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Condominiums
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Purchasing a new home is a big decision, so it’s easy to understand why many homebuyers are hesitant to make a move during a pandemic or time of economic uncertainty. But while we can’t predict what lies ahead, there are a number of reasons that now could be the perfect time to make that big leap. We sat down with our CEO Dave Gladney to get his perspective on the current landscape and why it might be a better time than ever to buy a new home.
“There are two main reasons that now is a good time to buy,” says Gladney. “First, the prices for new homes are very low, and second, the cost to borrow money has never been lower.”
Interest rates were already low before the pandemic, but the Bank of Canada has cut the rate twice in March 2020 in response to the crisis. This creates an opportunity for buyers to borrow with some of the lowest rates in a decade.
Home prices in Calgary and Edmonton have also remained low for a number of years, and lower overall demand has generally pushed things into a buyers market. In addition, the COVID-19 pandemic has slowed overall transactions in March, a trend that is likely to continue until social distancing measures are lifted.
While a lower home market might mean you get less for your current home, this can actually work to your advantage, explains Gladney.
“The best time to buy is when the market is down. The resale housing market and new home market move together. So when people say ‘my home is worth less than it was a year ago’, so are new homes, and the difference required to upgrade your home is always less in a down market."
Here is an example of how this works.
“That’s $20,000 less than if you purchased when both homes were worth in an up market,” says Gladney. “This example will work every time and the higher the price the bigger the savings will be. That’s why Warren Buffet says ‘buy when everyone else is selling cause it’s really the best time.’”
“It’s impossible to say when we are at the bottom, but we do know we are on the right side of the buying curve” Gladney emphasized. “The only way to know when the market has bottomed out is when you see a price increase and by then it’s too late.”
At Morrison, we’re striving to balance our passion for building quality homes and positive building experiences with our commitment to keeping homebuyers, customers and staff healthy and safe. Read more about our response to the COVID-19 pandemic. While showhomes are still open to the public, showings are completed by appointment only. Please get in touch with us for more information or view and shop our homes online!