Well, we knew eventually something was going to change – all it took was a combination of interest rate increases (with more to come), $2 gas, $12 chicken breasts and global issues like a concerning war across the ocean to change buyer psychology in the real estate market. And let’s face it, buyer fatigue and lack of housing affordability are major factors leading to a change as well (For some, I’m sure the current stock market is causing concern too).
In Centre Wellington, Arthur and area, like most areas, the market has cooled with less buyer activity, fewer multiple offer scenarios, and properties starting to take longer to sell. Locally, I believe we will see more of a “soft landing” in regard to real estate pricing, compared to a higher probability of a more significant price correction in some markets.
Inventory has increased somewhat as I write this article, although I would say inventory in Guelph and Kitchener Waterloo has built up more than the local Centre Wellington market. Buyers are less likely to get into bidding wars, are willing to take more time looking, and simply have more choices than a couple months ago. Many houses are still selling, but we are also seeing price decreases on some existing listings and a few houses not selling at all.
My takeaway message for sellers is simple: Price your home correctly using the proper marketing strategy for the current market, be patient, and your house will sell. You may even get multiple offers like my one seller client did today. Your home may take a little longer to sell. That’s ok. An offer on your property may have a financing or inspection condition. That’s ok too.
We are also going to see the return of sale of buyer property conditions. A return to normal. The last year has not been normal. Will your house sell for as much as it might have sold for in January or February? Probably not. But keep in mind this important point: While you may not sell for as much as you may have sold for in February, you will still sell your home for more than in the first 10 months of 2021 or any time before. In other words, it’s still a good time to sell or “cash out”. We all cannot time it perfectly (Besides, let’s be honest, we weren’t all in a position to sell before now). But if you still think its February 2022 and price your home accordingly, you will not be happy with the result.
For buyers, the market is getting better for you, but do not expect many “deals”. Not in the Centre Wellington and area market anyway. But you will have more choice, you will have a better chance of avoiding multiple offers, you will be able to put in financing and inspection conditions more often and you will probably pay less for a home than earlier this year.
There are exceptions of course. Some nice homes will continue to get multiple offers and over asking results. However, this will now happen less frequently. For the most part, sellers are holding out for their price. And overall relative lack of inventory in our area is helping sellers in that regard. But there will be cases where sellers are more motivated to sell than others, and as a buyer this is your opportunity to buy smart.
Keep in mind interest rates are increasing, so while house pricing may be softening somewhat, your mortgage payments will not necessarily be going down. Due to increasing rates, a further softening of housing prices will need to happen before housing affordability improves. The Bank of Canada will be keeping a close eye not only on overall inflation, but on the housing market as well, when deciding on interest rate changes for the remainder of the year.
Moving forward, nicely appointed homes, certain condos and country properties will continue to outperform. Of course, waterfront homes and good vacant lots are always in demand. Homes requiring updating and maintenance which sold at relatively high prices over the past year will underperform and sell at lower pricing in this market. But as I said above, correct pricing and a proper marketing strategy is key regardless of property type for successfully selling in this evolving market.
Whether you are thinking of selling, looking for a home valuation, or simply need advice and want to chat, give me a call anytime at 519-766-3716.
Until next month, take care.