For many people, summer is the time to hit pause, sit back, relax, take some extra time with family, and spend a few days with the kids while they are on school holidays. And while it sounds like a great thing to do, it isn’t the best plan for people looking to sell their home: in July and August, home sales slow down dramatically, coming off a busy spring, and now highly sought-after houses sit on the market, because would-be owners are on vacation.
But what is bad news for sellers is great news for buyers. If you are thinking about buying a home, August is the time to do it.
These houses that have sat stagnant for the last couple of months are making their owners frustrated, and they are getting a little bit antsy to see some action and movement. And as a result, they are dropping their prices. In some cases, houses are being re-listed for up to 6% less than market value (at the average condo price of $546,984 that's more than $30,000), and at a time when market values are high and the housing market is hard to break into, that is significant.
The ideal scenario only aligns under very select circumstances of course, and there is a finite window when you need to act, whereby despite high market prices, housing prices are actually low. The decreased competition and fewer people out shopping means that prices stay more reasonable, and within an affordable range for many would-be homeowners. But act quickly because soon enough, the smaller listing number leftover from the summer, bleeds into fall, where demand increases, and then prices do too.
While you shouldn’t jump into a home purchase in the next couple of weeks just because there appears to be a sale on houses, there are some good indicators that you can use in your favour to help you know if you are ready for a home purchase:
You Have a Down Payment
Amidst the changes in mortgage laws and stricter bank lending rules, many people have struggled over the first half of 2018 to come up with enough for a down payment. If you have the amount required for a successful loan application, you may be in a good place to be looking at houses.
Part of knowing if you have a down payment will be to speak to your bank or mortgage broker and get pre-approval for a loan. This will give you a better idea of how much you need to have saved, how expensive of a house you can buy, and when it comes time to seal the deal, will let you be the first one to successfully purchase the house.
Finally, don’t forget the basics: it doesn’t matter how inexpensive the house is comparatively, when you don’t like where you are living. Do your neighbourhood research ahead of time, thinking about where you might like to live, and don’t just settle for a property because it is a great price.
Please reach out to me to learn more about why it might be a good time for you to purchase a house, where you should start looking and how to know if the house you find is right for you.