Anyone who pays any attention to the real estate market understands that a change is afoot. Call it a market shit, call it a cooling down, call it whatever you like, but we are in the midst of a change in the market.
So, what is this happening?
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For the most part, a shift was expected, and to be brutally honest with you, somewhat needed. If you look at the market stats since April of 2020, we have seen a 50 percent jump with regards to pricing in Northumberland, and anyone who thought that this would continue it perpetuity is just out to lunch. What started it? A few reasons in my opinion, primarily the interest rate hike has spooked some would be buyers who simply want to wait out the market and see what happens, why buy at record high prices when you may see things settling down? Secondly, I think there is a lot of market exhaustion out there, people are tired of bidding wars, people are tired of missing out on properties, justifiably.
What does this mean for the short term?
I think the best thing we can do is look to the past to better predict the future. We have had a few different situations, much like this one, where there was either an exterior force or a change in the cost/affordability of a home, there was always a pause to reflect and see how this would change the market. Look at the 2009 financial crunch that saw homes dip for 3/4 months before roaring back stronger than ever. Look at when the foreign buyer tax was added and everyone waited for 4/5 months to see the impact it would have on the market. For me, this time is no different. When the interest rates shoot up, it justifiably made people pause. I don’t believe that it truly effects anyone’s affordability, at least not on the higher end of the market, but it does probably spook those who are buying a home and worried that the market will crash. Most in this situation will take a pause. I think that’s what we are seeing here.
What does this mean for the long term?
Well, a few things to be honest. First and foremost, I don't believe that we will continue to see 20 and 30 percent growth year over year, that was not sustainable in Toronto, its not sustainable for Northumberland. Nor should it be, the real estate market will always have ups and down, however a more balanced market is always best for all. Secondly, i can see a bit of a quiet streak over the next few months while people wrap their head around the state of the market, i do see a bit of a pick up as the fall approaches. Does that mean the same overheated market we have been use too the past 24 months? Doubtful, but never say never.
What that does mean, and i don't mean to come across 'salesy', but this genuinely is a good time to by a property. The cool down brings opportunity to get better value and maximizing purchasing power, while also getting better protection in the way of conditions and clauses that you probably could not get into an offer months ago. For the first time in a long time, we are seeing conditional sales where we did not months ago, we are seeing price changes on properties that we would not have seen months ago. The buyer has more power and leverage then they have had in the past. If you are looking to buy, this is a great opportunity.
If you are looking to sell, don't assume that all is lost, I just think you need to be very realistic about the price of your property, price it accordingly and don't expect multiple offers, don’t anticipate a quick sale. It may happen, just don’t plan on it. We may be back to the time period where it take a few weeks to sell a game, and while it can be frustrating for those who want to maximize their home value, it’s better for the market. What this means is you need to have a sales representative that knows and understands how to truly market an maximize the exposure that your home gets, maximize the eyes that it gets, be it in person, online or other.
interested in buying or selling? I’d love to chat and see how I can help you navigate the market.