Have you thought to yourself or had someone tell you to wait and see what the market is going to do? “If you wait 6 months the prices are going to come down” or “within the year the market is going to correct”. Unfortunately I have one client who has been saying this now for 4 years. The problem is I could not tell him with 100% certainty that the market was going to go up. I can advise with almost a 100% certainty but no one has a crystal ball. I have explained to him that historically real estate always goes up and in the big picture it is best to get into the market sooner rather than later, but I never said to him “buy now”. I actually wish that I had…
I have another client, a couple actually, who missed out on a property because they were not willing to come up $7,000. That one hurt. I remember almost begging with them to come up a little more, but they refused. The house sold the next week well over what they were willing to pay. Now, they are waiting for the market to correct. It has been close to a year now.
What really hurts about these particular situations is that the prices have gone up so drastically that they feel like they have been priced out of the market. I remember with one client mentioned above when we first started looking 4 years ago the average price in Hamilton was just over $500,000. Recently that price has come down and hovers around $900,000 but not long ago, and it will not be long until that price is over $1,000,000.
The market is not a smooth graph where it goes up and down like waves in the ocean. It is more rapid with sharp peaks and valleys like a mountain range. One week up, one week down. Again, historically it always goes up. The problem is that the market is going to rebound quickly. By that I mean it may be tomorrow, next week, or next month but when it does it will go up quickly. So if you are waiting for the market to correct, you are going to miss it. It is like catching a ball after it bounces. By the time you try to grasp it, it’s gone.
You are waiting and watching the market and notice that it is starting to come up. At that point it could take you weeks to get out and find the property you want to purchase. By that time the prices have gone back up. I have seen it happen time and time again.
There is a saying that the best time to buy real estate is yesterday. If you are going to buy the property and live in it for years to come, the savings you may find between purchasing now and “when the market corrects” are most times not worth it. There are 3 scenarios. You are currently paying rent somewhere, you have to sell your current home, or you are living somewhere rent free like living with your parents. If you are currently paying rent, that money is paying someone else’s mortgage when it could be yours. Calculate how much you are spending each month on rent and times that by the number of months you are waiting for the market to correct. You will quickly see that you are not really saving money at all. If you need to sell your home before you buy, while you are waiting the price of your home is coming down as well. If you are living rent free somewhere that is great. At least you are saving but you will not be able to save as quickly as the prices of houses will go up.
As mentioned previously in this article, I wish I had said to my client 4 years ago not to wait and to buy at that time. What I would say to him today and what I am saying to you is please buy as soon as you can and stop waiting for the market to correct. Maybe the prices of houses will come down a little more but remember they are still up from this same time last year. If you plan on living in your home for at least a few years then don’t worry about the current price and if it might come down a little. You are worried about the nickels and dimes when you should be looking at the dollars.
If you would like to discuss this in more detail, please give me a call or send me an email. I look forward to hearing from you.
