Despite the tumultuous conditions of the 2023 housing market, HousingWire reports that buyer demand is up in nearly every region of the country. But whether they realize it or not today, five years from now, some of those buyers will wish they had kept on renting.
Low Inventory and High Rates Will Account for Most Future Regret
Although prices are still high in most places, many of the hottest markets have cooled considerably for two reasons, both of which could compel today’s buyers to wish they had waited five years from now.
Low Supply Means 2023 Buyers Could See Their Home Values Drop in the Coming Years
According to HousingWire, all 12 of America’s Federal Reserve districts are experiencing inventory shortfalls. Not only have builders failed to produce enough new construction to meet demand, but owners who locked in historically low rates in the post-pandemic period have little incentive to sell.
“With limited housing inventory and high demand, many markets have experienced significant price appreciation,” said Gary Parker, a licensed realtor in Utah and the founder of GaryBuysHouses. “Buyers might find themselves in competitive bidding situations, leading them to offer more than they initially planned. This scenario raises concerns about overpaying for a property, which could potentially lead to regret if prices experience a correction in the coming years.”
You’ll Spend Most of Those 5 Years Paying the Bank, Not Yourself
Another potential cause for regret is today’s high interest rates, which are currently around 7% for a 30-year fixed mortgage. Compared to the lucky ones who pounced on sub-3% rates in the months after the pandemic, today’s buyers have much less purchasing power, which could force many of them to settle for a house that isn’t their dream home.
And then, there’s the regret of paying so much money to the bank.
“Higher mortgage rates can result in substantial interest payments over the life of the loan,” Parker said. “Buyers need to be aware of the long-term costs associated with their mortgage and carefully assess their financial ability to manage these payments.”
Mortgages are front-loaded with interest, meaning that your early payments are mostly interest.
Even if today’s buyers refinance when rates drop in a few years, their amortization schedules will show that they paid tens of thousands to the bank while barely putting a dent in their principal.
Like Stocks, Trying To Time the Housing Market Is a Fool’s Errand
Many prospective buyers are waiting for next year, hoping that interest rates might ease and builders and sellers might add sorely needed inventory to the under-supplied market.
But the past proves that no one knows what the future holds.
Longtime real estate investor Andrzej Lipski of Next Door Properties in Connecticut owned properties more than two decades ago when interest rates were between 6% and 8%, the same as today.
“At that time, those rates seemed affordable,” he said. “I owned a property in Springfield, Massachusetts, which I purchased in 2001 for $140,000. Due to life changes, I sold it 15 years later in 2016 for $150,000. During the financial crisis, the value of the house fell as low as $110,000. Today, just seven years later, it is currently assessed at $300,000. If I had held it long-term, I would have doubled my money. It goes to show that you can’t predict where the market will go and holding long-term is more powerful than trying to time the market.”
You Won’t Regret Your Decision If Now Is Your Time To Buy
Settling for a high interest rate or paying a price that you know is inflated is a tough pill to swallow. But those are the realities of 2023 — and if you find the right house and now is when you’re in a position to buy, then this is your year.
“Home buyers will only regret buying a home if they made too many concessions,” Lipski said. “Waiving inspections or buying a house that a buyer can’t afford are the two biggest mistakes a home buyer can make.”
If you avoid those pitfalls, your prospects are good even if you’re one of the many buyers in 2023 who paid a premium for the keys to one of the few houses on today’s under-inventoried market.
“If the house is what you dreamed of, paying 10% to 20% over the asking price while still being able to afford it will not cause regret,” Lipski said. “That house over 20 or more years may likely grow in value and the memories they will make in that home will be priceless.”
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
