How a buyers’ market actually benefits you

Deciding when to buy or sell a house is always tricky. It often occurs when the time is convenient for the seller, not when the time is right. Since people need to move, start new jobs or the weather will turn nasty shortly, home purchases and sales are done whenever they can be. November is shaping up to be a good time to be buying a house, but maybe not to be selling one. The Calgary housing market is oversaturated and the overall average cost of a house has been on the decline for the past five months, dropping 2.9 per cent in a year-over-year decline. Whereas this is not great for property sellers, potential property owners are now in control of this buyers’ market.

A buyers’ market is described as a real estate market resulting in more homes for sale that are actually being sold. A general rule of thumb states that a buyers’ market occurs when the number of properties sold dips below 12 per cent of the number of properties for sale. This scenario is actually great for you as a potential property buyer and here’s why:

  • Options, Options, Options: The most obvious benefit to you is that there are more options to choose from, allowing you to look at better properties for (generally) lower prices. Since there are more properties for sale on the market, you will often see owners lower their asking price if the home is still for sale in a few months.
  • More Affordable Mortgage: This is often the most important benefit to home buyers. When the overall cost of homes is down, you can save thousands of dollars on your purchase price and even more on the interest that would have accrued over the course of the mortgage.
  • Jump on the Trend: Even though you may not be looking to buy a new home to live in, a buyers’ market provides a great opportunity to purchase an investment property. An oversaturated market doesn’t just encourage individuals to buy more property, but real estate companies and investors also start to scoop up more homes in hopes for higher resale value once it moves into a sellers’ market.
  • Insulating Mortgage Laws: Since the economic crash in 2008, Canada now has new mortgage laws stating that new home buyers must put at least 5 per cent of the total purchase price down and purchase mortgage insurance if they put down any less than 20 per cent. These new laws and many more were put in place to deliberately protect Canadians from anything like that happening ever again.

A buyers’ market really does benefit you, by providing more property options, generally at lower rates, in a country that is working to protect you while you invest large sums of your money into an asset. Whether you are looking to move in the near future or simply invest, we recommend checking out the Calgary real estate market during this buyers’ market.

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