Expectations Vs. Reality: A Home Buyer’s Guide to Being Realistic
Being realistic is often difficult for people looking to buy a home in Vancouver. I often joke with my clients about building a time machine for them, but I’m not too sure I’d be willing to share it if I could. If you look at the history of Vancouver’s house prices, as an example, they have almost tripled in the last 10-12 years. A very limited supply plus an incredibly high demand has pushed the single-family home out of reality for most real estate buyers, unless the Bank of Mom and Dad steps in. The condo market isn’t far behind, but it is quite a bit more reasonable for the average person. In short, if you bought in Vancouver a decade ago you are pretty much set up for life. If not, you need to be realistic.
These realizations don’t do a heck of a lot for those looking to buy in Vancouver now, especially if you are buying for the first time. The desire to live in Kitsilano two blocks from the beach is a strong one in Vancouver, as is living in Yaletown walking distance from work, or living on the Drive within your East Van community. But these prime locations come with a prime price tag these days. You can’t expect to buy in Vancouver with a Maple Ridge budget. Don’t even expect to buy on the West Side with an East Side budget – it just doesn’t happen. Being realistic requires patience in searching for the right home and a true understanding of the market.
It’s always a good idea to remember that some neighbourhoods might not seem all that attractive now, but will likely be developed over time to become great areas. Look at Main Street. Fifteen years ago it wasn’t on anyone’s radar; it was a prime area for drug crime and prostitution. Now it’s a buzzing neighbourhood and a very popular area for real estate buyers, and long gone are those dark days. Is Hastings the new Main Street? Many people think so. Generally the West Side of the city is already very much established, but there could very well be other areas on the east and south sides of the city that will experience a renaissance as buyers increasingly get priced out of the prime areas. Now is your chance to get in on the ground floor in those areas. Your money will go much further, and you’ll have the chance to watch your neighbourhood grow and your home value rise.
Owning real estate is almost always a better financial decision than renting, so it should always be explored if you are capable of doing so. While it’s more expensive to begin with, leading up to the end of your 25-year mortgage your monthly bill drops dramatically with the mortgage payment going all the way down to $0. If you kept renting, you’d still be paying increasing rent costs every month. Add to this the fact that you also now have an asset worth hundreds of thousands of dollars, in case any sort of emergency hits your family, and it is very much worth the expense you incur during the life of the mortgage.
The only time buying real estate isn’t such a good idea is when there is the possibility of a bust in prices. Even though the local market is often seen as a bubble by many, the fundamentals are actually very strong and look to continue that way as long as there are no large changes in the local economy, immigration patterns or your employment. Buying real estate is almost always a good idea.
The Vancouver market comes with a lot of cache but also a lot of very real concerns. When you are looking at purchasing a property, do you want to avoid over paying? Do you want to ensure you are buying a home that will hold its value as long as possible? Do you want to get the best mortgage rate? Do you want to know if you are buying into a building that has a history of problems? If the answer is yes to these questions, be realistic and use a qualified real estate agent and team of professionals to help you.