I am often asked if this is a good time to buy a home? The answer is it depends.
If you are a first time home buyer this is a great time to buy. As you can see in the attached report it is a buyer's market. When in a buyer's market you can get some great deals and puts you in a great bargaining position when negotiating an offer on a property you would like to buy.
If you are a move up buyer making the move in a down market make lots of financial sense. Yes you are going to sell your current home, but you more than make up for it on your purchase. Let's take this example... Let's say that your home was worth $400,000 before the market started to go down, and the market valuations dropped buy 10%. That would mean that your home dropped by $40,000 in value. But here the is good news... Let's say the house you were going to buy next was worth $600,000 and it dropped by 10% that means it would have dropped by $60,000 and you could now buy it for $540,000. That is a $20,000 net savings and if you were to have a mortgage it would be even more than that as your mortgage amount would be lowered by $20,000 plus the amortization cost over 25 years could double or triple that amount.
But what if you are downsizing? Then it is true that the math works against you as per the example above. But here is the questions you need to ask yourself?
1) How long is the market going to continue to drop?
2) How long will it take before the market recovers back to the last high point?
3) Am I willing to wait 5 or more years before I can get back to that high point and is it worth waiting? Sometimes it is better to take that equity and re-invest it in something that is going to get you a positive rate of return.
So as you can see it really depends on your situation. If you have any questions please feel free to give me a call anytime at 780-6520 or start your search at www.FindMyHouse.ca
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