To say it is an interesting time to buy a house is a big understatement. Experts everywhere are talking about the increased prices in the housing market, which in some cases has led to households taking on increasing levels of debt to keep up with the rising cost of purchasing a home.
Across the country, home sale prices have risen by 25 to 30 per cent and we have seen the same thing happen here in Eastern Ontario. Many people have decided that now is the time to sell their homes, with properties spending a shorter time on the market and often selling way over asking price.
Landlords are also selling their properties, and because these are also moving quickly, tenants are often hard-pressed to find new accommodations on short notice. Rent prices have also risen significantly in Eastern Ontario during the past year.
A recent Financial Post article suggests that Canadians are stretching their finances to purchase a home and of course, that is concerning to finance institutions.
Why is this happening?
The pandemic seems to be driving people to move to the country and to small towns and of course, in this region, we have it all. The result is that in smaller markets such as this one, local buyers cannot find a home they can afford. They can’t compete with urban buyers who are selling and relocating here, with cash equity to make irresistible offers.
If you have lived in Eastern Ontario for some time, you are likely thinking that now would be a good time to sell, but I get you are also asking yourself, “Where would I go if I sell?”
Faced with higher local property prices, it’s a great time to be a seller, but finding your next property is a different matter.
If you are intent on acquiring a property for yourself today, it might be wise to think ahead a few years. Buying a home at a price beyond the home’s appraised value may present some obstacles if you want to sell your home within the next few years. The home’s appraised value dictates the amount of financing available to prospective buyers. The outflow of people from urban centres may not continue and cash offers may not be as common as they are now.
If selling your property is something you had been considering before the outset of the pandemic, the short answer is: yes, this is a good time to put your property on the market. If you are moving after living in the same home or on a rural property for decades, consider downsizing and preparing for your move before you place your property on the market. Plan for temporary accommodations if your property sells more quickly than anticipated. Think beyond selling to where you want to see yourself living next.