“Can you afford not to buy?” It is a question that is coming up with my buyers over and over again, and as always it is being driven by extremely low inventory.
The market report for March told a great tale for sellers, but a grim one for buyers. In March the average sale price across the GTA was $614,000 – which is 10% HIGHER than the March 2014 average of $558,000. Think about that for a second – 10%!! It’s a tale of two extremes for those that bought and those that waited.
Those That Bought
Joe Buyer purchased his home for $558k and and put $60k down. Now his home is worth $614k, or approx $60k more than when he purchased a year ago. That’s almost 100% return on his investment (I know this doesn’t factor in land transfer and other closing costs but I am proving a point), and it will probably be up another 10% in March of 2016. Show me another investment with that kind of return, or at least one that doesn’t involve moving massive amounts of drugs.
Those That Waited
Joe Waiter decided to let things cool down and hope for prices to come back to earth. Instead it is a year later and he is still renting, and he is now further behind the market than he was a year ago. Most people simply can’t afford to save at the rate prices are going up, and the 3 bedroom house they could have bought a year ago is now a 2 bedroom without parking.
It’s a bitter pill for most buyers to swallow, a damned if you do damned if you don’t type scenario. If you wait you end up costing yourself money, and if you do decide to jump in you are looking at a heaping dose of compromise. You may want to live on Grant St but guess what?? You can barely afford to be on Sammon Ave, or even (shudder) Scarborough.
Whether this upward price spike will continue is really anybody’s guess. In the mentime I will continue to wait it out, and keep telling my buyers about the abundant charm of Pickering.