Written by Miguel Fernandez Morales | Published on September 5, 2024
If you've been sitting on the fence about entering the real estate market, now may be the best time to buy a house.
Over the past few years, mortgage rates have been steadily increasing, making it more challenging to qualify for a mortgage. Many homeowners, particularly those in the construction and real estate industries, have been affected by job instability. Others, who were able to secure a mortgage when rates were at historic lows a few years ago, are now facing renewal dates that could significantly increase their monthly payments—sometimes even doubling them. This is forcing some homeowners to sell because they can no longer afford their new payments.
We're currently seeing a 20% increase in power-of-sale properties in the Greater Toronto Area (GTA), with more homes coming onto the market daily. The condo market alone has 36.5% more units for sale compared to last year, while transactions have dropped by 19.8% over the same period. More inventory means more choices for buyers, less competition, and stronger negotiating power—particularly since some sellers are highly motivated to sell quickly to avoid foreclosure.
Additionally, the Bank of Canada has begun to slowly reduce mortgage rates, and many major banks are forecasting further rate cuts this year and next. Historically, whenever mortgage rates drop, real estate prices tend to rise. We expect the market to pick up soon, with a very active spring in 2025.
The secret to success in real estate is to buy when others aren't buying and to sell when others aren't selling. Right now, there are relatively few buyers in the market, which means less competition and a greater chance to secure the best price. Don't wait until next spring, when more buyers will be looking to take advantage of potentially lower rates, creating more competition and driving prices up.
While fall is generally more active than summer, the market tends to cool down as winter approaches and the holiday season begins. This period can present more opportunities for buyers, as many sellers are motivated to close before the new year and may offer better discounts to the few buyers active at that time.
My advice: Buy now, before prices and competition soar again. If you're looking to sell, consider waiting until next spring when the market is expected to be much more active.
If you're interested in selling and buying, give me a call, and we can develop the best strategy for your specific situation. Contact Miguel Fernandez Morales at 647-894-0553 or visit www.yourfamily.incomrealestate.com.