It’s a Buyers Market…but not for long

What is a Buyers Market? In short you are in a Buyers Market if the amount of Supply is greater than the number of Buyers. At the end of 2023 we had more Supply than we have seen in years and the higher interest rates have kept buyers on the sidelines which has created the Buyers Market we are currently in.

February 2024

What I predicted has happened and the number of homes for sale has dropped as sellers couldn’t sell and have pulled their homes off the market. What that means is that the number of homes for sale has dropped to similar levels we saw last summer. The Buyers are still hesitating but not for long.

The Bank of Canada interest rate announcement indicated that interest rates will be coming down in the near future (think mid to late summer) and most likely again before the end of the year. What this means is that Buyers will start to come back into the market soon.

The record low interest rates we saw in 2020 through early 2022 we will most probably never see again. The Bank of Canada recognizes that dropping the prime rate to close to zero was a mistake and it has directly led to the current inflation we are experiencing and the skyrocketing of house prices. The Bank recognizes that it needs to reduce rates but they want to do it slowly over the next couple of years. A number of economists and big 5 banks believe that rates will come down 2% over the next 2 to three years. What that means is that long term interest rates will sit between 4 and 5% which is sustainable for the economy while taking some pressure off over-extended home owners who really stretched themselves over the last 5 years.

While we are in a Buyers Market it is a false Buyers Market or a very short lived Buyers Market because the number of people who NEED homes is still historically high. We bring in 1+ Million people per year, our birth rate is close to 400k babies per year bring the new people per year close to 1.5 Million. Now if we say there are 3 people per home (a couple with 1 child) that means we need 500k new homes per year. This past year we have seen builder shelve or delay new projects due to interest rates and buyer sitting on the sidelines. So that means we still have real NEED greater than supply.

Okay, all of that is great but what does that mean for you?

If you are a Buyer then this is most likely going to be the lowest you will see house prices in the near future. We know that in the near future interest rates are going to start coming down. What you need to remember that your purchase price stays the same but your rate can change. It is better to have a lower purchase price with an interest rate that will go down over the next few years than to wait for rates to go down while prices go up. The lower price point is much more important when it comes to your buying power.

I’ve heard a few buyers thinking that the prices will continue to go down. With interest rates going down, the real NEED of housing in our communities not going away but most likely increasing, I just can’t see any logical reason why prices will go down any more. We are at the bottom….right now….and it won’t last long.

Now if you are a Seller and you are selling because you are upgrading your home (going from Townhome to Detached) changing neighbourhoods (GTA to Niagara) or right-sizing this is still a good time to sell. If you are selling and moving to an existing secondary home (cottage, condo, etc) this NOT the best time to sell.

Lets talk about those that are upgrading. Right now the lower priced homes like starter homes, townhomes, etc those prices are bouncing back right now. I was just in a bidding war for a small 3bdrm bungalow in Hamilton where there were 28 offers. Why, because it was priced at $499k and sold for $635k. So while the starter home prices are coming back the larger family homes are still taking longer to sell and for $30-$50k below asking price. So the gap between your townhome and the larger family home is as small as we have seen in years.

If you are changing neighbourhoods that ratios are still pretty much unchanged. If you use to be able to sell your GTA home for $2.5M and buy in Niagara for $1M you now are selling for $1.9M in GTA and buy in Niagara for $850k. This type of sale really doesn’t change with the market ups and downs. The closer you are to Toronto the higher the price. The farther away from Toronto the lower the price.

If you are right-sizing you want to buy that smaller home asap as those prices are always the ones to rebound first. So, the sooner you can find that smaller home the cheaper it will be. Once you find the right home for you try to get the longest closing date possible to let the prices for your larger home begin to come up a bit so you can maximize your sale price.

You’d really like to sell your home and retire to your cottage up North etc? Now is not the time to sell. The sale price is your retirement funds and if you can wait 1 to 2 years those prices will go up for your home and that will put more money into your pocket. One caveat….talk to your financial planner and go over the impacts to you of waiting 1 or 2 years on the price going up $50k-$80k. What does it mean for capital gains, costs for maintaining your current home for the next couple years, etc. You situation may mean at the end of the day its only $10-$20k net in your pocket. That is not nothing but if would really rather be out of the city and living up North it may be worth it. As I always say….know your numbers. 😊

Whether your buying or selling, give me a call and we can go over what is best for you and your situation.

So why should you use me?

Not only is Berkshire Hathaway one of the largest Real Estate companies in North America, Warren Buffett knows a thing or two about how to maximize profit when it comes to selling and how to find good deals when it comes to buying.

Here is what I bring to the table for you:

Pre-Listing Home Preparation Consultation leveraging a professional Stagger.

Professional HD photography, Video, Drone, 360 Floor plan and virtual tour of your home

Full Service Dedicated support team providing weekly updates on the progress of selling your home

Professional Value Driven Market Analysis. This is more than the traditional CMA that most agents use, that is just a price driven approach. Your home is more than just hardwood floors and kitchen cabinets. Maybe your neighbours house that sold smelled, or had water issues, etc. The true Value of your home is so much more than just comparing to your neighbours.

Complete Marketing across all major Social Media platforms, FB, Instagram, LinkedIn, Google and we also advertise in the Oakville Newspaper. Local Newspapers are great but the buyer you are looking for to pay the most money is most likely coming from the GTA which is why we choose to advertise there.

Professional Detailed Feature Sheets on hand for buyers when the come through your home

Your own dedicated website with full photos and video

I’m dedicated to you through the entire selling process and I’m augmented with a dedicated administrative and marketing team making sure every T is crossed.

Strategic planning to identify your best buyer type and pricing accordingly to attract that Buyer

I advertise on 23+ Real Estate Boards including Niagara, Hamilton/Burlington, Toronto, Oakville, Kitchener, Oshawa, Guelph, etc. This way your home gets exposed to over 83k agents and their clients. That means almost every buyer in the GTA north to Barrie, east to Peterborough and west to Windsor will have a chance to see your listing. Now that is real exposure.

Finally I’m always available for your calls.

If you are thinking of selling this spring now is the time to start planning. Give me a call and we can go over how to maximize the selling price for your home and putting the most amount of cash in your hands.