Money123: Timing a slow housing market

‘It’s crickets’ in some housing markets

The spring housing season is still moving at a snail’s pace, fresh data from the Canadian Real Estate Association revealed this week.

A glut of sellers in some housing markets is meeting a dearth of buyers, who are largely still held back by elevated borrowing costs.

That’s forcing some sellers to think outside the box to attract the few buyers out there in the market.

“People are definitely more open to getting creative in order to get that condo sold, because right now, the condo market, it’s crickets,” says Toronto-based real estate broker Davelle Morrison.

Morrison recently had her client deploy a “reverse offer” to lure back a prospective buyer after initial negotiation fell apart. As more time had gone by and the seller was more open to a price cut, the deal was done.

Some market watchers are hopeful that the first interest rate cut from the Bank of Canada earlier this month will stimulate the market and bring more buyers off the sidelines.

Read more on how a slow housing market is affecting dynamics between buyers and sellers.

Can you time the market?

For the prospective buyers who can still qualify in today’s market, some may be wondering when the right time to come off the sidelines might be.

Is it better to hunt now, when there’s a robust supply of listings in many markets but few buyers to compete with? Or is it preferable to wait longer for more interest rate cuts, perhaps at the expense of a higher purchase price?

Advice on timing the market varies on whom you ask, but experts who spoke to Global News for this month’s instalment of the Home School series outlined the pros and cons of waiting to buy and jumping in sooner.

Clay Jarvis, real estate expert at NerdWallet Canada, cautions that whatever decision an individual makes, it ought not to be fuelled by a fear of missing out.

“You’re weighing emotion versus your financial realities. And I think when it’s a contest between those two dynamics, the financial realities are generally going to win out,” he says.

Read more on what experts say you should consider when trying to time the housing market.

Are destination weddings in the budget?

Some wedding specialists and travel agents told Global News they’ve noticed a spike in the number of couples choosing beach resorts for their big day and at a much lower cost than the price of a traditional wedding in their hometowns.

“The demand for destination weddings has increased tenfold since the pandemic,” said Susan Gill, a wedding specialist at Escapes.ca in Vancouver.

With fewer guests usually able to make the trip to the sunny destination, experts say smaller weddings can often end up saving tens of thousands of dollars compared with a domestic wedding with a larger guest list.

Plus, the backdrop of palm trees and ocean views can end up saving a few thousand dollars that would’ve otherwise gone to decor.

Read more to find out some tips from couples and wedding planners about how to keep a destination wedding on budget.

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– THE QUESTION –

“I met my wife 30 years ago. I was living in my own home at the time but moved into her house for her work convenience. I kept my house as we still use it for pleasure use as it’s a nice rural property. Unfortunately the marriage is ending and I am moving back to my home. Can this become my principal residence again without incurring any tax problems? I never rented it out.”

— A Money123 reader 

“Tricky question! During the years that you were married, you can only designate one property per year as your principal residence. Once you’re separated, then each of you can designate a property in a year. So, before you were married, you can designate the rural home as your principal residence. Your ex-wife can also designate her home for those years. During the marriage, as a couple, you can only designate one home between you. As a result, upon separation, you and your ex should specify in a written separation agreement who gets to designate the property for each year of marriage as their principal residence. Once separated, each of you can designate your own property for future years.

Be sure to get professional legal and tax advice as this issue is extremely complex!”

– Jamie Golombek, managing director & head, tax and estate planning, CIBC Private Wealth

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