Buying a home is one of the most important decisions anyone will ever make. There are first homes, family homes, and downsizing homes for empty nesters, but no matter how many times you move, do it with caution.
Vancouverites love to complain about the fact that a 1,200 square foot house there will cost you upwards of $1 million. While prices are not so dire at this end of Metro Vancouver, that doesn’t mean houses are cheap, either. In fact, housing prices have increased sharply over the last decade, and even the severe recession of 2008 was a mere speedbump. In most of the Lower Mainland, the price of a house has more than doubled in the last decade, while wages decidedly have not done the same.
Meanwhile, major financial institutions are warning that the Canadian housing market may be wildly overvalued. We’ve seen this before – in the early 1980s, a sharp spike in house prices crashed abruptly.
It’s possible that this time is different, of course. It’s possible that house prices will just keep going up forever, or at least level out instead of dropping. But it’s also possible that things could go the other way.
Whatever happens, we just hope that people buying are being cautious. It’s possible to make an informed decision and to buy a home even amid an overheated market. Just make sure you don’t assume that prices will always increase, or that interest rates will stay low forever. For young buyers who have been burdened by more student loans and a tougher economy than their parents, it might seem frustrating to wait for another six months or a year to save more – but it might also be very prudent.
If you have the means and you’ve found a home you like, then this is the time to buy. But we advise caution. The only thing we can be absolutely certain about when it comes to the housing market is that nothing stays the same forever.