Are we switching from a hot, seller’s market to a more balanced market?
In some centres around the country, we’re starting to hear of open homes getting a little bit quieter and fewer offers being put forward for properties compared to say, six months ago.
So what does this mean if you’re trying to buy a house right now?
There’s an old adage in financial investing that says trying to time the market is a fool’s errand. No one really knows what markets are going to do in the future. Not even the professional investors.
The smart approach is to look for a property that’s right for you and go into any purchase with a long-term view. Historically, if you’ve held a property for a decent period of time, say 5 to 10 years, you’ve probably done very well from owning that asset.
Holding any property long-term allows plenty of time to ride out any temporary blips in the market if they do occur.
If the market shifts, resulting in a slightly lower price for your current home, then you should be able to buy your next home at a slightly lower price, too. Essentially, it all evens out in the wash. While it might take slightly longer to sell your home, you may well have less competition on the home you’re trying to buy, which increases your chance of securing the right property.
Rising, hot markets with lots of offers on every property actually slow down the real estate market. They make it harder to move. Why? Because it’s so much harder to secure the property you want when there are 15 other people trying to buy it, too.
When the market gets slightly more balanced, it actually frees up more supply. It creates a situation where you have more properties available for sale, providing more choice for all buyers, making it easier to move, which in turn helps even more properties come on the market.
Making smart decisions in a changing market.
When real estate markets move, they can move quickly. Keep your finger on the pulse by attending as many open homes as you can. Build up an idea of how many buyers are in the market right now, compared to a month ago to get an understanding of how much competition you’ll have when you make an offer.
But remember that in any market, good houses generally sell well with lots of competition.
So if you see an attractive property still garnering lots of interest, even in a changing market, don’t be too surprised. There might just be 10 offers rather than 15.
Whether it’s a seller’s market, buyer’s market or balanced market, focus on getting a home with attractive features in a good location that will suit you for at least 5-10 years and you’ll be setting yourself up for a great future.