1. Is now a good time to buy?
2. Is now a good time to sell?
In answering either question it must always be qualified with, “We don’t have a crystal ball”.
So, is it a good time to buy?
The correct answer can only come from the potential buyer; only by understanding the motivation of the potential buyer can a Realtor answer this.
If the reason to buy is justifiable then the mortgage qualification process should follow immediately thereafter and before going any further.
With such favourable rates available right now this is an important part of the decision because one consideration is often the numbers working for a mortgage payment vs. paying rent. Locking-in might also give needed security for longer term budget certainty.
Many potential buyers say they will wait for the market to “bottom-out” (apparently they have a crystal ball). Even the best economists are generally only able to pinpoint the “bottom-out” coordinates in retrospect, and at that point the best choices are probably gone.
In the current over-supplied market, one couple I was recently working with:
particularly liked the selection of homes available,
wanted to take advantage of low lending rates,
didn’t feel any pressure whatsoever to rush their due diligence,
made a few low-ball offers, and finally,
were able to buy considerably below the assessed value.
This was precisely why they were in the market buying. They’re in it for the long-term and understood that prices may not have bottomed, but got a beautiful home beyond their expectations.
An investor I am working with is in the market looking for good mid-term ROI opportunities; believing that once things turn around asset appreciation will follow. With rentals at a premium, cash flow isn’t of much concern, and any short-term incidental operating losses are expensed.
So, is it a good time to sell?
Ditto (as buyer); the correct answer can only come from the potential seller. As a Realtor it is important for me to understand the motivation; why exactly is the sale being contemplated? This quick assessment will normally allow for a response.
In a seller’s market it is okay to list with a price above market value, but remember that we’re in a buyer’s market which means a seller must be realistic. Being realistic means pricing ahead of the declining market, and considering that the longer a listing is on the market the less the seller is likely to get.
The seller’s property must be the best (value) against the competition (which is probably over-priced) to be considered seriously by a potential buyer. Is the seller really prepared to price below current market value?
Many of the active listings they’ll be up against in this market are from, foreclosures, speculators , estates, and investors liquidating for cash. If the potential seller is also buying again, are they buying in the same market? Are they buying-up or downsizing? How important is it to sell first?
Ultimately the buyer or seller must have done their homework to be able to make an informed decision.
Rather than relying on hearsay, or a well-meaning friend, supposedly “in the know”, it is good when consumers turn to industry professionals with such questions.
A professional appraiser can be as important to a seller as a good mortgage broker can be to a buyer.
This is why, whether seeking services from a contractor, financial planner, lawyer, doctor, or Realtor, etc., being already networked with a team of trustworthy professionals is essential.