Home values are being driven up as demand is high!
What have been the buzz words in real estate since May 2020? ‘It’s a crazy market!’
My colleagues and I have never experienced a hot market like the one we are seeing today. During the height of the pandemic, we all suspected the real estate market would crash. We thought people would be losing their jobs enough to affect house purchases, and others would not want to move because of the ongoing health risks.
But to our greatest surprise, it’s actually been quite the opposite!
I have new buyers as a direct result of COVID-19, people wishing to leave the city in order to have more space, more intimacy, more nature, and to be further away from others. Among my fellow horse people, some no longer want to board their horses in a public barn after experiencing a month-long shutdown where they could not see their four-legged friends. These people are buying their own hobby farm to be close to their horses.
Many who now work from home are also deciding to buy properties in the Laurentians, the Townships, and surrounding areas, which means the market is very ‘hot’ for sellers there as well.
So, what happens when there are a lot of buyers and little inventory? When there are too many buyers who want the same house? What we end up with are multiple offers on a property within days of it coming on the market. And often in multiple offer situations, a property ends up selling above asking price — sometimes for as much as $100K to $200K higher!
Home values are being driven up as the demand is high
While the market is wonderful, if intense, for sellers, it is very tough right now for buyers. My advice to anyone looking for a home in this market is to seek an experienced Real Estate Broker Agent There are two reasons for this:
First, strategy and timing are critical when demand is this high. And Real Estate Brokers have access to information that is not available to the public, such as offer deadlines, visit schedules, etc., which will speed up the process for you and give you a chance to make your offer on a house.
The second reason confronts a myth among buyers. Many believe that going directly to the listing broker will save you a commission. This could not be further from the truth. In the case of multiple offers, brokers are not allowed to negotiate their commission. It is against the law. Additionally, buyers should be aware that the listing broker is hired and paid by sellers to represent and protect them. The listing broker does not represent the buyer, nor the buyer’s interests. So again, I highly recommend you team up with a broker that will properly represent you.
It’s a tough market out there, and you have to be very prepared. A mortgage pre-approval is no longer simply recommended but required. Nobody will take the risk to accept an offer without a pre-approval.
According to the Financial Post, the 5 hottest real estate markets in Canada right now are:
- Ottawa — Has the largest year-over-year gain out of all of the housing markets in Canada at 19.9% in August.
- Montreal – The Montreal Census Metropolitan Area sees the second-largest year-over-year price gain in Canada at 16.4% in August.
- Niagara Region — Home prices register a year-over-year gain of 15.3% in August.
- Guelph — Year-over-year gain of 14.3% in August.
- Greater Moncton area — Prices are up 12.5% on a year-over-year basis in August.
With the second wave of COVID in certain regions now, we will see how this will affect real estate, but based on my experience, I don’t think things will change any time soon, provided interest rates stay low.
In a seller’s market like this one, teaming up with a Real Estate Broker who represents your interests, who knows the best strategies to make your offer as attractive as possible (it’s not all about price!), and who knows the market, is clearly the way to go. Contact me for more information!