Last week, the Bank of Canada announced its latest interest rate hike. This is expected to be the final rate hike for the foreseeable future.
This has caused a lot of Niagara buyers to wonder if local real estate prices have bottomed out. And while I do not have a crystal ball, I can say with certainty that…
Now is a great time to buy a home in Fort Erie.
This is also true of surrounding markets, such as Ridgeway, Crystal Beach, Stevensville, and Port Colborne.
According to data shared between ITSO member associations, the median sale price of an Ontario home dropped from $875,000 in February of 2022 to $640,000 in December of 2022. That represents a decline of 26.1 percent in a single year.
Prices have followed a similar trend throughout Niagara Region.
Note: The benchmark price to buy a detached home in Greater Fort Erie this past December was $522,700.
At the same time, interest rates have climbed rapidly. Mortgage rates offered by TD, for example, went from 2.94% in January of 2022 for a five-year, fixed mortgage, to 5.54% in January of 2023.
While this may all sound like bad news, please consider the following:
Jan. 2022 | Date | Jan. 2023
$700,000 | Purchase Price | $517,300
$140,000 | Down Payment | $103,460
2.94% | Interest Rate | 5.54%
$2,633 | Monthly Payment | $2,536
Same House & Lower Monthly Payment
You can purchase the same house you might have bought just one year ago for about 26 percent less. And even though interest rates have risen, the amount you can expect to pay per month for housing has decreased slightly.
Lower Down Payment
In the example above, I used a 20 percent down payment but, in most cases, all that is required when purchasing your principal residence is 5 percent. Coming up with the down payment has always been the most difficult part of purchasing a home, especially for first-time buyers.
Lower purchase prices mean lower down payments and less cash needed upfront to close.
More Homes to Choose From
Just one year ago, there were only a few dozen homes on the market in Fort Erie. At the time I am writing this, there are almost 250. This means the likelihood of me being able to find you a suitable home has increased significantly. And with homes sitting on the market for longer, there is less pressure to make a snap decision to purchase.
Potential to Negotiate
There are some deals to be had out there!
A year ago, bidding wars were commonplace. Home inspections and other buyer conditions were almost unheard of. Now, according to the Niagara Association of Realtors, the average home is selling for roughly 96 percent of its asking price. With so many more homes on the market and prices on the decline, buyers and their agents often have the upper hand in negotiations.
So, what’s the bottom line?
Call Me to Get Started
Despite the rampant doom-and-gloom in the media, the vast majority of Canadians still believe that home ownership is an excellent long-term investment.
If you are thinking about buying a home in 2023, I would encourage you to start by reaching out to one of these trusted mortgage professionals:
- Irma Sebastiano | 905-321-9396 | irmasebastiano@vhme.ca
- Troy Wilson | 289-213-2222 | troy@wilsonmortgages.ca
- Erin Levionnois | 905-341-5093 | info@erinlevionnois.com
Get yourself pre-qualified for mortgage financing, then call, text, or email me to begin the search for your next home.
Brent is a sales representative with RE/MAX Niagara Realty Ltd., Brokerage. He’s the host of The Fort Erie Podcast and proud to call Fort Erie his home.