Warren Buffett is arguably one of the most successful investors of our time. As a businessman and opportunistic investor, he has shared his wisdom over the years about finding the right investment opportunity. During these uncertain times, we understand that many seasoned and first-time real estate investors are left wondering, when will it be a good time to invest?
As licensed professionals who have years of experience in the real estate industry, we are here to answer any of your questions and to help shed some light on the current situation as well as provide guidance on investment strategies. Warren Buffett once said,
“Be fearful when others are greedy and greedy when others are fearful.”
This quote has become a philosophy in the investment world and has been reinstated by many smart investors. This philosophy is directly related to the stock market and the investment of an asset. As a real estate investor, it is easy to get discouraged as the COVID-19 pandemic continues to unfold. There are many uncertainties about the market and how prices will be affected. It is during these unprecedented times when this philosophy comes into play.
Applying Warren Buffett’s Philosophy to the Real Estate Market
Let's break it down: The market is driven by two types of emotions, greed and fear. When others are greedy, an asset will become overvalued. When an asset is overvalued you are essentially paying more for the value of that asset. Instead, it is important to be greedy when others are fearful. This is a key tip that smart investor’s, like Warren Buffett, uses time and time again. When you purchase an asset when others are fearful, the prices start to dip because everyone is either selling their investment or are too afraid to buy. But confident investors look at these moments as keen opportunities - They will buy a long-term investment and watch it increase overtime as the market starts to stabilize.
This philosophy can be applied to the current global situation. If you purchase a pre-construction condominium now, you can capitalize on the cooling real estate market and the low mortgage rates being offered. Plus, purchasing a pre-construction condo when no one else is buying will give you more options to choose the right floor plan and the right location - Both big benefits when you decide to sell your unit down the line. Although our agents are practicing social distancing, we are able to provide all of our services online. We have come up with an easy way to communicate with our clients virtually and we are able to share files to give you first access to floor plans, prices and incentives. You can read more about how you can connect with us online by reading this article:
By working with our sales agents, we will be available to you at any time of the day. You can book an appointment with us to learn more about the real estate market during this time and you can be rest assured that we will provide you with all of the information you need. We will also provide you with online tools to help you invest in a pre-constructions condo that’s right for you. Remember if you buy now, you will see more value for your money and will reach your long-term financial goals.
The Future of Real Estate
While the economy is currently seeing a decline, it is important to know that this is only temporary. Once the social distancing rules and regulations have been lifted, the real estate market will bounce right back. Investors will begin buying again and construction will resume. In fact, the demand for homes will only increase because there is still a need for housing in the GTA. The prices for pre-construction condominiums may increase because these prices are based on the underlying costs it takes to build a condominium, like land value, government fees, hard costs and soft costs. The price per square-foot of a pre-construction condominium is based on a number of hard costs some of which include construction costs, material costs and development charges and levies, which are costs from the government. There are also many soft costs involved including architects, urban planners, surveyors and marketing, the list goes on. If these underlying costs increase, the cost of the real estate market will follow suit.
If you are still looking to invest in a pre-construction condominium unit, now is the time to buy. Be confident in your investment while the rest of the population is fearful. You will only see the benefits of this purchase in the future. Remember that our sales agents are still working virtually and will be able to assist you with any questions you may have. Additionally, we have some great online resources and more information available on our website.