BEST TIME TO BUY?

These days there’s a lot of talk about interest rates and it’s become quite common to hear buyers say they’re waiting for rates to go lower. So far in 2024, we’ve had three ¼-point interest rate cuts by the Bank of Canada (BoC) with more expected. And, that last part – “more expected” – is playing a big role in why some buyers want to wait. Why are more expected? Well, inflation has moderated, and many economic indicators are suggesting lower interest rates are needed to avoid a recession. Consequently, economists across Canada are routinely sharing their belief that the BoC will continue to drop rates. More notably, the normally tight-lipped BoC itself has indicated that more rate cuts are likely coming.

Naturally, this is creating a sense of optimism amongst buyers, many of whom have been waiting some time for better market conditions before making their move, resulting in the widely held belief amongst real estate professionals that there’s a fair amount of pent-up demand. So, while not much has changed in terms of buyer activity following each of the last three rate cuts, thanks to the BoC saying that more cuts are coming, we’re hearing buyers say they want to wait

believing lower rates are on the horizon.

Yes, lower rates are likely coming, but just as we saw buyer activity and prices go down when interest rates went up, we typically also see prices go up thanks to increased buyer activity and competition when interest rates go down. If buyers all try to time the market in a similar manner, they might find themselves suddenly competing and that is likely to lead to higher prices.

So, when is the best time to buy? Now. Prices are well off the highs we saw a couple years or so ago, competition is low, days on market are longer, and odds are strong that you’ll be able to score a good price with whatever conditions you need. On top of that, interest rates are already coming down. Your current mortgage terms are temporary, but the price you pay for the house will not change – you can’t go back to the seller later and renegotiate a lower price later, so why not take advantage of lower prices today? Then, when everyone else comes off the sidelines and competition intensifies resulting in higher prices, you’ll be glad you bought for a great price ahead of all that!

There’s no question the market has been soft the last several months and that’s meant sellers have had a more challenging time getting their houses sold. However, it has become quite common to see buyers include a condition on selling their existing property, and often, these conditions are now being accepted by sellers. So, if you have a place to sell, including this condition will help you mitigate some risk. Beyond that, the house that needs to be sold must be ready to list, so you’ll want to be proactive in preparing it for sale – decluttering, cleaning, required repairs, painting, etc. And, of course, it needs to be priced right, if not attractively, to buck the trend of longer days on market.

For more insight on how to best prepare for buying and/or selling real estate, please reach out anytime. To ensure you’re getting the latest market information for your neighbourhood and the best advice on how to navigate the current market, I’m always happy to help. Want a better real estate experience? Let’s chat.