In my opinion, I need three weeks for something to happen before I can call it a signal. In this case, for the past two weeks, we’ve had a good amount of new supply come to market after the Holiday lull.
Real Estate bears and others that have all of their information coming from sensationalism in terms of what they’re opinions are and what they're talking about saw that lull, and some of the negative news about the economy that was prevalent over the Holidays weeks/month as the coming of the 2nd correction.
But anyone with a feel for the actual market with some up to date market knowledge, and a window into how people buy and sell real estate, in the GHA and GTA knew better.
Every single year there’s a pullback in listing supply ahead of the holidays, then a slight surge of supply mid-winter, then a pullback ahead of Fall and a surge again. No signal, nothing new. I showed the supply chart in my weekly reports before the holidays. So, if you'd like to see them, let me know.
But this time, we have to layer in the uncertainty of the economy. More specifically, inflation. Some people think the BoC will keep raising rates until inflation comes back to earth. But many need to consider the many other global events that are causing products to be more expensive.
The rate hikes has already basically killed the demand for housing. Really the main people transacting right now are those taking advantage of opportunities (longer-term vision and can see beyond the short-term impact of higher rates) or those that need to sell for whatever reason. Aside from that, any excess in demand has been eliminated.
There’s no benefit to hiking rates any further. Will the March announcement be the good news everyone’s been waiting for?
The Jan 25th announcement was the first time since the first rate hike that we had a normal 25bps increase. And the announcement that the BoC may be able to hold this rate and not have a further increase as long as inflation moves in the right direction for the 4th month in a row and unemployment doesn’t get out of hand.
But don’t get that twisted. Rates won’t come down as fast as they went up. So anyone that is too bullish would be wrong as well.
I’m seeing too many realtors getting too optimistic with their social posts, and it’s not a good look. The same thing happened when an opinion piece came out from one of the big banks about a potential halting of the hike cycle many months ago.
You can’t jump the gun on news like this when so many things are out of the BoC’s control. Today’s Realtor needs to be much more Globally aware and understand how things happening thousands of miles away can affect your house in say Grimsby.
It’s easy to be optimistic right now after a few weeks of stock market rallies, positive inflation news, lowering bond yields that are dropping some fixed-rate mortgage products, and the positive January 25th rate announcement. That’s a lot of good news, which has gotten many buyers off the fence and onto the offer table.
Over the past week and the next few weeks, you’ll see many realtors putting out content showcasing how many offers they got on a listing or how much showing activity has improved. These aren’t just one-offs, either. Many properties are getting sold fast and for big money right now. Crazy, right!? But it's true.
More buyers are starting to feel good right now. But how long is that going to last? If you’re considering selling, now may be a good time to get out there and test the market. There's still not a lot of inventory.
I’m not sure how long this window will be open. If you previously had your property on the market and had no luck selling, now may be a good time to try again. But details matter. Buyers are pickier than ever.
We’re also seeing a lot of buyers that are a little behind where the market is right now. Their expectations of price are often below where they need to be. They think phenomenal deals exist, and sellers will bend to any request.
This is not the case right now in many scenerios. Many area sellers are smart. They're not in a panic and know the value of what they have. They’re not, in most cases, giving you deals of a lifetime. But, that also isn't always the case. This is where realtor relations are coming into play. I personally have had a few phenomenal deals come together for my buyers.
But the door on all deals being phenomenal has closed, and I don’t see it opening again until the next correction, whenever that is.
But prices are still down from the peak; sellers are reasonably flexible, and some may even be open to flexible financing options like a Seller Take Back mortgage, so make sure you’re working with someone who understands how to work this market and today’s savvy seller.
I always feel that the future is bright for Real Estate in the Greater Golden Horseshoe and the GTA, and where you get your real estate content is so important today. So next time you see your favourite TikTok or IG realtor talking about something or you see something sensationalized by the media, run it by me, and I’d bet I can poke some serious holes in their overly bearish or even bullish claims.
So here's the dollars and cents of each city and area. Now, because sales are low, all of these should be taken with a grain salt. One sale, high or low, can have a massive impact on the averages. Just look at the numbers in Haldimand County. Apparent massive growth....which it's not.
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