There has definitely been a change in the winds from what we experienced in the first three months where homes sold for exponentially over the asking price. We had felt a shift coming and right now that shift is in full swing.
Some people are calling this a calming of the market or a correction, we prefer to call it a balancing.
This balancing has been caused by a drastic increase in inventory that meets the buyer demand, a reduction in the number of out of town buyers and investors coming in to the Niagara market, the election, a later start to spring and finally, possibly most importantly, a rise in interest rates – which we are expecting to continue to rise through the year. These factors have contributed to a return to “old school” real estate and a shift away from the frenzy we saw in the last little while.
Here is what happened city by city last month:
ADVICE FOR HOME BUYERS IN NIAGARA
There are plenty of opportunities out there for buyers with new inventory hitting the market every day and prices starting to come down. Talk to your bank, or your mortgage broker and see what you can do about getting pre-approved and locked in at a good rate now while you start your search.
We’re starting to see a lot more offers with conditions being accepted (ie. inspections financing etc.) so don’t be afraid to go in with an offer that has conditions. We’re not seeing too many sale of property conditions as of yet, sellers are still rather hesitant to accept those.
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ADVICE FOR HOME SELLERS IN NIAGARA
Even though home values are starting to come down slightly, they’re still up from last year.
In previous months, buying your next home first was crucial. Since inventory was low, there were less homes to choose from and bidding wars were a large part of the process making it difficult to secure your next home. Selling your current home was easy because the market was flush with eager buyers and investors. Homes were selling for well over listing price, often with no conditions, and in some cases, in less than a week!
In the current state of the market, selling your home first is the way to go.
Days on market have increased, showings have decreased and buyers have more options to choose from. The showings that do happen are generally with more qualified buyers but it’s taking a little longer to get them through the door. In some cases you may need to be flexible to secure a sale and by selling first, you’ll avoid purchasing your next home before you have the money in hand to do that.
Preparing your home to sell is more important than ever to stand out from the other homes on the market. This means improving curb appeal, painting, flooring, staging, cleaning etc. all important aspects to help get your property saleable, and get you the best value in this market. It puts you in a favourable position and as the market starts to move a little bit once we get through spring and into summer there will be some serious competition. The sellers who have really nice updated homes, the sellers with pools etc will be in a stronger position than those who might need a few renovations.
As I mentioned in a few other market updates, come late spring / early summer the luxury market starts to pick up and see more activity. We are noticing that activity already! There are a number of out of town buyers from Oakville, Burlington and the GTA looking to sell their higher end properties and move to Niagara. Because of the strong home values in those markets, they’re more able to afford our luxury properties down here, and interest rates will impact them far less than the average buyer.
It appears as though the luxury market is still incredibly strong. If you have a higher end property and you’re thinking of selling, now may be your time over the next 2 to 3 months.
REAL ESTATE IN THE MEDIA
There is a lot of information in the media pertaining to the real estate market right now that seems to be creating fear around interest rates and the state of the housing market. I encourage you to close your ears to the sensationalism and instead seek out information that applies to your specific situation so that you can make informed decisions around your real estate transactions.
If you ever have any real estate questions, feel free to get in touch with anyone on our team; we’re more than happy to help you navigate this market.
FREE HOME EVALUATIONS IN THE NIAGARA REGION
Your home has likely built up a substantial amount of equity in the last year alone! Curious what it’s worth today? Book a free, no strings attached home evaluation with a member of the Davids & DeLaat team. Our free home evaluations include a comparative market analysis to give you an idea of what homes just like yours are selling for in your immediate area, a real estate consultation to learn more about your goals and how we can help you, PLUS they’re 100% free with ZERO pressure and ZERO obligation to sell your home.