A few evenings ago, a good client of mine indicated that her search to buy a Vancouver home was (on advice of her friends and family) going to be put on hold until Spring 2017. She wants to wait until prices soften and then will buy in the Spring when prices bottom out! I chuckled to myself when i heard this reasoning and also of where the so called expert advice came from. I guess her friends and family know something I and the experts don't know.
I told her that no one knows which way the market is going to trend moving forward. That so-called crystal ball is something we all wish we had but instead we have to make decisions based on what our intuition tells us to do. We always say, “Buy and sell when it's right for you based on your personal circumstances. Forget trying to time the market. If you’re buying you should have a minimum 5-year horizon so short term swings in the market should not matter."
Since the recent market stats came out this week showing August sales off from July I have been inundated with calls from homeowners and potential buyers wanting my advice on what to do. I will start by a very simple analysis of general economic conditions here in the lower mainland stated in Layman terms. Nothing too complicated.
General Economic Conditions In The Lower Mainland
The overall economy here in BC and the lower mainland remains robust. We have low unemployment, and general business conditions are in great shape. You go downtown on most evenings and restaurants are busy. People are spending money. Interest rates are rock bottom and will likely stay down for quite some time. This is not 2008 when businesses were closing, banks were not lending and the economy came to a stand still.
Our real estate market has cooled and I think it has been caused by so much negative news media stating the market was either going to crash or cool down. When enough people hear this negative news the negativity feeds on itself and eventually changes the sentiment. The clincher that really cooled the market was the 15% tax to foreigners. This scared the entire market taking buyers off the streets and also causing many sellers to de-list their properties.
Here is what I am telling everyone and its just my opinion:
If You're A Home Buyer In The Lower Mainland
If you are a Buyer and looking to step into the market this is a great time to buy. Buy now! This is the first time in maybe two years where you may not end up in a bidding war forced to make a subject free offer! This is finally a sane time to buy. Why would you wait on advice of your friends and parents to buy in the Spring! By Spring 2017 we may see market conditions swing again in the direction of a Seller’s market. When the market is out of favour its time to buy. Be a contrarian. With interest rates at record lows this is a real opportunity.
If You're A Home Seller In The Lower Mainland
If you are a Seller, I am advising those homeowners that have to sell to list in mid September. The rest should wait until the market stabilizes and market sentiment becomes more positive. It does not make sense to list your home when buyers are negative. A seller should stay on the sidelines until possibly late October or maybe even early 2017. Now, if you’re selling and then buying in the same market and location then its probably fine to go ahead and move forward sooner rather than later.
If you consider the big picture in Vancouver you like so many will feel that long term prices should stay at or near current levels. Vancouver is consistently regarded as of the most desirable cities to live in globally. Vancouver has one of the easiest climates to live in. Never too hot or too cold. Vancouver has limited land so we cannot have urban sprawl. The city is so called, landlocked. As more people migrate here the population increase will continue to put upward pressure on price. This new 15% tax to foreigners will cause some to buy elsewhere but for the super wealthy and there are many, this added cost will simply be the price to pay if you want to live in a great city. Safe, clean and far removed from the chaos of what is going on in so many other regions of the globe.
Just my opinion so we’ll see how this all plays out.