Is this a Good Time to Buy in the Calgary Market?
Is this a good time to buy a house in Calgary? You want to buy a home. Eventually. But timing matters when it comes to such an enormous and potentially life-changing purchase. With uncertainty about Calgary’s economy and real estate market fluctuations, that can be a difficult question to answer. It is, however, the right time to buy a home in any economy when you buy wisely.
Some things to consider:
1. Purchase for less than your mortgage pre-approval.
Purchase within 80-90% of your mortgage pre-approval so you aren’t at the upper limit of your monthly cash-flow. Plus adding some extra principal payments will reduce your mortgage term and save you thousands in interest.
2. Save for six months of bills.
Having six months of bill-paying power, including your full mortgage payment, taxes and insurance will see you through any lean economic times or surprises. It will also reduce the stress of living month to month to cover your living expenses.
3. Put down a large downpayment.
Making a large down payment doesn’t just increase the chances of getting your offer accepted but also reduces the size of the mortgage payment. For most conventional loans, you’ll need 20% of a home’s price, or $60,000 on a $300,000 home. Adding an extra 5% can make a big difference in your monthly cash flow.
4. Never buy the best or the worst home on the block.
The best home will always be subject to other properties holding back the house value – if your home is the highest standard by which all homes are compared, your value will increase much less than others. Buying the worst home (unless you can afford to renovate) will mean the property is the least desirable if you intend to sell within a few years.
5. Research the neighbourhoods.
Choosing to live in the most exclusive or popular neighbourhood may mean inflated home prices. Also be aware of that “good deal” in a less desirable neighbourhood – you can fix up a house, but you can’t fix a neighbourhood. Look at neighborhoods where property values are going up, where there are good schools, easy access to amenities and a strong community focus.
6. Check out the inventory in your area.
Supply and demand – the more supply is available, the lower the price is for buyers because there is less competition. As demand goes up and supply goes down, competition among buyers increases, which means prices also increase. So the best time to buy is when many houses are on the market and not many people are buying. You will have more room to negotiate and are likely to get a better price.
You can identify a buyer’s market by looking at how many homes are on the market and how long they have been up for sale. If most have been for sale for more than six months, demand is likely low. However, if they are being bought within a few weeks or months, it’s likely the market is leaning in favor of the seller.
According to Kerri Markle, REALTOR with RE/MAX Landan, it’s a balanced market for single family homes in Calgary with some popular communities leaning towards a seller market. This means that for homes that are priced right, they are selling quickly with some receiving multiple offers. It’s a buyers market for condos so if you are looking to get into the real estate market for the long-term, this may be a good option.
7. Interest rates
Interest rates on home loans also fluctuate depending on market conditions. Currently interest rates are fairly low but have been inching up fast, which has many thinking of buying a home before the rates rise even higher.
8. Time of year
Buying during the peak seasons of spring and summer may result in more property listings available but it can also translate into more competition and potentially higher prices. However, buying in fall and winter also has its advantages. Buying off-season usually gives buyers more negotiating power for because sellers are often more motivated to sell.
Predictions from the Calgary’s Real Estate Board CREB® July 2017 Market Forecast indicate signs of economic recovery and stabilization of the housing market. Good news for the real estate market and for the city!