Buying a Home at the End of 2024.
In any market, the favourability of the conditions will vary, depending on the climate of the time. First, let’s talk about market conditions.
In non-real estate terms:
Seller’s Market. If you’ve ever tried to buy Taylor Swift tickets, you will understand. Whether the tickets are being sold by Taylor et al, or a reseller, the conditions clearly benefit the seller, thus the outrageous prices being paid. Or in other words, easy to sell, quite difficult to buy.
Buyer’s Market. On the flip side is an extreme buyer’s market. Think snow tires in Hawaii, or N95 masks a year before COVID. No matter how hard the seller tries, for whatever reason, the buyers are simply not interested. Or in other words, easy to buy, quite difficult to sell.
Balanced Market. And then in the middle, is the glorious balanced market. The seller can sell in a reasonable amount of time, and at a reasonable price, while the buyer is able to buy and feel pretty good about it. Everyone walks away feeling mostly OK.
In the world of real estate, the eternal debate is how to operate in the market conditions of the day. What makes that decision all the more complicated is when the market flips and flops from one side to the other, as it has several times in the last 5 or 6 years.
WHAT ABOUT NOW?
Looking specifically at the market today, here in the final few months of 2024, we are clearly in a buyer’s market. Why? There is record-high inventory, high days on the market (time it takes to sell), consistently sluggish sales, and increasingly favourable financing conditions.
So, if you’re looking to buy a home, here is a “How To Guide” for the last 3 months of 2024.
BUYING A HOME
Step 1: Line up those ducks. 
Prior to venturing out, regardless of the market, you will want to meet with your mortgage broker to line up any financing that you will require. Looking at houses without knowing what you qualify for, is like jumping out of an airplane, and then checking if your parachute is on properly. Perhaps extreme, but you get the point.
Once you know what you’ve qualified for, you can proceed confidently to the next steps.
Furthermore, with the upcoming changes in the mortgage landscape (such as more Bank of Canada overnight rate reductions, for example), we expect to see upward pressure on pricing. While many are reluctant or trying to time the market, considering the complete picture of how the numbers work is important.
For example:
- how do current and future rates impact monthly payments?
- how will the future amortization rules potentially change your numbers?
With prices sustaining themselves in spite of the sluggish market, it is reasonable to expect to see upward pressure as we move into the next year. Getting your mortgage ducks lined up with all of that in mind, will help set you on the best course for you and your needs.
Step 2: Zoom in.
Regardless of the market, the first step is narrowing down on what your ideal home is. Identify the key elements such as:
- Price range
- Size (square footage, bedrooms, bathrooms)
- Area
- Condition (are you OK with renovations?)
- Must haves and deal breakers
- Would be nice to haves
Step 3: Scan the market. 
Once you have those key components sorted out, have a look at supply. Is there an abundance of options available, or a scant few? The supply of your ideal home will determine your next steps.
Considering we have had record-high inventory for the past 6 months, there is a good chance that what you’re looking for is available. So, the next step is to get familiar with existing inventory. Once you’re caught up, it’s just a matter of staying on top of any changes.
Pricing. Here is where 2024 is a bit tricky. While there is no shortage of supply, there appears to be a shortage of accurately priced homes on the market. As a buyer, you and your Realtor will need to do more digging than normal, but it is time to pick your spots.
Step 4: Know what to watch out for. 
Since you are buying, with nothing to sell, you’re in a great spot. With that, there are four categories of listings that we would recommend you watch for.
- Homes that have been on the market for 30+ days and have had offers that have fallen through. Perhaps the first buyer had a home they couldn’t sell. Those sellers would love to see you knock on their door with an offer.
- Newer listings that are priced correctly. Move quick because other buyers will notice them. In a sea of listings, the gems are easier to pick out, and without a home to sell, you’ll be able to compete should another buyer show up to the table.
- Homes that get price reductions. About 30% of all active and recently sold properties have had a price reduction (as of mid October). Watch out for the seller who is chasing the market. Timing on that is everything.
- Listings with some dust on them. While the home or the price may not appear ideal, it doesn’t mean there isn’t an opportunity there. Sometimes, there is more flexibility than you might expect.
Note: a consistent trend here in the fall market is that about 55% of all conditionally sold homes in Niagara were sold conditional on the buyer selling their own home. You are in the enviable position of not having that contingency, which will drastically open your options.
Step 5: Fluid communication. 
Regardless of the category of home, this is where your agent should be getting to work for you. Phone calls, texts, and emails to the listing agents will be key. What opportunities are out there?
A sidenote. My family spent most of our summer vacations up north on Lake Nipissing. One of our favourite activites was to go out and explore Whiskey Island, a name we coined for some unknown reason. On the south side of the island, there was shallow water with polished, flat rocks. We used to spend considerable time in the water, slowly overturning rocks in the hopes of finding crayfish.
When you're looking for a home in a tricky market, sometimes you have to turn over more rocks that you'd expect, in order to find your "crayfish".
Conversations are like flipping rocks. The more your agent can have, the more likely you are to find your ideal home.
Step 6: Keep your eye on the prize. 
If your financing is locked and loaded, and you know what your ideal home is, you’re well on your way to the finish line. Just remember, there is often more to the offer negotiation process than price.
The closing date (date when you get the keys to your new home) is often a big piece of the puzzle for a seller. Are they trying to buy another place? Have they already offered on a place and the closing date is only 4 weeks away?
Knowing that 55% (+/-) of conditionally sold properties in Niagara are conditional on the buyer selling their home, the owner of the home that you are offering on may be one of those people.
If you can bring them an offer that allows them to move forward on their purchase, your offer will carry more weight than most.
Furthermore, if you can be flexible on items other than price, you will have more leverage at the offer table. For example, if you can offer a flexible closing date, and simple conditions, you may find more flexibility in the price you have to pay.
Tip: have a letter from your mortgage broker that states what you are pre-qualified for. That will help give assurance to the seller and their agent that you are a qualified, legitimate buyer.
To Sum Up.
Every buyer comes with their own unique set of circumstances. The above is a general guide, but hopefully it shines some light on a path forward for you in today's market. If you would like to discuss your real estate plans further, reach out to us anytime and we can chat.
Thank-you for visiting. :)