Buying a home in Etobicoke during a shifting market

The latest interest rate hike took the real estate world by surprise, the biggest jump since 1998. With the target rate now at 2.5%, many potential buyers are considering their purchases more carefully.

The good news is that prices are coming down, and more options are available than there have been for at least two years. You can look at multiple listings and decide what features you want your home to have.

The bad news is that rising interest rates make borrowing more expensive. Depending on your mortgage amount, the higher interest can offset any benefit of lower prices. Though real estate is still a solid investment, especially for the long term, many people are reconsidering what is most important in a home.

What should you look for when buying during a market shift?

A motivated seller or cosmetic imperfections

It took a while for homeowners to accept that they could no longer command the exorbitant prices that sellers could get back in February. Some listings have been on the market for far too long, and when that happens, prices tend to drop even more.

If you have the patience and know what to look for, you can sometimes find a house that is undervalued. It could be because the owner is motivated to sell or because the property has minor cosmetic flaws they don’t want to repair. Such imperfections could look like:

Chipped paint or marked up walls. Tired paint may make a house look worn out, but is easily fixable at a very low cost. However, watch out for cracks in the walls as these could indicate a much bigger problem with the home.
Outdated hardware or plumbing fixtures. A fancy new faucet might look appealing, but it is something you can do yourself or have someone do for you very inexpensively.
Unappealing light fixtures or chandeliers. A trip to your local hardware store can have your house looking brand new in no time.
Not superstitious? You might even consider buying a home with a stigma or a reputation for being haunted – as long as the house itself is structurally sound.

Sometimes, you can save thousands of dollars because of issues that can be fixed by anyone with a ladder and a screwdriver.

AN UP & COMING OR HIGH-VALUE NEIGHBOURHOOD

Winning in real estate is often more about the location than anything else. Talk to a local agent about what neighbourhood you should be looking in to get the best value. It could be a neighbourhood that may have once been considered “a bad part of town” but is now a thriving, upcoming community. Or it could be a highly desirable area that you know will hold its value even if prices plummet everywhere else.

In Etobicoke, you might want to consider the Queensway if you’re looking for a vibrant community where houses are still relatively affordable. If your budget allows it, homes in areas like Humber Valley and Princess Anne Margaret are very well maintained and always in high demand.

CONSIDER THE RESALE VALUE

When house hunting during a shifting market, it’s more important than ever to consider the resale value if you don’t intend to stay for the long term. So perhaps that haunted house isn’t the best value after all!

In all seriousness, however, it’s easy to be tempted to pay more for features that can lose their value a year or two down the road.

For example, a swimming pool might be very tempting, especially if you’re walking through a home on a hot day. However, always consider the resale value before you make any commitment.

Features that tend to hold value include:

A modern and well-laid-out kitchen
Energy efficient appliances and HVAC system
A finished basement
A dedicated laundry room
Outdoor decks and patios
Updated bathrooms

The prices of homes in Etobicoke may be down at the moment, but they’re not going to stay that way for long. Real estate values have consistently increased over the long term, even during the crash of 2008.