Canadian homebuyers and sellers across the country have at least one thing in common, no matter where they’re located. Everyone wants to know where real estate sales and home values are headed and how to use that information to their best advantage. Well, if you’re one of those people, here are a few facts that you might want to consider as you make your decisions.
Real estate is – and always will be — a cyclical business and according to many industry experts, this year we can expect to see the beginnings of a new cycle. Very low interest rates have been in place for a few years now and this has already attracted many people out of the rental market. To a large extent, any pent-up demand for housing has now been satisfied as those renters wanting to step up into home ownership have already made their move. Further proof of this is the fact that rental vacancy rates are now on the rise in many urban centers across the country. Just a few years ago, it was very difficult to find good rental housing, but now it’s becoming commonplace to the see the ‘vacancy’ sign posted out front of apartment buildings. That’s a sign of a new cycle.
So what does it mean when the rental vacancy rate starts to rise and there are potentially fewer home buyers entering in the market? It usually means that you will start to see more inventory of homes for sale. It also means what has been a purely sellers market will start to cycle into a more buyer-friendly environment. That’s good news for buyers, because there’s more to choose from and perhaps even a little less competition for available listings. But if you’re a buyer, don’t be too confident of capitalizing on this shift. Smartly priced homes in desirable locations will continue to be snapped up quickly, and at a good price. As the cycle starts to swing from the frenzied, red hot market of recent times towards a more moderate market, home values are still projected to climb in the coming year, just at a more reasonable pace. One bit of good news for buyers is that this mature market cycle will probably see fewer multiple offer scenarios and the bidding wars that can characterize a sizzling sellers’ market.
A larger inventory of listings tends to extend the length of time a property is on the market before it sells. That may not come as good news to home sellers. However, while it may take your home a little longer to sell than in the height of the boom, the good news is that homes will continue to command good prices. In fact, most economic indicators predict further increases in average home values over last year’s record-breaking levels. Just be prepared to give it time!
Of course, these general predictions don’t take into effect the special conditions that will exist in your own local marketplace. If you’re thinking of buying or selling a home, why not call your Coldwell Banker real estate professional. There’s no cost or obligation and you could benefit from their expert advice.