The following article is one I wrote for an editorial piece in Lakeshore Neighbours Magazine, a publication of Best Version Media. All data was pulled from the WECAR Matrix near the beginning of November. Please read disclaimer below.
I’m going to preface this article with a simple statement: Market information like the information below, is applicable in real time almost exclusively. What I mean by that is, you can’t apply this information six months from now, perhaps even two months from now. This is just the state of the market as it sits today at the end of November, beginning of December 2022. On top of that, each situation is extremely unique. Not one buyer or seller is the same, as the variables are many, and any specific advice should be sought from an expert who knows your situation. A Realtor’s job is not to simply sell your house or help you to buy one. A Realtor ‘s job is to protect your best interests, advise on your situation to the best of our ability, and maximize the return on your investment or the placement of your investment depending on whether you’re a buyer or seller. If you have any questions or would like advice on your situation, please contact me using the information at the bottom of this article.
There’s so much to be said about the Real Estate market in 2022, especially as we get into the last season of the year. What’s happened in the last few months? What’s going to happen? What does it mean for buyers and sellers? How do I make sense of it all? All excellent questions let’s look and see what we can derive.
First and foremost, if someone says they know exactly what’s going to happen, they likely don’t. There are a lot of economic theories and investment strategies, not to mention Real Estate historical evidence that we can point to that could help us discern what trajectory to take, and what advice to give. However, it’s not an exact science, just ask any single major media outlet who’s gotten it wrong for a long time. There simply is no one set of advice applicable to each situation.
As I am writing this article in November 2022, if a buyer or seller comes to me and asks, “Is it a good time to sell or a good time to buy?” I answer both “yes” and “no”. Very confusing, however, there truly is no one set of advice applicable to each situation. What I can tell you is that currently we’re in a relatively balanced market with a touch towards a buyer’s market. The number of sales has decreased considerably, and the number of listings has decreased somewhat. Interest rates have obviously increased as we can see, which have effectively affected the sales of the homes on the market both in quantity and value wise. But even as the sale prices go down buyers are still paying relatively similar mortgage prices simply because the interest rate increases.
What does this mean for Buyers?
Remember the days of the Market that accepted conditional offers? Guess what, they’re back, kind of. Now I can’t stress this enough, every situation is different, so this is not always applicable. I’m not saying that competing offers are off the table, because they are still very much part of our market in the multiple offer situation. However, we are no longer continuously seeing double digit offers, and it seems to have been corralled towards houses with lower listing prices. Which can be unfortunate because that’s typically where we have our first-time homebuyers. With that said, while we used to have frustrating offer presentations which included massive guessing games of offer price, no conditions, and throwing money at a wall (which truthfully, wasn’t good for anybody) we can now look at listing prices to being relatively accurate as to what the house is likely to sell for, especially as we climb in listing price. This is due to the change in market type from Seller towards Balanced and Buyer. Many strategies have adjusted to a “Market Price” calculation rather than the “Speculative” model which was the low-ball “get as many offers as possible” situation. Tough to navigate as a buyer, yes, but was effective for a seller. In the end, on each side either as a representative for a buyer or a seller, any great Realtor does what’s best for their client. For a seller, we choose the best strategy we can.
What’s the prospective outlook? Throughout the end of the year and beginning of next year we will likely follow trends that are similar to now, likely. The holidays sometimes are a little bit slower with regards to buyers but there’s still people in the market looking to buy homes, and the holiday months can sometimes prove to be a benefit for buyers as there’s less competition in the market. Last year was very busy at this time of year, but we were nearing the top of the tables in pricing, and we still had low interest rates. I don’t think this winter will emulate the same results as last. Only time will tell.
Going into 2023 the government of Canada is going to have more increases in the interest rates as they’ve already stated (rate hikes are still expected in December, January, and March, plus six other potential dates published). Even with the increases one thing is certain, it is still better to have equity in ownership than it is to rent at this time in this market. If you can purchase, don’t wait for the “market to bottom out” because the overall net value is still better to be at it then to be on the side of it. Not to mention we have no idea if or when the Market will ever “bottom out”.
What does this mean for Sellers?
Some factors that will affect the sale price of your home are straightforward. People who use Agents with excellent marketing skills will see a greater return on their investment. Mainly because sellers need to stand out and get more eyes on their homes. Another would be finishings – with buyers keen on spending the most on move-in-ready homes, those which fit that category are highly sought after.
When choosing a Realtor, the metric of experience is simply not enough anymore. That’s not to say some very experienced Realtors are not exceptional at their job, because some are. The methodological, psychological, and technological change in Real Estate Sales has been incredible, and to sell a home well you need someone on top of that change who understands how purchasing psychology and marketing has changed considerably! With that being said, Realtors still need to understand the traditional process which is to protect your best interest as a seller. In the end, it’s a legal document you are signing, and you should always choose your realtor wisely.
To keep up to date with current market information follow me on social media, and my website. I’m always updating with new information and insight to keep you as informed as possible.
Stay positive and stay informed.
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