Is the Real Estate Market Changing?

images-4

“GTA home sales plunge as much as 61 per cent”.

Headlines like the one above might lead you to believe the market has crashed and home values have plummeted. Nothing could be further from the truth.

2017 has seen a very overheated market during the first 5 months. The lack of homes for sale in the Hamilton and the surrounding GTA markets has pushed up prices and created a very competitive marketplace. The competition has led to multiple offers, generating sale prices well above the asking price for homes. This made it very challenging for homeowners and REALTORS® to determine the market value of homes.

As the market has eased in the last few weeks, buyers are finding they are not always in competition to buy a home, and have the luxury of being able to include conditions in their offers whether it be for financing, home inspection, or anything else. The market has also made it possible for REALTORS® to actually negotiate for their buyers and sellers.

The change in the market has also caused REALTORS® to have a closer look at how they are pricing and marketing homes. If you have been trying to buy a home, the one line that you hate to see in a listing is “no offers until…”, as you know you will likely be having to compete to buy the home. While there is still competition in the market, we are no longer seeing the huge numbers of offers, not the selling prices well above the asking price. In fact, we see some sellers who have opted to wait until a set date to view offers not receiving the competition they had hoped for. In some instances, these sellers are relisting their property at a higher price, and removing the time frame for offers.

As the market changes, both buyers and sellers will need to revise their approaches. The buyers are gaining the opportunity to take some time to make sure the home they are buying is the right fit for them, and to satisfy themselves regarding any conditions they need to meet.
On the other hand, the sellers are discovering that they may not obtain the unbelievably high price for their home that the neighbour did just a couple weeks ago. Also, it may take more than a week to list, market and sell their home.

As the market changes, it is important to have a professional REALTOR® in your corner, helping you make the right choice and negotiating the best possible price for you. If you are thinking about buying or selling, be sure to call one of our Coldwell Banker Community Professional representatives. They will be able to help you in making the decisions that are right for you!

The Price is Right!

When you are ready to sell, determining what price to offer your home to buyers at can be much like playing The Price is Right with Bob Barker.

If you ask 4 people what your home is worth, you will get 4 different answers, no doubt one so low you will scoff at their judgement and one so high you only hope they are right.

In our current market, pricing your home right when you put it on the market is very important. The buyers who have been looking for a home, and likely have made many offers without success, have seen all the homes comparable to yours, and are very educated on price. When they see a home come on the market listed much above current market value, they tend to not even consider it. They believe either the seller is being unrealistic, or that they have time to wait for the price reduction.

It can be difficult as a home owner to look at the prices being paid for homes, and not think you should list yours at the price just attained by the house down the street. Well priced homes are currently attracting multiple offers, which tends to drive the final sale price up, sometimes to levels not previously achieved by similar homes. At times, if a property is the only home available, and has very desirable features, it will obtain an unrealistically high selling price, only because it is the only one available.

When a REALTOR® provides you with a Market Evaluation of your home, they take into consideration what has sold, what is currently available, and what has been rejected by the market. They have the expertise and knowledge to look at the sale prices of properties, and the events surrounding the sale to determine how they compare to your home. Combining this knowledge with information regarding other properties that are currently for sale (your competition) and also considering properties that have been on the market for a longer period of time (seemingly overpriced) they can provide you with a recommended range in which to offer your home for sale.

Many sellers are concerned that the suggested price range is too low. They see a similar house that sold for maybe $50,000 more that the price being recommended to them. The other home may have received 15 offers, driving the price higher. As a seller, you must price your home to attract the competitive offers in order to realize the highest sale price. Pricing at top dollar may very well discourage a number of the potential buyers of your home, and possibly make competition unlikely.

If you are considering selling your home, and would like an honest opinion and marketing plan, call one of our Coldwell Banker Community Professionals representatives. They will provide you with a comprehensive evaluation, and help you make the right decision.

How Long Should You Wait?

NZ-house-Prices

What is the price of procrastination currently in real estate?

The real estate market right now is difficult for buyers. The lack of properties to select from, and the competition to buy what is available is making some people think they should just wait until the market is better.

