Is Now a Good Time to Buy Real Estate? 

For most people, now probably isn’t the best time to buy or sell property. The uncertainty in the interest rate climate, along with rising inflation and the rising cost of living have put pressure on most of us and making a large financial decision is definitely at the back of our minds and low on the priority list.

If you’re a first time home buyer, your buying power has decreased over the past few months as interest rates have risen faster than prices have declined. It’ll cost you more to get less than it did at the end of 2021 or beginning of 2022. Prices are beginning to stabilize in most areas as well so affordability may not increase until rates come down again. Which, they should. Eventually.

If you’re an investor, having a property cash flow right now with higher mortgage rates is nearly impossible and if you’re looking for a quick reno and flip, I wouldn’t recommend it with the short term volatility in prices. It wouldn’t be a good idea.


The good news in all of this and there are still opportunities in this market.


If you are a current homeowner, currently in the market, there are opportunities to upgrade and move up to a bigger home, or to downsize.

If you are looking to upgrade to a larger home, because your family is growing, or you work from home and need more space, there is a large opportunity to actually net a higher amount that you would have 6 to 9 months ago.


Let me explain:


Prices are down about 20%. So let’s say your home WAS worth $1,000,000 at the height of the market. It would now be theoretically worth $800,000. That 20% decline seems significant but let me show you how that would benefit you.

On average, people looking to upgrade spend about 50% more of the value of their home on the home they are moving up to. So, 50% of $1 million would be a selling price around $1,500,000. With the 20% decline in prices since the height of the market, that home would now be listed for a price of $1,200,000.

So, you’ve lost $200,000 on the selling price of your home, but gained $300,000 on your new purchase. That’s a net swing of $100,000!

If you are looking to downsize, because you realized you have too much house, the kids have moved away, or you’re just tired of looking after a large yard, there are opportunities to be had there as well. For example, inventory has doubled from a year ago and you will have more choices. Plus, depending on your equity situation and what you are looking for in your next home, maybe you can be mortgage free and finally take that 1 month vacation to Europe you’ve been dreaming about!


For that first time home buyer, there are still some opportunities. Lower selling prices mean a lower minimum down payment to qualify for that first mortgage and less savings needed for the Property Transfer Tax as these are tied directly to the selling price. Basically, if you can qualify for and afford the payment, you are in a position to get in at lower prices than we have seen for a year, build equity and cross your fingers that when it comes time to renew the mortgage, interest rates will have calmed down. And, if rates don’t decrease, or they are slightly higher, then you have the peace of mind in knowing that you qualified for your mortgage at the higher stress test amount and on paper should be able to absorb the new payment (plus your mortgage balance will be slightly lower to help with that rate increase).


Is now the best time to buy real estate? Maybe not for everyone, but there are always opportunities in every market.