Is 2017 a best time to own a house?


#1

Hi, I am just a newbie in real estate related things. So I thought It might be better to seek advice from an industry profound person.
I am planning to own a house near downtown Toronto by this year end. I doubt policies of new US president may affect my plan( I know he is unpredictable).
Do I need to wait or invest that money in something else?


#2

Great that you’re educating yourself before jumping head first into a big investment decision.

I’m not going to give you specific advice on the housing market, if which there are certainly more than one in the US (all houses in the entire country are not equal), just some general advice: Be careful of following any one advice. Someone who categorically claims to know how a market will perform in the future is a conman. We’re all just guessing!

I’m sure a great discussion will follow, so explore the various viewpoints further, and in the end make an informed decision on your own.

Easy, right? :wink:


#3

I don’t know much about the Canadian real estate market, but I’ve heard a lot about how Toronto prices are inflated. What really matters is why you want to buy real estate, and how much it will cost relative to your income. Can you afford to put a good amount down, and easily afford the monthly payments? If the price is cut in half, can you still keep the home? Do you have a solid emergency fund in case of job loss or the need for repairs? Are you able to secure a mortgage with a good rate, at a comfortable payment amount? Are you planning to stay for many years?

I bought my current house in 2006 in the US, right before the financial crisis. To this day it’s barely worth more than I paid for it. Over the last 11 years I’ve been able to keep this house through my husbands job loss, an extreme medical crisis, changing companies, and more. The fact that it hasn’t increased doesn’t bother me-I’m in it for the very long haul and not planning on moving. But I have friends who bought the same time as I did who lost their house to foreclosure, because they weren’t as well prepared and didn’t buy well within their means.


#4

To piggy back on what @ChiefMomOfficer said, many who bought before the market crash FREAKED out when they “lost” all that money. Really, nothing was lost if they had bought and planned to live there. I twas only lost if they bought then planned to sell soon…which beings me to my next point. Do not buy a property if you don’t plan to live there for at least 5 years. That particular suggestion may not sit well with some real estate advisers, but I speak from experience. The loss of money from closing/commission fees on the buying then selling side (especially if you buy again in a few years) usually doesn’t make up for the gains. Also, and this may be different in Canada, we pay capital gains taxes if we sell a property within 2 years of the purchase. If your life is influx (regardless of what the market is doing or who is president) it is best to rent until you are somewhat stable. Job/location/marital status are all huge factors to consider before buying.

My advice comes from a sorted love affair with real estate - as a Realtor and investor who lost all my properties in the crash. That being said, I still think RE is a great investment if done properly. Have an ample down payment, room for for financial disaster such as job loss, and a cushy emergency fund. And, as @Lars-Christian said, don’t take any one person’s advice. Take everything you can and leave what doesn’t make sense to you. Reach out at any time if you need more help! :slight_smile:


#5

If you have a decent downpayment (ideally 20% to avoid paying CMHC), have a solid emergency fund and are planning to stay in the place you buy long term (like @MissMazuma said) then I wouldn’t say it’s a bad time. I’m in Edmonton so haven’t had to deal with Toronto level prices but I would think that downtown Toronto will always be desirable, as opposed to the suburbs where you can get a brand new house right now but trying to sell that down the road can be harder when there are other brand new neighbourhoods to move too.

I would be careful investing any funds you have set aside for your house purchase though, keep it safe. The markets have been pretty unstable and you don’t want to lose any of your downpayment at this point :slight_smile:


#6

Yes, as you said downtown Toronto is the only option that I can afford.


Found this article, It says soon or later (I think within 3 years) Ontario will face a high demand for housing.
I know renting for a long period is not a good option :frowning:


#7

I would suggest that before you buy a personal residence, make sure that you can rent it out profitably in the long term. That way, if you want to (or have to) move, you won’t have to worry about a crash. I’m a real estate investor, so I do a lengthy analysis on properties that I won’t get into here. But, my point is that, even personal residences should be bought on investment numbers and not emotions. Hope this helps!


#8

It really depends on your goals and if you can see yourself owning for the long-term. If you’re job situation is solid, it may be something to look into. Though, if it’s not you may want to hold off. Also, if you think you might want to move in a few years you may have to consider the possibility of not being able to move if you can’t rent or sell your home. All in all, it depends on your situation, goals and comfort level. Hope that helps! :slight_smile: