Top Real Estate Questions in 2023 – Answered

It’s almost impossible to time the real estate market perfectly because it never stays the same for very long. So far in 2023 we’ve seen rising prices amidst record low inventory, sales dropping, mortgage rates rising, and rising again. Now as summer draws to a close, these higher borrowing costs have yet again begun to permeate Vancouver’s housing market. We see price gains cooling and sales slowing along the typical seasonal pattern.

Up. Down. Up. Down. With these trends, some homeowners and investors are concerned about where the market is headed. Others may be wondering if now is even the right time to buy or sell a home. Or is it better to wait it out some more? Needless to say, there is confusion and anxiety amongst current and future homeowners. This blog post will help answer your top real estate questions in 2023.

SHOULD I BUY OR RENT?

Buying has almost always been favoured over renting. For some, renting is considered “dead money” as you’ll never see that return on investment. But, deciding to buy a home is a huge financial decision and you will need to consider many different factors. In 2023, the average price of a single-family detached home is $1,290,300 (REBGV) which is more than double the average price of similar houses in Canada. A seven-figure price tag has many seeking the familiarity of rent. The average mortgage payment for a condo in Vancouver is $3,150, while the average rent for a one-bedroom apartment is $2,700.

Paying rent for years will eventually accumulate to the amount a home costs right now. The real question is whether you have the money to pay the down payment. The best thing to do is to speak with a financial advisor, or mortgage broker who will be able to asses your finances and credit to help you determine if you’re better suited to renting or buying.

WHY ARE HOMES IN VANCOUVER SO EXPENSIVE?

In a nutshell, it’s all about supply and demand, and there is massive demand to live in Vancouver. Being situated between water and mountains, there is also limited supply as expansion is physically restricted by the amount of land available to develop. So there will always be an uptick in prices over time.

As for 2023, it’s worth noting that housing inventory is low in most markets across the city. This means that there are more buyers than there are sellers, which is a significant factor in driving up home prices.

SHOULD I BUY AN OLDER HOME OR A NEW HOME?

If you have the financial resources to buy a new home, or pre-build, this could be the best investment for you. You have the assurance that new(er) homes have been built with the latest amenities and current building codes, while still being under warranty. Strata fees on newer buildings will also be lower for this reason. Opting for an older home may cost tens of thousands less at the time of sale, but may come with higher operating/maintenance costs. It’s important to look at a broad range of homes in your area and then narrow down your search based on what’s available.

WHAT TYPE OF HOME CAN I AFFORD?

This not only depends on your personal finances, but also on the area in which you’re looking. 

“The rule of thumb is that you can afford a mortgage where your monthly housing costs are no more than 32% of your gross household income, and where your total debt load (including housing costs) is no more than 40% of your gross household income. This rule is based on your debt service ratios.”

https://www.ratehub.ca/mortgage-affordability-calculator

Cities like Vancouver, West Vancouver, North Vancouver, and Burnaby command high premiums, leading many buyers to gravitate toward condominiums and townhomes. Opting for location and proximity to amenities/infrastructure over living space. The further out into the suburbs that you get the more square footage you get for your buck, meaning detached-single family homes are more affordable. It’s also important to factor in your entire lifestyle as there can be either savings or additional monthly costs that can come into play. For example, what is your commute time and cost?

HOW CAN I FIND MY HOME’S MARKET VALUE?

The most used definition of market value is “the most probable price a property should bring in a competitive, open market, under conditions requisite to a fair sale”. Essentially, this is a pre-negotiation opinion of what a house should bring in its local market, i.e., its geographical area, generally an area such as a suburb or neighbourhood.

Your home’s final listing price, however, may be affected by a number of factors, and can’t be determined by market value alone. Variables such as the current market conditions and the unique properties of your home are also going to be of influence. I am more than happy to help you with the current value of your Vancouver home! Call or text me any time at 778-386-7742 or email me at info@amitmanhas.ca to start your complimentary comparative market analysis.

WHAT SORT OF TIMELINE CAN I EXPECT WHEN BUYING A PROPERTY?

There are four key milestones when purchasing a new home, which can take 7-30 days from start to finish.

1- Offer acceptance

This is where the buyer and seller agree on a price along with any other terms and conditions for the sale.

2- Subject removal date

Subject removal is the step where we successfully complete the conditions outlined in the Contract of Purchase and Sale. This includes financing and home inspection. Conditions are removed from the contract by way of addendum. 

3- Completion date

Your lawyer will contact you a few days before the completion date to sign the closing documents. Completion day is when you legally get ownership of your new home! 

4- Possession date

This is the day the keys to your new home are handed to you and you can start moving in! The seller must have all of their possessions moved out before noon on this day.

GETTING YOUR QUESTIONS ANSWERED

If you still have questions about the Vancouver real estate market, contact Amit Manhas. I have a passion for sharing my knowledge of Vancouver’s property market to help first-time homebuyers and first-time investors alike make the best decision and reach their real estate goals with ease. I’ve helped hundreds of clients achieve financial success by building a strong real estate portfolio to generate passive income – helping them spend more time with their families, work less, travel more, and pursue their passions. I’d love to help you achieve that too!