Should I Buy now or wait?
This is question that is on a lot of peoples minds right now. Is the market going to get better for buyers or is it going to stay a sellers' market for some time? I do not believe we are in a real estate bubble. We are going to see interest rates go up so buying now versus holding off and waiting for the bubble to burst is likely going to put buyers in a position of paying the same price or more but at a much higher interest rate.
The current high prices are result of a lack of inventory, not speculative buying. We are not seeing an influx of investment buyers purchasing property. We are seeing families in need of a home bidding on property and driving up the cost of housing. It is a supply-demand economy. Of the five houses I sold this January, all were families looking to move.
The lead-up to the housing collapse in the 4th quarter of 2007 saw speculation and over-extended credit as major factors that artificially inflated prices. At the time, mortgages were much easier to qualify for and that easy money brought more buyers and speculators into the market. Now lenders are taking fewer risks and are much more strict when qualifying buyers. Foreclosures in 2021 dropped to the lowest rate since 2005.
So What we are experiencing now is the opposite of 2007. We are in a market driven by scarcity. At this point in time, the market appears to be sustainable. I leave it up to you to decide if you should buy now or wait, but I believe waiting will cost buyers money due to the higher interest rates coming throughout 2022.
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Jim Perks is a Calgary REALTOR who divides his time working with both sellers of houses and buyers of homes. He has been an agent since 2010