Setting The Right Purchase Price Parameters
When drafting out a vision for their next home, most buyers focus on getting the basics down pat. From choosing the community with the right mix of amenities and schools, to the home with the right combination of bedrooms and bathrooms to make day-to-day life liveable, prospective home purchasers generally begin their home search with at least a rough idea of what they’re looking for.
In markets as expensive as Vancouver’s, affordability generally plays a huge role in influencing where purchasers live. For most purchasers, even if they’re willing to stretch their budgets to the extreme maximum, there will always be certain neighbourhoods or styles of homes that will be outside of their range of affordability.
With this in mind, one might expect that local homebuyers would start their search by focussing on homes at the top end of their affordability. Interestingly, according to the BMO Fall Home-Buying Report released last month, almost half (43%) of home buyers are expecting to spend 21 per cent more on a home than when they first began their search.
Granted, the data from the report was aggregated nationally and based on an average home sales price just shy of $500,000, but the report provides some interesting food for thought. In particular, the implied conclusion suggests that homebuyers might make better use of their time by looking at homes valued up to 20% above their “target budget” right from the outset of their search. In this way they will be able to have a much more comprehensive understanding of the options the market has to offer and the different lifestyle choices that will come along with it.
Of course, home buying is a journey and rarely is speed the only factor upon which the success of a home purchase is based. It’s often through starting with an ambitious price target and then assessing the range of possibilities at that level that buyers gain a deeper understanding of the pricing that the market is willing to bear.
If you have questions about the market or would like to discuss anything mentioned in this article, feel free to send me an email or drop me a line—I’d love to chat. I’m a Vancouver Realtor who is an expert in residential real estate and sell extensively condominiums, townhomes and detached homes.