By Diti Dumas and Morgan Dumas
We ended 2009 much better than most people expected, especially with the concerns in the real estate market. At the beginning of 2009, there was not much activity; needless to say, the real estate market was looking grim for most. That soon changed, and we began to see record breaking months in activity, which included November 2009.
Now with average prices increasing every month, the question that arises; is it the right time to buy?
To answer this question, you have to consider what compels you to buy.
First, you have low interest rates, which as you may already be aware of; are at an all time low. These rates will not be around for much longer. It is anticipated to see them go away by the middle of 2010, when the central bank increases its overnight target rate.
Now the second point you must consider is that there should not be as many bidding wars occurring as we will see an increase in inventory compared to the past few months.
Many of you might know this, but what has helped the turnaround in the real estate market these past few months is the fact there were less houses for sale (low inventory increased bidding wars). The reason for this is that home buyers had to deal with fewer houses, and if they were in need of a house or they wanted to be the first to take advantage of the low rates, then they made their move on the best that was available.
Despite Canada being in a recession, those who were not financially strained made their move on the real estate market quickly.
As the months went on, we began to see more people decide to purchase homes, and as a result we began to see many bidding wars occur.
For 2010, this should happen less frequently as there is an increase in inventory, home buyers will not have to fight over what is available and they will be able to search through and find the home of their choice, rather than taking what they can.
Prices for homes should peak soon at this point as the bidding wars become scarce; therefore, you do not have to worry as much about over paying for a house.
With these facts in mind, this may be the time to begin looking for a home to purchase.
Diti Dumas is a Sales Representative with Royal LePage R.E.S. Ltd./JOHNSTON & DANIEL DIVISION, Brokerage. Diti is a regular contributor to the Muddy York Blog. Diti’s website is located at www.ditidumas.com.
Morgan Dumas is an aspiring writer and journalism student from Ryerson University in Toronto.