Jay Mcinnes

Mobile: 604-771-4606


Buyers With Patience LOSE!

Buyers with Patience LOSE!
Nobody likes to lose money. That’s the truth and you’d struggle to find somebody who would disagree. So how does this have anything to deal with Real Estate?

If you’re a patient buyer, also sometimes misconstrued as a ‘savvy buyer’, even though the two are very different, you are in very serious danger of having money stolen from your wallet. The crazier thing about this, is you're the one stealing it from yourself!!
To understand this, you need to understand the meaning of patience here.

Patience IS NOT your friend. Let’s explain this further. For example, you may give yourself three months to purchase a property. It could be purchased on day one, or the end of month three, but the goal is to buy a property in that period of time. This is just called smart buying. You have a strategy and a timeline to stick to, with the desired goal of achieving a home at the end of it.

We’re specifically talking about the “We’re not in a rush to buy, we’re happy with waiting for the market to come down” type of people. These are the people who believe patience is key. They are also the type of people who believe the market is going to collapse 30% in the middle of a sellers market.

Don’t believe us, then take a look at the example below, comparing average detached housing prices in Greater Vancouver in July 2010 vs. Today:

Vancouver East  
July 2010 $775,037
July 2020 $1,624,710 $533,333
$ Change $849,673

Burnaby North
July 2010 $819,633
July 2020 $1,794,430
$ Change $974,797

Port Coquitlam
July 2010 $504,833
July 2020 $1,038,166
$ Change $533,333

On top of the above, these figures are all based upon standard sized detached lots. They are also all SOLD prices. So what people have actually committed to paying, as opposed to over inflated listing prices.

Please take a look at the above table again. Your patience boils down to costing you the equivalent of $84,967 a year in East Vancouver, TIMES TWO! Why the times two? Well if you had purchased a year earlier, on average you would have paid $84,967 less, on top of building that same amount in equity. But if you didn’t buy, you’re paying that amount extra to purchase, and you didn’t own anything to build that same amount of equity in. But sure, you go ahead and be patient ...  

That’s a HUGE amount of money. More importantly it’s equity you are missing out on. For literally doing nothing. You are paying your mortgage and building this amount of equity on the side for nothing.

Let’s just keep it really real here, in the same way savers are losers, patient buyers are also losers.
Taking that same East Vancouver example, the market increased over 109% in 10 years. That’s 10.9% a year. So your ‘patience’ requires the market to drop a minimum of 10.9% just to break even. The longer this goes on, the more ridiculous this gets:- 5 years would see an increase of 54.5% in market value. So now you’ve waited 5 years and you think the market is going to drop 54.5% ?!?! That amount is also just to break even!!

You can look at whatever statistics you like. Skew them whichever way you see fit, but you won’t be able to escape the fact that every year you don’t own property, you are short changing yourself, as clear from the above table.

The so-called ‘downturn’ people were waiting for happened in 2018, and lasted all the way till July 2019. You were GIFTED a chance with Covid-19 coming to play and slowing the market, almost to a stand still. Numbers are picking back up all over Canada. In fact, CREA recently reported July 2020 saw THE MOST HOME SALES EVER RECORDED IN ONE MONTH SINCE RECORD KEEPING BEGAN OVER 40 YEARS AGO!!!!

Please just absorb that for a second. All the market haters out there right now say we are not done with Covid affecting our real estate …. Yet we just recorded the largest home sales across Canada in one month EVER. 

Since May, Vancouver Real Estate has been rebounding strongly, so we’re quite literally seeing the opposite trends happening that require prices to drop a little, let alone the 20 or 30% some are hoping for.

It cannot be understated enough the point we are trying to drive home here - Even if the market trends downwards, it will not fall far enough to make your patience worth it.

Another harsh reality to all those reading this is, the market will not wait for you. Apply your pseudo-science, tell yourself whatever story you like, it really makes no difference. In 10 years time you will just be looking back, angry at yourself for not pulling the trigger and getting into the market then. You probably won’t even remember the stories you told yourself then, you’ll be too scorned at your own mishap. You’ll be stood there with nobody to blame but yourself, which is a hard pill to swallow!

A note to those out there saving money to purchase. We don’t mean you when we talk about patience. We’d never recommend you bite off more than you can chew, especially with a mortgage and such a long term commitment (remember, real estate should be looked at for the long term.) Keep working hard and saving to get you to a point you can comfortably afford your payments. If you can’t be sure of covering your monthly payments, it’s not a good time to buy! Understanding that’s the goal vs. lying to yourself about the market plummeting to justify your own mishaps, are two very different stories.

Being blunt is needed sometimes. You need to get the message through and we hope it’s understood. The two best times to buy real estate are 10 years ago, and today. Considering you didn’t take the 10 year ago option, take today!

Until next week,

Jay Mcinnes
T: 604.771.4606

Ben Robinson
T: 604.353.8523