This post is an edit of one of my first back in July 2012, which was re-visited again Nov 2013. This post contains links to various components which have been expanded upon further in separate posts. The message remains consistent.
Q. Is today the right time to buy Vancouver Real Estate or not?
A. Today is the right day assuming one has found the specific property that works for them on all levels.
This question arises on a near daily basis with clients, friends, family, three different Barista’s have asked me over the past few months.
The winning answer has been consistent for decades now;
If we are talking about an owner occupied property which one plans to reside at for at least the next 7-10 years, then the right time to buy is today.
Over a 7-10 year horizon the day to day, even the month to month gyrations of the market is of little importance overall. Market values are like a small yo-yo oscillating on a large escalator.
There are some key things to consider when buying an owner occupied property. Primarily, every time you move house, especially if you have a growing family, is disruptive in all manner of ways. Bearing this in mind when ones locates the right property for them (& their family) which hits high notes on the variables below, among others; Take Action!
- Location
- Layout
- Age
- Size
- Recreational amenities
- Schools
- Distance from workplace
- Suite revenue
- the list goes on…
Getting all of these variables aligned is something that takes dedication on the part of the buyer and their quality Realtor’s. The process can often consume a few months or more, and for some may result in over 100 viewings. This is more than enough to juggle without also trying to ‘time the market’ on that perfect home.
Speaking of timing; always investigate the actual costs and potential viability of using Bridge Financing to allow a small overlap during which one owns both their current residence as well as the new one. Installing new flooring throughout, interior painting, upgrading kitchens and bathrooms, etc. All are far less disruptive when done prior to occupying the space. The costs involved are surprisingly lower than most clients expect.
The Vancouver market is sometimes referred to as a roller coaster, however the long steady climbs are rarely followed by as a large of a drop as the media has been calling for over the past…ever since the creation of the printing press. Things Real Estate related often tend to be far more boring than the media would like, slow & steady.
Refer to my ‘yo-yo on an escalator’ analogy above.
Time and Stress saving tip of the day; remove ‘fast-food media’ from your information diet. Media headlines are rarely an accurate predictor of the future.
The basic #’s demonstrate that a detached home in Vancouver has risen from 13K 40 years ago to ~1M today. Not in a straight line mind you. However if you never leave the market then straight-line appreciation is not really a concern.
Also the MLS #’s are an imperfect indicator of what is happening today in the market, as in literally ‘today’, MLS data reflects deals that were negotiated typically 90 days prior to the completion date which was itself in the previous months report. In other words by the time the MLS data indicates a trend one way or another said trend has in fact been in motion for as long as 6 months and could be either reversing or ramping up.
Take MLS data with a grain of salt. It is a useful part of the picture for sure, but not the exclusive indicator.
Where then to get the most accurate data?
Talk to front line folks, Realtors, Brokers, Appraisers, etc. for a better handle on up to the minute trends. Ask an Industry Expert, ideally more than a few.
If you suspect industry insiders may be biased… well perhaps we are, any bias would be based on positive personal experiences with our own homes and investment properties. All my life I have heard that real estate prices cannot rise any further, and interest rates cannot fall any lower. Yet 42 years later here I sit in a home never valued higher financed it 50 year record low interest rates.
Ignoring the ‘conventional water-cooler wisdom’ has been one of the smarter moves that I have made.
Overall prices rising or falling by 10% or even 20% has little impact on the livelihood of a busy Realtor or Broker. There is no specific vested industry interest in seeing prices steadily rise, A flat market provides ample opportunity simply through our growing population and the many lateral moves which people make.
This dovetails with the main point being made here; Short term price fluctuation is not a key factor in the decision to buy, in the long run you will win by owning, not by sitting on the sidelines.
At the end of the day it is all about finding a place you can call home for the duration. Plant roots and become a part of a community. Home ownership will justifiably continue to be a part of living the Canadian dream.
Perhaps the (short term) timing will feel poor, as it did for presale buyers in 2007, whose completion dates were set for Spring 2009. However 7-10 years later most will be glad that they bought when they did.
Hindsight is significantly simpler than foresight. Stick to the big picture.
Home ownership remains one of the best investments we make socially as it provides an individual and/or a family with a certain sense of security, stability and community.
Thank you.