Last week was heavy, so much anticipation and doom and gloom in the air. Nobody was 100% what was going to happen with the Federal announcement. Economists seemed split 50/50 whether there would be an earlier-than-anticipated increase by the Bank of Canada.
January 29, 2022, came and went, and the BoC did, well, nothing. Most expected the BoC to hold the rate. But then, some rogue BMO economists decided to freak everyone out by predicting seven to nine increases this year. Media outlets and blogs ran with that. It created some anxiety in the marketplace, and here we are, on the heels of a non-announcement and back into a fiercely undersupplied market.
And, we’re not even just talking about houses anymore. The real story is everything is undersupplied and moving, including condo's.
Supply is still at an all-time low in all of our local markets and surrounding urban communities. So, don’t get it twisted, even though the numbers show an increase in months of inventory compared to last month (0.6 compared to 0.4), it's still ridiculously low, demand is still at an all time high and prices are continuing to trend upwards…although that’s nothing new over these last number of months.
However, that’s why we’re seeing, yet again large numbers of offers on many properties. Last night we were up to 35 offers on a townhouse in Ancaster. I fell asleep at 1:00am ish at 35 offers, so there may have been more. I'll be checking after I send this out. We’re in an environment right now where every single property that’s priced well, is move-in ready, marketed to the masses and in a desirable community is selling with multiple offers and for more than the previous comparable.
If you’re a buyer right now, it’s very likely the price you pay will be a new record. It makes no never mind if that's a house, a condo or even a rental.
So the 'Sold Over Asking' is basically irrelevant and even our 'New Record Price' marketing doesn't currently mean as much.....although it still does matter a bit.
That said, as a buyer you must be comfortable with the fact you'll likely be paying a 'record price'. If you’re not satisfied with that, you should maybe exit the market until there’s more supply. However, a really big buyer beware.....you'll likely pay significantly more by waiting.
Sellers are in complete control of the offer process right now.
However, that doesn't mean absolutely everything is selling this way. We're still seeing the occasional property that isn't prepped, priced or marketed properly sit for a little while. And we're also seeing many that aren't set up correctly and selling significantly lower than what they had the potential to. This is where a buyer could get 'a deal' and often a great one.
One such property this last week was on Centre St. in Flamborough. It was a very cute place that was updated very well, sat on a beautiful 100x150 ft lot. Priced at $690,900 and yes it did sell for over asking, $710,000. But it had sat for 84 days. The problem? It was priced wrong to start and nobody knew about it as it got knocked down the days on market ladder. The bigger problem (for the sellers), a similar house around the corner was listed and sold late last night for $979,465.
So, no matter what the market is doing, blazing hot and even more so in any buyers market, when you sell, more eyes on a well and properly presented home will get you more money, period! And for buyers, you need someone to hunt down these opportunities for you.
Now onto condos. Toronto condos are seeing a significant upward correction after nearly falling off a cliff in early 2020.....remember that? And this is where we're also seeing the same in the Hamilton Burlington area. But, just so you understand that condos lost value not because of COVID, but because of Airbnb restrictions and a brief moment of panic selling, which affected everyone.
All of those buying opportunities we saw in 2020 in the resale market are wholly gone. By opportunities, I mean perceived deals.
The biggest opportunity for deals are in the assignment market right now, and that’s only if you’re cash-heavy. Otherwise, many off-market assignments that are priced well are also getting multiple offers.
So, if you’re a cash-heavy buyer or a first-time buyer with your min down payment saved (with at least 20% cash available), you should be looking at the resale and assignment markets.
The pre-construction market is ideal for buyers (end users) who can’t find the right place or floor plan in the resale market or those that cannot qualify for a mortgage today, but will be able to in one to five years when the house or condo building is ready. Or for those that need time to save up the 20% down payment.
The rental market is another beast that many aren’t yet talking about. If you live in a building that hasn’t been occupied before November 15, 2018, you can expect significant rent increases this year as your units don’t fall under the rent control protections. Doug Ford scrapped that to incentivize developers and individual landlords to better supply the rental market.
So, what does all of this mean? If you’re a buyer on a limited budget, it’s time to have a frank discussion with your agent, so you’re not out there shooting blanks at properties you, this may sound harsh, you probably have no business offering on. You're wasting your time and time is of the essence for you. Better yet, you should make sure you’re working with a local pro who can advise you personally at this level, advise you about everything surrounding your specific needs and situation. If your agent says, “Hey, let’s give it a try, you never know,” you need to fire that agent immediately.
For potential sellers, I'm always one that says, "If you don't have to sell, don't. You want to hang onto real estate, not let it go". Counterintuitive for me right!? But it's true. The more real estate you have, the wealthier you are. Even if you're renting because you can't afford to buy the house you want to live in, buy the place you don't want to live in but that you can afford and rent it out.
However, if you do own real estate and you want or need to sell, this is a prime time. Especially for places that may not be as desirable. Either way the opportunity and potential to make significant profits, is happening now.
Also, if your job allows and you can move markets it could be a great opportunity. I have recently helped multiple clients, sell or rent out there places and move to.......Northern Ontario, New Brunswick, Nova Scotia, Alberta and the Bahamas, where the equity in their homes here paid for them to live near mortgage free if not completely mortgage free where they moved to.
If you'd like to see how this works or if it's something that could work for you, send me a quick message to chat.
Have questions about any of this or anything else, I'm here and happy to help.
Here are the stats by individual districts for you
HAMILTON INCLUDES: Hamilton West, East, Centre, Mountain, Flamborough, Dundas, Ancaster, Watertown, Stoney Creek
NIAGARA INCLUDES: Grimsby, West Lincoln, Smithville
HALDIMAND COUNTY INCLUDES: Dunnville, Cayuga, Caledonia, Hagersville, Oneida, Seneca, Rainham, Canborough, Sherbrooke