“When is the best time to buy a house?” is one of those questions that real estate agents get asked all the time. The standard answer is, “The best time to buy a house was ten years ago. The second best time is today.” It’s a smart answer but it tended to be true. Prices over the past decade have consistently gone up. This might not be true this year though. Prices might actually go down.
Will prices go down?
The real question, the question behind the “When is the best time to buy a house?” question is, “Will prices go down?”. The answer this year may be “Yes”.
Why? What’s happening in the market?
Over the past nine or ten months in Kitchener Waterloo, we’ve witnessed a decline in the number of houses sold. At the same time, we’ve seen prices continue to rise. What’s happening is the best houses, priced right sell and the others simply don’t. Listings expire and potential home sellers decide to try again later (maybe this Spring). Building up in the background is a backlog of sellers just waiting for the market to heat up so they can try to sell. We may see many of them put their homes on the market this spring.
The real estate cycle
Every spring, the real estate market shifts into high gear. Home sellers and buyers alike have been trained and programmed to take care of their housing needs in the period March through May. Like a pig in a python, we see a flurry of listings beginning after Family Day and continuing some years until May 2-4, Victoria Day. During this period the inventory of listings restocks the streets and neighbousrhoods with some pretty sweet houses that have been made ready over the late winter and early spring.
Naturally, these houses attract the buyers who are locked and loaded, pre-approved, educated and informed. Real estate business ensues.
The tipping point
This year may be different. Maybe. No one knows what’s going to happen for sure but what could happen is this. All those potential sellers who have been waiting for the market to stabilize (News flash –> It is stable), the sellers and the backlog of sellers will flood the market with great houses creating an oversupply. Economics 101 tells us that when supply outstrips demand, prices fall. Could happen.
When is the best time to buy in 2013?
With the above scenario, the best time to buy would be late spring or summer. The best time to start shopping in now. There’s lots to learn.
If the above scenario does not come true (and it likely won’t) don’t blame me. I’m just guessing. If it does come true however, just remember you heard it here first.
Please call or email if you’re looking for a buyer’s agent.
If you’re looking for the my outlook for 2014, click here