Things in Real Estate are cooling. The hot housing market showed early signs of cooling in April as prices for detached and semi-detached homes fell slightly compared with March after a surge of new listings came onto the market. Sales are down 26% in May, but 50% more houses are on the market compared to last year at this time. Homes that may have sold quickly in previous months are now taking 3-4 weeks to sell. Bidding wars have slowed as buyers pull back. The high prices of yesterday have driven investors, that were previously buying homes, away. In just a short span of 3 months prices had gone up 20% – buyers have raised the white flag and threw in the towel.
Now, buyers are looking for value as we see prices slowly going down this month (still higher than this time last year). Some buyers are taking a “wait and see” approach to the Government actions that were put into place to cool demand, although it is thought that those initiatives will have a very small impact on the market. Buyers who recently closed a deal at a higher price are seeing homes in their prospective neighbourhoods selling for much less and are now walking away from those deals. The mood in the market appears to have turned very sharply, very quickly, and buyer’s remorse is setting in. We are seeing people who paid those crazy prices over the last few months walking away from their deposits. They don’t want to close anymore. This leaves those buyers who previously bought at very high prices attempting to sell thier homes and struggling to do so.
New listings of homes have spiked as some homeowners in the area hurry to cash in on high house prices. Listings were up 47 per cent in the first half of May, compared to the same period a year earlier, even as sales fell. According to real estate analysts some of that spike is people re-listing their homes after failing to attract a bidding war.
What does this all this mean for you?
Buyers: look for value, factor in a discount, the market is on your side now
Sellers: be realistic, rethink your expectations and don’t cling to the prices of the previous years – we may not see those prices coming up for possibley another 2 years.
Let me help you make educated decisions. Whether you are a buyer or a seller I have the expertise to guide you through this process. Contact me today.