When is the perfect time to buy?

by Shawn Lackie

If you have been in this business, for any length of time as an agent, you probably get asked, “When is a good time to buy a number of times?” The answer? Who knows. Especially in the last three plus years. This whole market is like playing with stocks.

The old adage used to be, 'Buy Low and Sell High' and to a certain extent that still carries some weight. The trick is in figuring out the timing. 2016- 2019 put an entirely different spin on things. When the pandemic hit, well, it just turned the whole exercise into a massive guessing game. It’s been pretty much the same ever since, except now, people are trying to figure out just how low prices will drop before they make the single most important purchase in their lives.

A recent poll by RBC showed 64 percent of Canadians agreed, “You never know when it's a good time to buy,” while 73 percent cited economic uncertainty as the main reason for buyer ennui.

Buyers are struggling to read the market, and the latest data on the national affordability measure showed it improved to 53 percent, the highest in four years. The measure tracks the share of a median household’s pre-tax income, needed to cover ownership costs, meaning a lower reading point to improved affordability. Among Canadians, who intend to buy a home within the next two years, 45 percent said, now is the right time to buy, compared with 27 percent of Canadians overall. RBC’s poll also found, 78 percent of Canadians believe home ownership requires more sacrifices today than it did for previous generations, while just 28 percent said, they feel confident making home buying decisions in today’s market.

Buying and selling has been pretty much a guessing game for the last 25 years. Following the market downturn, from 1988 to 1998, trends, for the most part, have been in an upward climb. Then all the madness during Covid threw things way out of kilter. So, it really hasn’t been what you could call a “normal cycle,” for over a quarter century.

Inflation is undercutting savings before prospective buyers even reach the market. Nearly three-quarters, of those intending to buy within two years, say, rising prices are causing them to save less for a home and most first-time buyers will experience financial shock. More than half, 53 percent, are tapping retirement savings to fund a down payment — up from 49 percent in January.

For homeowners approaching mortgage renewal, confidence is equally fragile. Just 44 percent of those renewing within two years feel confident making mortgage decisions, and 18 percent admit they haven’t considered what they could afford if rates rise. Still, 65 percent believe their household could absorb a rate increase. Compare that to a generation ago where home prices were stable, for the most part. A family could plan ahead, save accordingly, and make the “big purchase” when the time was right. That was then and this is now. Predicting this crazy market is anyone's guess right now.

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