Buyer fatigue is nothing new. It can happen to anyone in any market. We’ve seen it before. In a sellers’ market buyers lose their resolve when they face bidding war after bidding war. Or it might be the endless disappointment of finding a home you love only to see it sold just before you put in an offer. In a buyers’ market it’s all about overwhelming options. Every house starts to look the same and it’s hard to make a decision. Regardless of why buyer fatigue sets in, we’re all for taking a moment to reflect on your goals and wait to see if your determination to find a home returns. Hey, we say never run into a home purchase too fast, or on impulse. But and this is a big but, there are a few reasons it might make more sense to try to shake off that fatigue and find a home now. Here’s why.
The Cool Down Is Heating Back Up
We did see a cool down on the frantic housing market back in May of this year. Many experts looked at this as a sign of buyer fatigue. As people were trying to get life back to normal following a year of mixed messages, on again/off again lockdowns, and a soupcon of fear mongering, the housing market felt a jolt of renewed interest from buyers in the beginning of the year. However, people started to lose steam as they faced a competitive market and also saw prices higher than what they’d hoped. The main problem is that although we’re still seeing a drop in sales year over year and even month over month in July, overall, the market continues to experience above average numbers this summer. Prices in July were up 12.6% from last year, and on a seasonally adjusted basis, up 0.9% compared to June. So despite a “cooling down”, the market is as hot as a TO heat wave. Giving yourself a pep talk to get back into the game will help you avoid getting priced out in the future. Lower prices now can help you find a home in the GTA.
Low Inventory Could Get Worse
Next, and this is very important, the low inventory will get worse. Why? Because a backlog of people seeking a life in Canada is soon to add more buyers into the GTA real estate market. So the pressures we see on housing prices now will become even more strained as we begin to welcome new Canadians into the fold. We’ll also see the return of more students coming into the GTA, putting further pressure on housing in general. If you have the gumption to shake off your buyer fatigue, you have a chance of getting in on the market before these population increases impact competition for buying a home in the GTA.
Interest Rates Might Not Hold
Let’s not forget we’re seeing low interest rates right now. These interest rates might not hold on much longer. Low interest rates are one of the things that can make buying a home affordable, even though prices are high. Once interest rates begin to inch their way back up, it will become harder to qualify for a mortgage. Remember, the federal government made an adjustment to the mortgage stress test so now you have to qualify for either the contracted rate plus 2% or 5.25%, whichever is higher. So you really don’t want to wait too long and find out you’ve inadvertently disqualified yourself from mortgage eligibility. If you can shake off that fatigue, you can make the most of lower interest rates, reduce your monthly mortgage payments, and be more likely to qualify for a mortgage despite the new stress test.
On the Flip Side
We always like to make sure we present both sides of the coin. Look, if you really feel the pressures of house hunting is too much, you probably need a break. Stress can lead to bad decisions, something best left after a night on the town, not for making the largest investment of your life. When your gut is telling you overwhelmingly now is not the time, then you need to at least revisit your options. Just keep in mind that waiting will mean higher prices, increased competition, and potentially higher interest rates.
If buyer fatigue has forced you onto the sidelines, we’re here to help. We offer some of the best real estate agents Toronto offers ready to discuss your options and help you pay the best possible price for your dream home. Give us a call at 416.291.7372 or email us at hello@christinecowern.com. We’d love to work with you!
