A quick look at the headlines suggests that the Toronto housing market will continue to slow down. The question is whether waiting for the market to reach bottom is a smart idea. Here are four reasons to buy now and four reasons you may want to wait.
Four reasons you should buy now
1. If prices are relatively stable. If home prices in the neighbourhood where you want to live are steady and there is no significant drop, then the only risk you take by buying now is that you miss the bottom by a small percentage.
2. If you are planning to stay in the home you buy for several years. Unless the entire world’s economy goes into a tailspin, most economists agree that if you buy now you will come out ahead when the market rebounds.
3. If your current rent payment would equal a mortgage payment. If you are able to buy now, you will be building your own equity rather than paying your landlord’s mortgage through your rent payment.
4. If you have found the perfect home in the right neighbourhood. You have been looking long and hard and you realize it’s going to be difficult to find another house just like this one. Everything is to your liking including the schools, neighbours, etc. You also know that if the market were brisker you definitely would have a lot more competition from other buyers.
Four reasons you should not buy now
1. If your job security is uncertain. If your company is laying off employees and your industry is in distress, then you are better off waiting until the smoke clears.
2. If you do not intend to stay for at least five years in the home you want to buy. If the market continues to dip, it may not make financial sense to own for a short term.
3. If you don’t have good credit or a sufficient down payment. Do you have a good credit history and can you document your down payment? Following the subprime scare, banks have become much more careful about the mortgages they provide.
4. If you have an existing home to sell in an area where prices are dropping. In this case, you’re probably smart waiting until the tide turns.
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