Buying a home in a seller’s market. I’ll help you navigate!
If you’d like to buy a new home this year, you likely know the real estate market remains firmly entrenched in seller’s territory. Simply put, that means there are more homebuyers than houses for sale and based on the basic laws of supply and demand, sellers have the upper hand.
Because of increased demand, prices tend to be higher. Homes sell quickly and sellers can expect multiple offers, which gives them negotiating power and the confidence to reject conditional offers.
PREPARE FOR SUCCESS
Though entering a seller’s market may sound unnerving, it shouldn’t prevent you from looking for a home. Buyers can still get what they want but should have a solid plan in place to avoid regrets down the road.
Having a seasoned real estate professional who understands the market and can offer solid strategies to improve your likelihood for success is invaluable.
For starters, let’s take look at the market. Last year’s numbers have been tallied and 667,000 transactions took place across the country – up 114,000 units or 21 per cent year over year. To put that in perspective, the previous record in 2020 was set by a margin of just 12,000 units. Many real estate experts believe more transactions would have easily taken place but for a serious lack of supply.
PRICES EXPECTED TO RISE
Because of lack of supply, prices will continue to rise in 2022, though many experts believe it will be at slower pace compared to 2021.
One real estate market survey predicts the aggregate price of a home in Canada will rise 10.5 per cent year-over-year to $859,700, with the average price of a single-family detached property and condominium projected to increase 11 per cent and eight per cent to $918,000 and $594,000 respectively.
Locally, the Durham Region Association of Realtors reported 671 homes sales in December and 14,717 residential transactions in 2021, breaking the previous high set in 2020 by 13.9 per cent. The average selling price for all home types reached $1.033 million in December – a year-over-year increase of about 33 per cent.
Now that we understand the playing field, we can create a playbook that contains valuable strategies. That begins with getting pre-approved for a mortgage. Doing so will let you know what you can comfortably afford and what your interest rate will be so you can shop with confidence. It also signals to sellers that you’re serious. Know the type of house and neighbourhood you prefer and understand the features you need in a home and the ones that would simply be nice to have.
Be prepared to move quickly on a home you like and put forward a strong offer with a significant deposit. Together, we can come up with an offer that’s as attractive and uncomplicated to the seller as possible. That means eliminating as many contingencies as possible, such as a contingency on the sale of your existing property. Being flexible with your move-in date can also be helpful.
If you find yourself in a bidding war with one or more potential buyers, stay true to your budget and be confident in what you’re willing to spend. There are definite advantages to working with a realtor who knows the neighbourhoods that interest you and can provide insight regarding upcoming inventory.
REAL ESTATE A SOLID INVESTMENT
While the housing shortage can’t be solved overnight, it’s encouraging that Canadians recognize the value and investment potential in their homes and view real estate as a solid investment. Whether you’re looking for your first home or want to buy your next home, please know that I am here to help make an informed decision so you can realize
that important investment sooner.
Are you planning to sell? You might think all you have to do is stick a ‘for sale’ sign in your front yard and the market will take care of the rest but even in a seller’s market, you’ll benefit from a solid strategy. That includes pricing your home strategically, evaluating multiple offers and anticipating appraisal issues that might arise. Thankfully, I will be by your side to help you do that.
Buying or selling a house is filled with emotion so choosing the right real estate agent is always important. Count on me to complete the market research you need to make informed decisions and to negotiate ethically on your behalf. I look forward to putting my experience and knowledge to work to help you realize your homeownership dreams!