The media loves a crisis. They feed off the fear of doom and gloom situations that sometimes never even happen!
The housing market is no different. They love words like CRASH or BUBBLE and they sell ad space when all our eyeballs are on their material. If anything, when the market is crashing, the media is cashing….IN, that is.
So what’s the reality? What is happening ‘on the ground’ in the marketplace at the moment?
I’ll tell you….and, as you’ll see, it’s not ALL doom and gloom!
CREA (the Canadian Real Estate Association) released it’s latest numbers this week. Summarizing the August market:
More than 58k homes sold across Canada in August. This is 33% more than August last year. 6% higher than the previous month which was already a record-setting month!
August tends to be the month where last minute vacations happen. Families are busy preparing for that first day of school. So it’s a slower month in real estate. It sets up the November push where we see an increase in listings and sales leading into the winter “freeze”.
This year has been different. We can’t travel other than to cottage country which has been SUPER BUSY. People have been able to take the time to focus on their move earlier than in past years.
It’s been a roller coaster of a year! During the months of March through June we, as a city (I work out of Burlington, Ontario), we were down to about 20 sales a week. Compare that to current numbers, we are selling 20 homes a DAY or more! In the last 7 day period, we had over 110 sales as I’m writing this.
Sellers are taking advantage of low supply and cashing in at the moment. It was 2017 when inventory was as low as it is now.
In April of 2017, in the city of Burlington, we were sitting at approx 270 listings on the market. This was right before the correction back to a more normalized market. As of the writing of this, there are 305 listings.
A seller’s market is a double edge sword. You sell at high price but you also buy in the same fast market.
Let’s also not forget that buyers aren’t stupid. They have access to more information than ever before. As with any market, if you aren’t priced right, your house won’t sell.
There is no magic pill. No dancing performers and elephants out front. No amount of marketing money that will overcome an overpriced home.
What does the future hold?
There are 600k-700k mortgage deferrals coming due across Canada in the next two months. There may be a flood of foreclosures coming into the market. This could cause a slowdown across the board.
Time for investors to come out strong and begin buying!!
Canada’s economy and the local economies in southern Ontario have been strong. Especially in times of great difficulty.
Big cities and those with a large manufacturing base will feel the crunch of decreasing avg prices. While the surrounding urban areas tend to be less affected.
Mortgage rates are at historic lows helping prop up the recovering market. Jivan Sanghera of Circle Mortgage is a regular Yahoo Finance contributor. He says “Bond yields are at historic lows. The Bank of Canada has made it clear that the recovery is underway. But low prime rates are here for the foreseeable future.”
This will help fuel a steady increase in the market.
How long will that last?? That’s anyone’s guess. Covid-19 is unpredictable. And these are unprecedented times.
Now, more than ever, it’s important to speak with a professional about your goals. If you’re looking to buy or sell, a realtor will help you make good decisions. Discuss your local market. Put a plan together and understand your options.
This isn’t the end of the world. If anything, this is the beginning of something brand new! A new way of life, a new way of doing business.
Sales Rep/Team Lead
JL Realty Group