing is already on a downward curve and in our career we have seen this before … twice.
Here is what you can expect in the months to come …
The psychology of buyers, sellers and their realtors will take a few months to acclimatize to new conditions.
Buyers will wait to buy and demand will decrease – driving prices down.
Sellers will try to hold firm at peak pricing levels and supply will increase – driving prices down.
Home owners who do not have the luxury to wait or an interest in waiting … will sell below the area average, pushing pricing back to where it was before the uptick began.
This last lesson could perhaps be the most important one if you are considering a sale in the last quarter of this year.
Ie: Sellers who list at peak pricing levels will simply extend their days on the market (with no end in sight) and follow the downturn in pricing. Sellers who lead the downturn in pricing will establish the new average and sell in a reasonable amount of time.
For buyers it will be most important to define your plans in the short term or the long term. Short term purchases (under 5 years of holding) can be risky right now. Long term purchases ( over 5 years of holding) will always be worth more than what you paid.
And for all of us it’s important to remember if your selling and then buying in the same market conditions … ie: rising or falling … your net proceeds will be the same.
Short term or long term plans we would LOVE to be the realtors you call for help. 604-583-2000
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