All the whining about the cooling housing market has real estate agent Leah Bach hot under the collar.
Is it time for the pundits to admit the real estate (ahem) bubble isn’t popping? In fact, it’s deflating so slowly that sellers are reluctant to adjust their prices to reflect actual market conditions. I mean, really, if you have read the Greater Fool blog for any time (which is “not” investment advice, by the way – read the disclaimer.) then it is really, truly, finally, this-time-I-mean–it time for the bubble to burst.
The reality is we are in a cooling market. Some areas in the Lower Mainland are cooling more than others. Vancouver’s formerly red-hot market is losing its heat and, as the adage goes, most of us are not investors. We are homeowners. What we lose in one market, we gain in another. Very few people win on both the buyer and seller end. So if the housing market tumbles, yes, I will be sad as well. But I will know that my purchasing power is exactly the same as everyone else’s.
Now you can blather on about how I’m not an economist, but I also don’t make my money writing and selling advertising and books. But I can tell you this: No one predicts bubbles and that’s why they are largely unforeseen. Hindsight is . . . well, often too late.
The ripple effect of the Asian buyer is gone. Interest rates are low with no sign of increase. The traditional spring season is in full swing and all we have is a bunch of home listings priced based on last year’s market and they are stagnating. And then we are back to simple supply and demand. When more product is available, there is a downward pressure on prices. The market is making its slow shift from benefiting sellers to buyers. And regardless of anecdotal differences between one sale and the other, people need to be realistic and work with where the market is now.
So, where does that put you? Are you selling? Then your options should be balanced between the price you want, what the market will support and the speed with which you want to achieve your move. Period. No really, that’s it. Are you buying? How quickly do you need to move and how perfect is what you find? How budget appropriate is it? If it meets all these criteria, then pull the pin and negotiate hard.
Unaffordability is a myth. Plenty of people can afford real estate and those that can’t rent and those who really can afford it rent to others. I didn’t graduate from high school expecting to buy a house like my parents’ home. I worked, saved and bought whatever place I could. My first place was a foreclosure – the ugliest house in the best neighbourhood I could afford. I was five months pregnant and found myself digging for drain tile because when you are young, you have time and energy and likely little money. We made over $300,000 on our first sale. Appreciation value and hard work paid off for us.
So, save me the song and dance. Yes, the market is cooling. Don’t overspend, don’t over commit. Buy what you can afford within realistic expectations of job loss, tax increase and death. The reality is we all don’t always win. Sometimes we lose and sometimes we lose worse than others. But often if you plan better, you can do better.