What is a Buyer's Market?

We hear it all the time, “It’s a Buyer’s Market!” But what does that mean? A buyer’s market occurs when there are more homes for sale than there are buyers. Simple as that. In central Vancouver Island there is a large inventory of homes for sale which means there are lots of good deals available.

Why aren’t more potential home buyers taking advantage of this buyer’s market? I think it is the uncertainty. There are so many mixed messages coming from experts, many of whom clearly have no idea what they are talking about.

In Nanaimo there are more than 1,250 single family properties for sale. Less than 10% sell in a given month. In today’s market home buyers are in the driver’s seat and they have an incredible selection of homes to choose from. In a buyer’s market the buyer dictates the price.

Today’s 5 year mortgage rate hovers at around 3% for a fixed 5 year term . 60 years ago the Bank of Canada interest rate for a residential mortgage was 5%, since then it has fluctuated, usually between 8% and 12%. In 1982 it reached an incredible high of 21.46%. The present interest rate is the lowest it has been in my lifetime. If you want to buy then don’t wait for those rates to go back to normal levels.

The question is not whether now is a good time to buy a home, but why are you buying a home? The current economic climate does not favour property flippers but if you are buying a home that you plan to live in for 5 years or more, then the combination of price, availability, and interest rates makes this a great time to buy a home.

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