Don’t expect the hot housing market to cool down any time soon
There is no place like home — but with an increase in people applying for mortgages and almost everyone having the ability to work remotely, is it worth it to make this investment?
The spike in home sales, according to Debbie Hanlon of Debbie Hanlon Real Estate in St. John’s, N.L., is due to low interest rates.
“Right now, with interest rates being so low, it’s spurring on a lot of buyers who couldn’t afford it when interest rates were higher,” said Hanlon. “Because the rates are so low and the inventory is so good, there are lots of sales happening.”
She believes the market is going to stay where it has been over the last few years.
“If indications of the first quarter of 2022 are anything (to go by), the market is going
Hanlon. to stay optimistic,” said “The rates are low and there’s a lot of immigration. So for St. John’s and the central area, it will continue to be as good as it was last year.”
Donna Conrad, who is a RE/MAX agent for the Annapolis Valley in Nova Scotia, noted the same thing, saying that sales are staying steady and she has been getting above average inquiries.
“I think it is going to be a similar year to last year,” said Conrad. “I think economists make their predictions but we work on the ground level with people. So, I gauge it by how many inquiries we have and what the pace of people’s timelines seems to be.”
WHAT ABOUT SALES PRICES?
“In general, our market in the Valley and Nova Scotia is catching up to markets in other areas,” said Conrad.
Minor changes in the housing market could also be due to more people being able to work remotely.
“I’ve been doing this for over 20 years, and our market has always been consistent
Conrad. and conservative,” said “Since 2020, it’s been a faster pace than I have ever seen it be before, but that doesn’t mean it wasn’t at a different time. Our prices have gone up a high percentage for here but I think people are relocating to this area and I don’t think that’s going to stop.”
Although Hanlon does not see interest rates skyrocketing overnight, she does recommend paying attention to them and for people to live within their means.
“Of course, situations change, but usually the people that get in trouble bite off more than they can chew when looking for a home,” said Hanlon. “Just because you can get a home for $400,000 doesn’t mean you have to go the max. Take a look at your budget and decide what
become works so that you don’t house poor when you are buying.”
Be willing to adjust your expectations, she says.
“It doesn’t have to be your
absolute dream home,” said Hanlon. “It’s a home that you can build equity in so you can get more from the sale. So don’t think everything has to be perfect in the beginning. Live with what’s within your means and you will be much more comfortable.”
PLAN AHEAD
Paying attention to your financial situation is important, Hanlon says, especially looking ahead to the future.
“Always keep in mind if your mortgage is amortized over 25 years and it’s coming up for renewal in five years, are you going to be able to afford
that house if the rates go higher? So do some projecting of your own,” said Hanlon.
Conrad also recommends thinking ahead to all of her clients.
“Anytime that anyone is purchasing a home, they have to think ahead,” said Conrad.
That means being cautious about the price you pay for a home as well as considering what future changes for your family could mean about what you can afford.
“You always have to have a plan and I think that when you buy a house you shouldn’t be purchasing at the extreme end of what you can afford,”
budget Conrad said. “It’s hard to
for inflation but people should have five-, 10-year plans of what they want to do and where they want to be, and that depends on what age you are at and that always needs to include some plan of saving at the same time as living.”
WILL THE BUBBLE POP?
Since things have stayed relatively steady, Hanlon does not believe Newfoundland has a housing bubble that’s going to pop any time soon.
“We had a healthy year last year, but it’s not like what you see on the mainland, where you see houses sold for three times the amount,” said Hanlon. “The rates are healthy. Your average price is much lower than the average price anywhere else in Canada. I don’t think we have to worry about the housing bubble popping in Newfoundland.”
The province’s geography protects it from that sort of concern, she adds.
“I’ve been in this world 30 years; we’ve never really had
Hanlon. a housing bubble,” said “We are a world unique to our own when it comes to our homes. When Canada zags, Newfoundland tends to do its own thing.”
Conrad doesn’t see a housing bubble popping or things changing for her area anytime soon, either.
“I think that a lot of the people who are relocating here are originally from here they are retiring here, or they are working from home,” Conrad said. “I haven’t encountered anyone who is coming here without a plan.”