One of the smartest people I know told me yesterday, ‘The market is really bad right now and interest rates keep going up. I’m going to put off my home search for now.’
Let me get this straight. Instead of buying now, you’d rather pay more for something crappier in the future.
So I felt I needed to write about this topic again. About buying low. Then selling high.
First, some quick stats to explain what I’m talking about.
Sales of detached homes are down 20% compared to average over the past 10 years. Supply is up to 5.5 months; it’s been under 3 for almost all of my real estate career. The typical house in Calgary was $508,200 last September. It’s now worth $493,100.
Townhouse sales are down 14%. Months of supply is over 7. A typical townhouse in Calgary was $336,000 last year. Now it’s sitting at $324,700.
Apartments are even worse. Sales are down over 20% and months of supply is almost 8. A typical apartment was $264,300 last year, $257,200 now.
Less than half of the homes on the market This year are going to sell.
Calgary’s real estate market is perfect storm with no George Clooney to save the day: tougher mortgage qualifying rules, an economy that hasn’t got its mojo back, rising interest rates, and those idiots in government (I left that open so you can shake your fist at which ever level of government you dislike most). The result is, very few people are buying houses. Very very few.
So this is the fifth time I’m writing about this genius idea that I have — Buy Low, Sell High.
Please, someone, please… just listen to me.
If you have an inkling to get into the real estate market, now is the time. If you want to expand your real estate portfolio (that’s investor speak for buy more houses and stuff), now is the time.
If you like lots of choice, great deals, leverage in negotiations, and making a crap ton of money in the long term, now is the time.
If you’re worried about the future of the stock market and want to put your money in a more tangible asset, now is freaking time!
I once wrote that houses don’t go on sale. Turns out, I can be wrong sometimes. Right now, it’s a Real Estate Black Friday.
My financial advisor summed it up yesterday.
Financial pressure isn’t the dominant reason why so many homes are on the market. You wouldn’t be taking advantage of someone’s misfortune. There are always homes that need to sell. Families are relocated, need to downsize, had another child or two… there are endless reasons why. Life happens.
There is also a massive group of people who’d love to move but their current house isn’t selling. I talk to people in this group everyday. Literally, every single f-ing day.
Yes, it’s a risk to buy. It takes guts to be positive when the rest of the city is negative. We’ve all heard that what goes up must come down. But we don’t hear enough that when markets go down, they eventually come up.
Heck, in the next two years, if the detached home market recovers as much as it dropped this year, you’ll make $15k. Hold on to that home until the next seller’s market and who knows how much you’ll cash in.
Like John said, if there was a epic sale on TVs and the huge one you’ve been eyeing fell into a price range you could afford: you’d wake up at a ridiculous hour, line up with a hoard dozy gamers, and trample anyone who got in your way. Well… it’s worth exploring if the house you want fell into your price range too.
But… in two years you’ll probably be reading another one of my blogs with this same title and thinking about that house you didn’t buy, and can’t afford now. Or the money you lost out on. Or how smart Tim is, and you maybe you should start listening to him.