As with every market, the real estate sector experiences its fair share of ups and downs. According to the Canadian Real Estate Association (CREA), annual residential sales activity in 2007
was up 7.6% from 2006 levels. CREA predicts that the average residential property price will increase by a healthy 5.5% in 2008. Knowing when to enter the market can be a difficult decision in an environment where property prices are rising. However, with mortgage rates continuing to sit at near-20-year lows, now is as good a time as any to jump into the market as a buyer or a seller.
Here are some tips to get your house hunt started:
• Know the neighbourhood. Start studying listings in the area you want to buy to better understand what constitutes fair pricing. Drive around to count “for sale” signs and get a feel for
activity levels. As a buyer, more signs can be a good thing for a long-term purchase, but may hold values stable over the short term, because of supply and demand economics.
• Get pre-approved. Know what you can afford before you buy and know what terms mortgage lenders are willing to give you. Mortgage brokers can usually secure an interest rate guarantee for up to 120 days from lenders to protect you from fluctuating rates. A pre-approval strengthens your negotiation position, as you are fully aware of your financing position, and can get other terms and conditions or even more favourable pricing from a lender.
• Watch the calendar. Time of year is a major driver of market activity. Buying during seasonal winter and mid-summer slowdowns can give the buyer an advantage. In Calgary for example, August is a historically slow month, as many Calgarians are on vacation, out of the City, and not buying homes.
• Consider your timeline. Are you buying your house as a long-term investment or do you simply want to flip it in a couple of years at a profit? Longer term investors are less sensitive to short-term
fluctuations in rates and market activity.
MBN Mortgage Specialists work closely with home buyers and their realtors to assess their personal and financial goals and develop a home ownership plan uniquely tailored to their clients.
