Trump’s impact on the Real Estate Market

It seems like every week something new comes along that no one thought would happen.  The most recent is the attack on the auto-sector here in Ontario and by the time you’re reading this there could be something new again… who the hell knows.

So, where does this leave you, and quite possibly your largest investment, your home.  I’m sure you’re seeing lots of real estate people and they are always positive and saying now is the best time to buy, or the market is great right now, etc.  I have never been a person to exaggerate or BS what is going on.  My job as a trusted advisor is to make sure my clients have the real information so they can make the best decisions for themselves and their family.  So right now we are seeing all this tariff nonsense leaving people with a lot of fear, anxiety and apprehension so I will address the real estate market in 3 ways.  

First, the market in general is firmly in a ‘Buyers’ market meaning that there are more properties available for sale than there are Buyers looking to buy.  That means that pricing is staying low and may drop slightly.  Properties will take longer to sell particularly if your property is not priced effectively.  With this increased selection Buyers can be pickier choosing more updated homes versus homes that need extensive renovations.  Sellers are also forced to be more open to negotiation on price, closing date and conditions of the deal.  Essentially, Buyers have more leverage over the sellers and the market is forced to respond.

As the name implies, this is the best time for Buyers to buy a home.  Buying a property in a ‘Buyers’ market ensures that you are getting your new home at the best possible price, the location you want and as renovated as possible.  This is when Buyers make the most profit on their real estate.  Here are some tips for Buyers in a ‘Buyers’ Market:

• Take your time. During a buyer’s market, it’s best to take your time because there’s less of a concern about losing out on a property you’re interested in.
• Know what’s available. See as many properties as possible before making an offer. Knowing what’s available on the market is highly beneficial because it will not only help you ensure that you find your ideal home but also afford you a greater ability to negotiate price.
• Analyze comparable properties. Becoming familiar with comparable properties on the market is key to negotiating effectively. By analyzing comps with your Broker, you can use their pricing to your advantage.
• Pay attention to days on the market. The longer a home has been available, the more power you’ll have negotiating for a lower price. Even if you don’t ask to lower the price significantly, you can still negotiate for contingencies, seller concessions, and repairs.

Now if you are selling during a ‘Buyers’ Market you need to do everything you can to make your property stand out against all the competition.  Here are FOUR key things you need to do:

• Make some needed repairs. Since there are more properties for buyers to choose from, you’ll find that they can be pickier. You’ll want to do any necessary repairs before putting your home on the market and consider making minor improvements.
• Clean and de-personalize your home. Spend a lot of time considering how others will view your property. If buyers can’t envision themselves living in your home, they won’t make offers. So, do a deep clean of your home, get rid of any clutter, and touch up your landscaping or patio space in preparation. As you clean and stage your living space, try to depersonalize your space as much as possible: get rid of family photos, papers, souvenirs, and anything else that points to you living there.
• Marketing! Team up with your Broker to ensure the marketing plan for your home covers every single base possible. Ask your Broker for the marketing plan and ensure you have professional photos, a video and a virtual tour. Ask if the marketing campaign includes a slick social media campaign. If the answer is no, you may want to look for a new Broker.
• If your home is vacant or your decor is dated, it’s a good idea to hire a stager. With the assistance of a professional, you’ll be able to transform your rooms, so they look cohesive and polished.
• Price it competitively. It’s crucial that you ensure your home is competitive by pricing it to sell. Request that your Broker survey similar homes on the market to see what they’re asking. What are the comparables and the competition (there is a big difference here!). Make sure your list price is either on par with or lower than the comparable homes in your area. And when you do get an offer, make sure that you judge it fairly.

In 2008 Warren Buffett wrote an op-ed in the New York Times where he said “Be fearful when others are greedy, and be greedy when others are fearful”  What this means, with respect to Real Estate, is that when it’s a ‘Buyers’ market and there is anxiety and uncertainty now is the best time to buy and get the best deal.  

If your personal situation allows you to be in a good and stable financial position (your in a job that won’t be as impacted by tariffs like Teaching, Healthcare, government job, etc) this is a good time to be looking for your first home, or upgrading to the larger family home.  

If you think you may be impacted by what is happening right now (auto worker, steel worker, etc) I would recommend NOT making a new home purchase right now.  I know, what kind of Real Estate agent says don’t buy a house.  The kind that is always looking out for what is best for you and your family.  

If you’re thinking about selling please look over the FOUR items above to make sure you position your home as strategically as possible to help maximize your selling price.  Also, if you are selling and buying it usually works out in the wash.  If you sell low you will also be buying low.  Unfortunately, if you are at the stage in life where you are thinking of downsizing then this is not the greatest time to be selling.  If you can wait and see how everything shakes out and hopefully stabilizes you may be in a better position.