A Quick Overview
It's no secret that the housing market is in a state of flux. The days of bidding wars and skyrocketing prices are over, and we're now seeing a slow, steady correction that could last for a while. If you're planning to buy or sell a home during this time, it's important to be aware of the risks involved and take steps to protect yourself. Here are the 5 biggest mistakes you could make during a housing market correction!
1. Not being aware of the current market conditions
The first step to avoid making costly mistakes during a housing market correction is to be aware of the current market conditions. Pay attention to news reports and talk to your real estate agent to get a sense of how the overall market is performing. This will help you make more informed decisions about when to buy or sell. It will also give you a better understanding of what to expect and what is realistic. If you are selling while the market is cooling off, it’s possible that your current expectations might be a few months behind the current market. Stay up-to-date so you don’t get caught two steps behind!
2. Failing to properly research the market
If you're not familiar with the current market conditions, it's important to do your research before making any decisions. This means looking at data and trends over time, as well as getting insights from experts in the field. Once you have a good understanding of the market, you'll be in a better position to form realistic expectations about prices. As a buyer you may have big expectations about how much of a discount you can expect. While you might be right in the medium term, you’ll want to know what the market is doing right now so you’re not jumping the gun.
3. Overpaying for your home
One of the biggest mistakes you can make during a housing market correction is overpaying for your home. This often happens when buyers get caught up in the heat of the moment and pay more than they can afford at the peak of the market. The tricky part here is that no one ever knows where or when the market peak will actually be. To avoid drastically overpaying, it's important to have a clear budget in mind before starting your search. This will help you stay focused on properties that are within your price range.
4. Not negotiating the right price
If you do find yourself competing or otherwise paying more than you'd like for your home, don't be afraid to negotiate. Many sellers are open to negotiating, especially in a market correction. If you can't get the seller to budge on price, there are other ways to negotiate, such as asking for closing costs or repairs to be covered. However, keep in mind that if the market is in a confirmed downtrend you don’t have to buy the first place you find. If seller’s are too stubborn to reduce prices right now, that could change in a month or two.
5. Failing to plan for the future
Another mistake that buyers often make during a housing market correction is failing to plan for the future. Just because prices are down doesn't mean they'll stay that way. If you're not prepared for a market rebound, you could end up losing money on your investment. It's important to have a long-term outlook when buying in a market correction and be prepared for the possibility of prices going up again in the future. In other words, don’t panic if the market goes down. Most people are better off holding onto their property in a market correction than selling when prices are down.
By following these tips, you can avoid making costly mistakes during a housing market correction. If you're aware of the current market conditions and do your research, you'll be in a better position to make informed decisions about buying or selling. And if you do find yourself in a correcting market, don't forget to negotiate!
If you're thinking of buying or selling a home in the near future, I can help. I would be happy to answer any questions you have about the market or assist you in finding the perfect property. Contact me today to get started!
I am a Victoria based local realtor with eXp Realty. My commitment to honesty, integrity, loyalty and hard work have been important pillars for me because they drive a high standard of excellent service for my clients. Helping you realize your dream is my goal!
I service Vancouver Island, but my focus is on: Victoria, Sooke, Saanich, Malahat, Shawnigan Lake, Cobble Hill, Duncan, and the rest of the Cowichan Valley.