In real estate, waiting can be good for you or bad for you, depending on how different variables change. For example, the interest rate in the United States has started to edge up, and history would tell us that Canada will soon follow the example south of the border. The rate was just increased .25% in the U.S. It may not seem like much, but first, it is a sign that rates are going to increase to some extent, and also, we may not see historically low rates again for some time.

The .25% rate increase on a $250,000 mortgage could mean a difference of $31.84 per month. An increase of 1% could mean a difference of $130.11 per month. Over the term of a mortgage, the increase in payments tend to add up significantly.

If home prices continue to increase at the rate they have over the past year (close to 30% gain in one year), many buyers will be priced out of the market, as incomes are not increasing at a rate that would enable people to meet the extra costs. For example, a $400,000 home in today’s market could be $520,000 in one year’s time, assuming another 30% gain. Today, if you were putting down 10% ($40,000), the $360,000 mortgage would have a monthly payment of approximately $1650.00. The same house with a 30% increase would have a monthly mortgage payment of approximately $2150.00 per month, and the 10% downpayment would be $52,000. Same home, one year later (assuming mortgage rates don’t change). As you can see, the same home can cost you a larger downpayment, and in this example, $500 per month more in a mortgage payment.

If you are ready to buy, and have been waiting for the right time, maybe you should quit waiting!

Call one of our Coldwell Banker Community Professionals representatives and see if now is the right time for you! They will help you look at all the possibilities to ensure you make the right decision.

Welcome Spring!

The calendar says Spring is here, even if the weather doesn’t.

Traditionally Spring is the time of year when new real estate listings flood the market, and everyone gets busy. The market this year has been going at a record breaking pace, but in spite of that, I hope that home owners will get excited by spring, and decide to put their homes on the market.

We have been experiencing an unprecedented shortage of homes for the number of buyers looking. Many feel the only way to correct the shortage is to have the government intervene, enacting more laws and restrictions.

These actions in the past year seem to have hurt the very buyers they were trying to help. New mortgage rules have made it more difficult for first time buyers to obtain a mortgage, only adding to the problem of soaring prices, and making it harder for them to save for the downpayment necessary.

There is talk of the government placing a foreign investor tax on those buying in the Toronto market, to help ease the inventory shortage, but those in the market say it’s not foreign investors causing the problem.

Many experts says that the only way out of the housing shortage is for more new homes to be built, in recognition of a slow down in new home construction last year.

Perhaps the seemingly easiest solution is for us all to get on with life. Many home owners I speak to are waiting. Waiting to see if prices go up. Waiting to see if more homes will come on the market for them to select from. Waiting to see if interest rates are going up. All these events are likely going to happen… the unknown is just how soon. If everyone who has been considering moving put their home on the market, perhaps our greatest issue would be solved – lack of properties to buy.

If you would like to find out if now is the right time for you to make a move, call one of our Coldwell Banker Community Professionals reps. They will be glad to help you make the right decision.

Oh No! I Sold My Home!

ce4a9f30cb42bf341ab2aa815aed136a_real-estate-sold-sign-lindsay-house-sold-sign-clipart_1000-750Are you afraid to sell your home in case you can’t find one to buy?

This seems to be the impasse  many potential sellers are stuck at. The market right now has such a low inventory of homes to buy, many people are putting off selling, even though they have many reasons that now would be a good time to sell.

If you are in this position, you have a lot of things to consider.

By not moving, are you putting off plans that would be better for your family?
Financially, is now a good time to sell?
If you haven’t sold your home, can you buy your dream home if it came on the market tomorrow?
If you can’t find your dream home, are you willing to rent a property until you find the right one?
Are you tired of carrying the household costs on large home that is more than you need?
Can you afford to own two homes?

If you are being held back by one of these concerns, or another not mentioned, take some time and determine whether there is a answer should you sell your home and become “homeless”.

Are you fortunate enough to have a second home where you could live temporarily while waiting for the right home to come on the market?
Are you prepared to rent accommodation while looking for the right house?
You might be able to negotiate a long closing on your current home, to allow you time to find the right home.
Do you have family members with extra space for you to stay with if the need arises?
Is there another solution which would enable to you move now?

Not everyone is prepared to put their home on the market without knowing where they are going next, but maybe you are.

