Is it possible to determine the best time to buy or sell in the Victoria real estate market? Obviously, personal finances play a huge factor in terms of down payment, affordability and risk. If you the have the luxury of waiting – is it worth it?
Unlike the stock market, housing prices are slow to react to interest rates – with sale prices often taking months to years to reflect rising or dropping interest rates. A sustained period of lowering interest rates (such as 1990-93 and 2001-04) caused prices to rise. Conversely, a sustained period of increasing interest rates (such as 1981-84) causes prices to drop. The past 5 years of interest rate (and economic) uncertainty has resulted in a relatively flat market. When a glut of new listings come on the market, there is a delay in any price drops – particularly if owners are reluctant to sell for less than what they paid. (Perhaps this is what we currently see in Calgary?)
A first-time buyer approaches the market differently than an owner who wants to sell their current residence and then buy a new place – moving up the “property ladder”. When moving “across” the market, does it make sense to ever wait? How about someone who is selling their home in a city with “peak prices” (such as Vancouver or Toronto) and moving to Victoria where prices remain comparatively low? Maybe then is makes sense to hurry up and sell?
Hindsight is always 20/20, so it’s easy to look back and see when there were good buying opportunities (1969, 1986, 2002). The question is …
Is it possible to look ahead and predict a good buying opportunity? What do you think?