Buying a home in today’s market

One of the questions I hear all the time is this one: Is now a good time to buy a home? No matter what the market is doing, people always worry that they are buying at the “wrong" time and if they wait just a bit longer, the market will change in their favour. Here are several good reasons to buy a home right now:

Historically low mortgage rates. If you’re waiting for the market to “bottom out”, remember that while you wait for prices to come down, you are also gambling that mortgage interest rates will hold steady or drop further. What buyers should keep in mind is that the mortgage interest rate will actually have a greater impact on your cost of home ownership than the price you pay for the property! For example, a 1% increase in mortgage interest rates would immediately erase a 10% drop in the price of a property. Mortgage rates are presently at historic lows. How much lower will they go? It is good to remember that owning your own home has always been a life-style choice and a longterm investment.

Size matters. If you’re thinking of trading up, a balanced or buyer’s market is one of the best markets in which to sell your smaller home in order to buy a larger one. People are more likely to buy conservatively when the market shifts, as it has done in the past few months. This can increase demand for smaller homes and decrease the demand for larger ones. Demand directly influences prices – more people purchasing smaller homes might mean fewer people bidding against you on that larger one, which reduces the possibility of the price being driven skywards.

More choice. The benefit of the larger inventory of properties now on the market is that it offers would-be home buyers a greater selection of homes to choose from. There may even be opportunities to make bids on properties that would be quickly snapped up (or even incite a bidding war) in a hot market. A more balanced market offers you, the buyer, more time to shop and compare properties and find the right fit for your family with less pressure.

Finding the right property for your needs and wants is simple when you have a REALTOR® working for you. REALTORS® have the experience and training to help buyers maximize the benefits of home buying while minimizing the risks. Many of the REALTOR® members of the Ottawa Real Estate Board have worked through balanced and buyer’s markets before, and they are ready and willing to help.

Source: EMC News, February 12, 2009