Each month, many Brokerages release a snapshot of the monthly statistics from our local board office, outlining details such as average price, available inventory, the time it’s taking for properties to sell, and other helpful numbers that shed light on how things are shaping up in our local market. These statistics are helpful markers that point to how the market is performing. Given the excitement of the real estate industry in recent months and over the course of the last year or two, these statistics are especially of interest for consumers to follow.
Rather than spew out these numbers that we have all prepared and presented so diligently (which you can always refer to on my social media platforms!), I would like to dig a little deeper and shed some light on what we, as Realtors, see in the trenches beyond the numbers, and how the industry feels these days given the current climate, especially given the recent changes experienced.
- Buyers are hesitant, concerned, and less motivated. With interest rates increasing, purchasing power has been impacted substantially for some. A pending recession (or simply less affordability due to higher borrowing costs) has caused some Buyers to sit things out for the moment, waiting for the market to stabilize, or for the reality of current rates to sink in. This has led to a drastic change in demand, and overall sales activity.
- As long as Buyers aren’t scooping up inventory like they were previously, it continues to grow as more and more becomes available and time lags before a sale is often wrapped up. This has led to additional options for consideration – more than we’ve seen in years, which also continues to diffuse the demand as choice exists for Buyers to consider.
- Gone are the days (often!) of a house selling in a day or two… or even five. The average sale cycle has increased to just over three weeks… meaning that there’s less certainty that a sale will be secured quickly. This means – Sellers must keep their home ‘show-worthy’ for longer than they did previously and can often tire of waiting … we must re-learn patience when it comes to getting things done, dust off our skillset to market, expose, and sell well, and guide Sellers carefully if they require a firm sale in order to fund a subsequent purchase.
- Less guaranteed sales means rethinking overall strategy for consumers. Many are choosing to sell first or negotiate an offer that is contingent on their existing home selling (IF the Seller is willing to entertain such a condition) rather than purchasing first and expecting a quick sale to follow. Alternatively, refinancing and holding onto an existing property is a plan some consumers are executing if a sale cannot be secured in time or for the terms anticipated.
- With demand simmering, counting on multiple offers, and over-asking bids tend to be less common. This means pricing strategy has often changed with properties listed closer to their expected sale price, or possibly with a buffer built-in to negotiate with a Buyer. The numbers suggest that sale price is usually less than list price, compared to well beyond it when bidding wars were commonplace.
- Speaking of sale prices… the trend has seen these values softening and a wide spectrum of Seller motivation has impacted this – from Sellers caught in distress with a quick timeline required to offload, to investors ‘jumping ship’ after realizing that their income won’t cover their debt service.
These are some of the observations I’ve seen in recent months while remaining hands-on in the industry. Staying tuned to conditions enables me to guide my clients well, position them appropriately, and align their expectations realistically. Maintaining an accurate pulse on market conditions is critical to success in order to analyze, respond, strategize, and execute a plan on behalf of each client I represent. Anyone can gather some statistics and regurgitate numbers… interpreting what those numbers are saying based on real life experience is where there is value and insight to offer and share. It is my honour to remain in the trenches so that I can speak to the market beyond the numbers, protect your best interests, and help you navigate these turbulent times successfully. If you’re curious to know best to make your next move, don’t hesitate to call, text, email, or message – I’d be happy to share further information with you to come up with a successful plan to meet your goals!