Wondering what might happen in 2022? Should you sell? Should you buy? Well, according to CREA 'Sales forecast to moderate somewhat in 2022 but tight supply conditions are expected to continue to push prices higher' .
So, what does that mean?
Well, this means that the sale prices of homes are expected to plateau out a little (meaning not drop or rise but stay fairly steady), likely in the beginning of the year and then as inventory (homes) are in lower supply, the prices will more than likely rise again.
Especially with COVID-19 remaining a looming frustration; keeping us working from home, lots of people are still eager to buy because they no longer want to rent, are worried about their Landlord selling the home or they just want more security if an economic collapse happens. So, the biggest security for people is owning their own homes. However, many single home owners who don't own multiple properties are not rushing to sell for that same reason! This means that the supply is getting smaller as the desire to own is growing. This is where people become desperate and begin paying thousands over asking.
Selling? GREAT! Now is the best time to do so! As a continued rise isn't guaranteed, prices are at an all -time high. More so, the prices are not going to dip, its just not forecasted whatsoever. This brings me to the Buyers Dilemma, People keep saying 'I'm just waiting for the market to crash' & no offence, but these people don't really know what they're talking about (in the Canadian Market at least). Here's why it sounds silly...
When it comes to the last 'Market Crash' that everyone talks abut in 2008, it happened in September of 2008 when the United States Stock Market crashed. First of all, let me just point out that the crash had been set in motion in 2006 and escalated until it crashed - it was forecasted to happen. Economically it was seen to be coming. As a result of this crash a lot of people lost their jobs, investments- and thus, a lot of money! This leads to people not being able to pay their bills.
So sure, this could happen in Canada right? Except one thing. The banking systems.
In America, the banking systems (mortgages, banks, lending etc) is privately owned, operated and for the most part run. In Canada we have something called CMHC & its government mandated. Unlike our American neighbours, we are protected.
CMHC is the reason we won't have a housing market crash. Simple.
CMHC is a government mandated program that requires mortgages to not be given out unless Home Owners / Buyers meet certain IMPORTANT criteria:
You must have at least 20% downpayment in order to buy your home & not pay into CMHC. If you don't have 20% down then you are at a higher risk for not being able to afford your on-going mortgage payments if an economic crisis occurs, if you DO have 20% down then you demonstrate financial security, thus being able to afford your home payments should the country have an economic collapse.
If you have 5-19% down, you are required to pay into CMHC. CMHC is a mortgage insurance program, so should you not be able to pay your mortgage, this protects the bank's interest, so if you have to default on your loan - and 100 other people do too, the bank's don't go under - aka leading to a housing market CRASH.
Since our market is government regulated and protected, we don't see people who can't afford a home or don't have the credit for a home buying - this means that only those who can demonstrate financial security can buy homes. Buying a home is a large investment and not everyone should be able to do so. The reasons that they push out mortgages in the United States the way that they do is because they make money on those mortgages and while we do here as well, since there is no mandates against any of it, many people are moving numbers around etc to make sure someone 'qualifies' for a mortgage and they may really not actually have the financial security for it.
So, when someone tells you that they are waiting for a housing market crash to buy - tell them that the prices are just going to increase, not fall. They aren't going to see a housing market crash here in Canada. Sorry about your luck.
So, buyers, now is the best time to buy because the prices will only rise.
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