In my daily newspaper readings I stumbled on a great article in the Globe and Mail from June 28th titled “6 signs it’s time to buy a house.” By Janet Fowler. Obviously I like it. It is in my best interests and the interests of the selling clients that I represent to have everybody in the mood to buy a house! However, when reality kicks in, it is clearly not always the right move for everybody at the same time. Fowler outlines a few brief yet effective questions that you should answer to assist you with your decision.
Fowler outlines a six step guideline to check against your current situation to ensure that if you have been thinking about buying a home, now is the right time to do so. She raises some good points. To read the full article go here: (http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/six-signs-its-time-to-buy-a-house/article2070891/) I’ve taken a few of the points that Fowler makes and applied them to the current state of Dawson Creek real estate. Her suggestions are poignant for this time in our market.
The most compelling reason for purchasing property in Dawson Creek is that it still tends to cost considerably less to own a home than it does to rent. A typical three bedroom home in reasonable condition in Dawson Creek rents for a minimum of $1500 per month. If you put that home towards a mortgage at current interest rates – say the 3.79% currently advertised by Invis – you can purchase up to a $275,000 house comfortably, including your taxes and insurance. $275,000 still gets you a lot of house in Dawson Creek. You would be shopping for a 5 bedroom family home in a good neighbourhood with my updates already in place. If you plan on staying put for a while, this factor alone should influence your decision to make the move into home ownership.
However, it is important to look long at hard at how ready you are to commit to home ownership. Ownership will dramatically affect your mobility. There are many costs associated with buying and selling a home. Make sure that you are ready to commit for at least a few years.
Another point made by Fowler that applies here in Dawson Creek is that we may be entering into what is known as a buyer’s market. We’re getting very close to the end of the second quarter of 2011. Though we don’t have the numbers in quite yet (watch next week’s column for the facts about the market over the past three months) we can see that relative to last year the market has cooled a bit. Listings are up up 19% relative to last year and sales are down close to 25% over the past three months. Of the 218 homes on the market 51 of them have dropped the price lately. That means that as a buyer, you have many options to select from and not a lot of competition out there. These circumstances can change in a heartbeat as people pull their homes off of the market or more buyers move in to take advantage of the favourable situation so if you’ve been on the sidelines for a while, this could be the time to make your move. 51
Low interest rates continue to be a strong incentive to buy a home right now. Today’s rates will (I found a best 5 year fixed rate of 3.79%) not be around forever. It is worth it to take advantage if you think that you may be purchasing at some point this year. A pre-approval at most banks will lock in today’s rates for up to 120 days in some cases.
There are many reasons that move people from the sidelines to actively seeking to purchase a home. If you are one of those people in Dawson Creek today, high rents, a favourable buyer’s market, and low interest rates are very compelling reasons to make your move sooner than later. As we all know, markets can shift in a heartbeat.