Don't get spooked by housing market headlines

By Lydia McNutt
October 22, 2014

It may be Halloween, but if you’re getting into the housing market this fall, this is not the time to get spooked by headlines and market predictions.

My family recently went through the exciting and nerve-racking experience of selling and buying a home. Luckily, my aches and pains of hosting open houses were short-lived. So was the sweet relief of seeing that Sold sign on my front lawn, which was soon replaced by fears of buying the right home with everything on our must-have list – budget and timing included.

In a casual chat with a real estate agent about our plan – selling our home first, then buying – he advised me to take the reverse route and buy first. “It’s a sellers’ market,” he said. “Selling won’t be the problem, it’s buying that you should be more concerned about.”

Housing market can be hard to predict. Buyers and sellers are better off making their real estate decisions based on their personal circumstances, rather than the headlines.

Well, the agent was right on one count – our house sold in a matter of days. But buying before selling? While the idea of taking our time to house hunt, pack and move appealed to us (my husband are I are both meticulous planners; we had our whole wedding timed, right down to the minute!), the possibility of paying two mortgages simultaneously, or settling for less than list price on our home in the interest of a quick sale, were certainly not in the plan. Ultimately, our comfort level dictated that selling before buying was the way to go. This approach gave us the security of knowing exactly how much equity we had to put toward our new house, and eased any fears of getting stuck paying two mortgages. To us, this peace of mind was worth the risk of possible bidding wars and being beaten out by a bigger, better offer. In fact, we almost expected that scenario. After all, it is a sellers’ market, right?

While it’s a good idea to pay attention to the headlines and all the accompanying advice – professional and otherwise – take it with a grain of salt. You can never really predict what will happen in the housing market, though many may try. Experts make educated guesses based on trends and actual data. But while the picture may look a certain way from a national, provincial or city-wide perspective, what happens from one street to the next, from one price range to the next, can differ dramatically. Then factor in your own individual circumstances – family, job, finances. Your guess as to what the housing market holds in your specific situation is very possibly better than anyone’s.

Housing market reality versus your reality

Is it a buyers’ or sellers’ market? Will prices rise or drop in the next few weeks while you search for the best home and the best deal? What will happen to mortgage interest rates in the short term? Should you buy now, or wait until this feverish frenzy blows over? Rather than losing sleep worrying about things you can’t predict or control, think about your own circumstances and plan your future based on your personal facts.

Take an honest look at your financial situation. Review your assets and debts, including mortgage (current and expected payments), car loans, lines of credit, student loans and other bills. Are you secure in your job? Are you planning to grow your family? Will you be taking parental leave from work, and if so, can you afford to pay all your bills on your now-decreased income? Once you figure out what your reality is and where your comfort level lies, you’ll be better equipped to make a decision without being scared off by that recent report you read on the housing market, or that story you saw on the six o'clock news.

The key message? Buy when you’re ready for the housing market, not when the housing market is ready for you.

About Lydia McNutt

Lydia McNutt is an award-winning writer and editor.

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