Why it Makes Sense to Buy a New Home in a Low Inventory Market
With Housing Inventory Low in Victoria, BC, Choose a New Build Instead
If you’ve been trying to buy a home recently in the Greater Victoria area, or indeed, most of Canada, you’ve probably experienced the disappointment of being outbid, or viewing a home that already has multiple offers on it. This is due to the limited inventory of homes available for sale.
A low inventory housing market means there are fewer homes for sale than there are people wanting to buy, which leads to:
Rising purchase price
Multiple offers above asking price
Offers with no conditions attached
For many, this kind of real estate market is exhausting and frustrating. But there is an alternative to fighting it out for second hand home inventory – buying a new build home.
Low Inventory in the Victoria, BC Real Estate Market
As more people are making the decision to work remotely and prioritize their quality of life, desirable locations like Victoria, BC, have seen demand for homes rise as increasing numbers of buyers want to move into the area.
Current statistics from the Victoria Real Estate Board reveal that as of May 2022, the number of home sales in the area had dropped 26.2% from the previous year. This is particularly notable as sales usually increase during spring months.
Over the same time period, the sale price for the homes that sold had also increased by over 26%, showing that the fierce competition for available homes is leading to higher costs.
The issue of low housing inventory in Victoria, BC has been ongoing for some time. In November 2021, the Vancouver Sun reported that Victoria had the highest sales to active listings ratio in BC of 94%. This means for every 100 homes on the market, 94 of them sold.
Buying in a Low Inventory Market – The Pitfalls
Anyone trying to buy a home in a low inventory market may find themselves faced with problems they hadn’t considered such as:
Being rushed into a decision: With so much competition for each resale home, you may not even get to view the home before putting in an offer.
Getting into a bidding war: Multiple offers on a home can result in a bidding war that takes the price out of your affordable range.
Unforeseen expenses: Increasingly, buyers are forgoing conditions such as inspections in their offer, then finding their home has renovation or maintenance needs upon completion which have high associated costs.
Unaffordable mortgage – If you purchase with a mortgage at the high end of your budget, an increase in interest rates could mean you can’t afford your payments.
Being unhappy: Ultimately, your limited choice could result in you ending up living in, and committed to a home, in a location you didn’t want to be in, or a home that doesn’t suit your needs.
So, what can you do in a market this competitive when you want or need to move?
Why Buying New in a Low Inventory Housing Market Makes Sense
Buying a new build home, either already built or off plan, is an ideal way to avoid the problems of a low inventory housing market.
This option is ideal for people who don’t need to move urgently and have somewhere to live until their new home is ready. If you’re not in a hurry to move, this is why buying a new build makes sense:
Less competition: Buying a new-build home won’t work for everyone as you have to be able to finance the deposit and wait for the build. This means less competition for the new homes being built.
Avoid the panic: When buying new build, you get the chance to view plans or show homes, ask questions of the developer and take your time in making your decision. No being pressured to decide due to multiple offers.
No chain to fail: Sometimes sales fall through due to an issue somewhere along the chain of sales and purchases. With a new home you are the only person in the chain with the builder, so it can’t fail.
Fixed price: With a new home you pay the fixed asking price. The price is locked in when you sign your contract and won’t increase even if the market goes up significantly while it is being built.
Get the location and style you want: Condo? Single-family home? City or rural? No need to compromise.
Protection against defects: In British Columbia, all new homes built by a licensed builder must come with a comprehensive home warranty that protects owners against defects. This provides some peace of mind to owners of new homes that if any defects occur, the builder will correct them.
As you can see, opting to buy a new home in a low inventory market helps you to avoid the stresses and pitfalls of that market as well as providing some additional benefits.
The Benefits of Buying a New Build Home
Of course, buying a new build home has benefits beyond the avoidance of a tricky housing market, there are many other reasons why buyers should consider a new build:
You get what you want: When you choose a new built home, you can take your time to find one that fits your needs and wants.
Up to date, modern design and materials: Move into a home that looks and feels new,
High tech: Many new homes come with smart technology built in.
Customization: If you buy from plan, you may be able to negotiate customizations and upgrades with your builder.
No maintenance or renovations: You won’t need to upgrade windows, kitchen cabinets or heating and cooling systems for many years.
Efficient: Energy efficient heating, plumbing, insulation and windows in new homes means lower energy bills.
New Build Homes in Victoria, BC are a Great Opportunity for Home Buyers
White Wolf Homes builds spec homes across the Greater Victoria region, giving home hunters the option to purchase new and avoid the pitfalls of the low inventory housing market.
At White Wolf Homes, we pride ourselves on building new homes with integrity and honesty that fit and enhance the buyer’s lifestyle.
Contact us today to find out about opportunities to purchase a new spec home.