Being homeless is not as bad as you might think. I sold my home last summer, and am currently renting a home while I look for just the right property. Is it perfect?, no, but it provides the freedom to be in control when I do find the right property. As a buyer with no home to sell, and the ability to match most any closing date a seller might request, I am in a good negotiating position.

So, are you ready to put your home on the market? Be sure to call one of our Coldwell Banker Community Professionals to discuss what your options are.

Is Now a Good Time to Buy a Home?

arraignment-clipart-question-mark

There is no “one size fits all” answer to this question. It is not always a good time to buy depending on your stage in life and your future plans.

The recent changes in the mortgage qualification rules have either taken some buyers out of the market entirely, or reduced the price of the property they are qualified to buy. This has prompted some buyers to become creative, whether by having family or a friend go on title of their new property, and be included in the mortgage calculation, or by borrowing money to increase the downpayment to over 20% to avoid the higher threshold of qualification. Both of these approaches have their risks, and should be carefully considered before using one of them to buy a home. It is possible that now is not the time for you to buy. Perhaps taking more time to increase your downpayment, or time to consider what you really need in your new home is the right approach. It is possible that a lower price home may be the right fit for you right now.

Some ‘experts’ are predicting that home prices will ‘adjust’ (as in decrease) due to the new mortgage rules, as fewer buyers will be able to qualify at the current price levels. We have not seen this happening in the market as of yet, but it is possible. We are seeing less competition for homes compared to the frenzy we saw through the spring and summer.

If you are fortunate to not be subject to the rules for less than 20% down, now may very well be a great time to buy a home. If you are at the stage in life of downsizing, you can maximize your sale price on what is likely your biggest asset, and reinvest in a lower price home. If you are upsizing, it is hard to beat the current mortgage rates that are being offered. One of the big banks just increased their mortgage lending rate, but we have not seen any others as of yet. The Bank of Canada has indicated that they may even decrease the bank rate, which might result in lower still mortgage rates (hard to imagine!)

If you are an investor, with mortgage rates where they are, and the number of people in the rental market, now is a great time to buy that duplex/triplex etc.

As you can see that answer to the question I posed is perhaps. There are many things to consider. How long do you intend to live in the home you are buying? Are you starting a family? Are you retiring soon. These are just some of the questions to ask yourself. The best way to find out what is the right answer for you is to call one of our Coldwell Banker Community Professionals and discuss your current wants and needs, and perhaps even more important discuss your future plans. They will help you determine what you can afford to buy, and if it is right for you. It costs you nothing, but may very well save you a lot of heartache in the future.

Frozen

atlanta-frozen-pipeSadly I am not referring to the Disney movie of the same title…

Each winter we hear news reports of homes that have had the pipes freeze in the severe cold weather we experience. Everyone seems to be forecasting for us to have a colder than average winter this year, so I thought I would touch on this early enough for preventive measures to be taken.

Generally when pipes freeze it is because they either run through an uninsulated area, such as a garage, crawl space or an attic, or are located on exterior walls of the house without adequate insulation between them and the wall. Another unexpected, but common cause can be an outside hose that is left connected to an outside faucet. When it freezes it puts pressure on the interior pipes, and can cause them to break, so always disconnect your garden hose at the end of the season. Also, always turn off your outside faucets and drain the last of the water out of the spigot.

If your water pipes run through an uninsulated or poorly insulated area, you can purchase foam wrap for the pipes. If you are concerned that the pipes will be exposed to the full cold, you can also wrap the pipes with a heat tape that will maintain a minimum temperature to prevent them freezing.

For pipes running in exterior walls, the only effective way to correct the problem is to open up the walls and improve the insulation. On very cold walls, you may actually need to reroute the pipes to a less exposed location.

It may seem like a lot of work to do on the chance that the pipes may freeze, but broken pipes will lead to larger repair bills down the road, including the potential for mold removal.

If you are buying an older home, be sure to have your home inspector check where the water feed is in the house. It is always better to know before winter strikes whether you may have a problem…

Also remember if you have a home with a lawn sprinkler system, have the water blown from the system at the end of the season.

As always, one of our Coldwell Banker Community Professionals will be happy to speak with you about this and other home ownership concerns.

At Coldwell Banker Community Professionals, we don’t strive to be the biggest, we strive to be the best!