“What is happening in the Market?”
Is a question I am asked all the time, and today’s market doesn’t get the typical canned answer.
There has been an overnight shift in the market, although many have been slow to understand what has happened. I’ll fill you in with what is going on today… which may change tomorrow!
I noticed some strange activity happening in the market in late March. A few of my listing clients experienced less activity and interest than expected, and a few of my buyer clients experienced less than expected competition, if any at all. I felt that it was an earlier than normal market exhaustion. I have found over the past two years that there have been two defined moments in a calendar year where Buyers will pull back a little bit due to exhaustion/frustration/lack of perceived value in the market. As people experience multiple offer after multiple offer, and the prices drive higher and higher, the pool of Buyers would simply get fed up and need a break.
Then ’The Government’ stepped in
In my experience, whenever the government makes any announcement involving Real Estate, the market reacts immediately. Previously, announcements have focused on changing lending rules, making the ability to get a mortgage more difficult. This made the market spike with sales with people who wanted to buy before the new rules were put in place.
This time it was the reverse… The government announced it was putting in measures to slow the market down and make it more affordable for everyone. The headline involved mirroring a foreign buyer tax implemented in BC, among some additional rent control provisions.
Enter the Shift
Overnight the activity changed. Overnight the multiple offers have all but disappeared, and those that remain are between 2-3 Buyers instead of 10-12. Overnight the number of cancelled listings have increased to a level even the longest serving Realtors out there haven’t witnessed. Overnight, inspection and financing conditions have re-appeared, even in multiple offers.
Overnight the market shifted, and many have been left wondering how to navigate it.
Where did all of the Buyers go?
Nowhere! They’re laying in wait to see what the market will do. Instead of the rush to buy before mortgage rules made it more difficult, the reverse has happened. Many Buyers are now waiting to see if the market becomes more affordable, as advertised by the government.
Many Buyers are waiting to see if the inventory increases and gives them more and better options of homes to buy.
It has taken a little while for everyone to adjust, and some still are adjusting, and this is what I’ve seen happen. There are more new listings than sales in the market. The difference isn’t large, but it is increasing the inventory. Listing prices have increased to reflect the range of value where houses are actually selling. Multiple offers have decreased, but sale prices have remained consistent with where previous multiple offers were selling. There are a large number of cancelled listings being re-listed at a higher list price. I have had two clients in the past two weeks involved in three multiple offers that saw all offers rejected. Those properties were re-listed the next day at a much higher price. They’re still listed for sale…
Listing and Buying strategies have to dramatically change to maximize your return in a market that is constantly evolving. You should be working with an experienced Realtor who researches the trends daily, and understands where they are heading. There is a lot of room for error in this market if you misjudge it. It is a great time to Sell a Home, and a great time to Buy a Home.
I have the right plan to succeed in this market, Do you?
Contact me today to put together a successful strategy to buy and sell during this market shift.