In the weeks following Finance Minister Jim Flaherty's mortgage rule changes, the media has been full of stories debating whether we're on the brink of a soft landing, a crash, or neither.
While it's obviously always good to
stay on top of the real estate market, it's important not to read too
much into the opinions of "experts"?. Not only does the media love to
sensationalize real estate, for some reason (think of how many times
these same reports have told you to "lock in" over the last few years),
but it's very, very difficult to paint the entire Canadian real estate
market with one brush. Heck, it's even hard to paint the real estate
markets in one city with the same brush!
With that in mind, try to push all
the extraneous chatter out of your mind and narrow your focus to
encompass your situation and your situation alone. If you're thinking
about moving in the near future, try to look at these factors, rather
than those of the market as a whole:
If you're not ready to move - namely, your finances aren't in order, your credit is a mess, and your home needs a lot of updating - don't rush into listing it just because you're worried the market is going to tank. You'll likely not get top dollar for it anyway, and you might end up spending more money on a new mortgage if your credit isn't in good shape.
2) What does your competition look like?
Are there a lot of properties on the market in your area right now? If so, you may want to wait a bit to list. The more homes you're up against, the higher the chances that there are places nicer than yours. If those places sell quickly, not only are they off the market, but you'll also be able to benefit from their selling price.
3) What's going on in your area?
If there are lots of improvements scheduled for your area, you might want to hang onto your place a little longer. While the market as a whole may slow down, there might be an increased demand in your area if you're getting a new transit line, or new improvements to your neighbourhood.
4) Who's likely to buy your home?
It's been said that first-time buyers are the group that's going to be hit hardest by the new mortgage rules. If your home is a starter home, you might want to sell sooner rather than later. On the flip side, if it's more of a second home, you may be able to afford to hang onto it for a while.
Obviously, no one can predict the future and, like all investments, real estate comes with its fair share of risks. If you focus on what makes sense for you, rather than everyone else, however, it will be a lot easier to justify your decisions and be happy with them.
Nice article. I like how cleanly you've broken it down. I would also add the tip to get to know a realtor. Having someone you can trust that works in the industry can make the decision a lot easier, as long as it's someone who is genuinely interested in helping you, not just in making a quick buck.
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