Real Estate Reality Check
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There is lots in the news about the softening of the housing market. Again, as these things go, there are always two sides to every story.
Last year I talked a lot about Supply and Demand - there was lots of demand and not much supply, hence prices went sky high. This year, the numbers indicate that we have lots of supply, at the same time as demand has dried right up. This lack of demand is due in part to: new mortgage rules (stress testing), concerns about the economy (equity markets on a roller coaster, Trump, NAFTA), an increase in interest rates (albeit modest).
If we look at what we are seeing in Oakville (Burlington is not quite as drastic), we see that Buyers are taking their time, looking for a bargain. They are slow to make an offer, and are very cautious when they do. When an Offer comes in, there is a great deal of negotiation. And even when an Offer gets Accepted, there are sometimes more negotiations to get the Conditions met. With only 10 years in the business, I may not have the historical perspective, but I can say that I have not seen a Spring quite like this one.
Pricing is more important now than ever. If the buyers perceive that a home is overpriced, the resultant response is for Buyers to sit back and just wait. This is nerve-wracking for any Seller. The good news in this? Prices. Remove the 2017 prices you saw from your memory. Gone. To date, pricing looks very similar, even a tad higher than 2016 levels. For the most part, this was 5-8% higher than the year before. No one is losing money. We just need to manage our expectations.
The NRTeam continues to have success in this unusual market. With our clients, we are working hard to be nimble and reactive to the signals we are getting. Do not hesitate to get in touch with us if you have questions or if you would like to sit down with me or one of my team over a cup of coffee to discuss your goals.
THE NUMBERS TELL PART OF THE STORY
Active Listings in Oakville (freehold, detached homes):
May 2013 - 532; May 2014 - 543; May 2015 - 516; May 2016 - 299; May 2017 - 663; May 2018 - 747