Well the numbers for April are about to be released and the sales are way down from the previous month. If you have been watching the listings you will notice that some are still selling over asking but many are not. Some are even relisting higher and taking offers any time. We are at a turning point. The interest rates at the Big 5 Banks are all over 4% now with a Bank of Canada prediction of another .5 to .75% bps.
That in turn will cause the banks to hike again. We are in for a rough ride over the next little while. Many Sellers are holding out for those January and February numbers and unless you have a very unique and over improved property, don't count on it. We are seeing deals that were done in the peak of the market, not closing now.
Some buyers were advised to buy first and bought when the market was at an all time high are now trying to sell their price and not seeing the same value that they thought they would get as little as 2 months ago. The appraisals on some are coming in low and buyers can't make up the difference. This is going to be big hiccup moving forward. No one wants to catch a falling knife.
I do not see the market picking up in the near future at all... if anything I think it slowing down and although it may be great for First Time Home Buyers (if they can get approved at these higher rates), it may also cause a lull as the payment on a $800,000 with a $200,000 down, not including property taxes, gas, inflation, groceries etc.... is well over $4,100.00/mo. So it will in turn effect home prices. Rates go up, prices will come down.
Then we have all these buyers that bought the past 1 year or more with no conditions. Buying a home in winter with no home inspection and now that the snow has melted and the Spring is in the air, they are seeing all kinds of faults in the property. Leaks, Damage, Mold, Imperfections that they maybe didn't notice in their 15 minute walk through/showing (eye roll).... yes, during the crazy times, we have 15 minute appointments for people to make decisions on the largest investment of their lives.
Sadly many of these purchases are now showing some buyers remorse and even more so when they are seeing properties sell for less or not selling at all and sitting when they paid considerably more. Sales Comparison More to support future interest rates hikes:
https://www.canadianmortgagetrends.com/2022/04/bank-of-canada-prepared-to-raise-interest-rates-forcefully-if-needed/ ( You should check these numbers out )
Then I see messages like this: If you are thinking on selling your home, be prepared for it not to sell in multiples over asking now. Those days are slowly disappearing and the days of houses being on the market longer and negotiating prices is more the norm now. Buyers are waiting to purchase... the only ones really buying right now are the ones that were pre-approved back when the rates were much lower and have it locked in for 90 to 120 days. After that, they need to reapply and their purchasing power will go down due to the higher rate. In any market, people will still have to buy and sell homes.
What I am saying is the market is definitely swinging away from a Sellers market. The April Market Watch is showing much of the same thing. GTA Home Prices Cooling from Hot Spring 2022 - HouseSigma Days on market have doubled, Prices and Sales down .. .the further out you go, the further the reductions are starting to happen. I think this is going to be a rough ride for a couple years until we get inflation and interest rates under control.
Right now this is just the early stages. If you are thinking on buying or selling, I would love to have a more personal conversation with you to let you know what your options are and how to market your property to best service your needs. If you are buying, timing right now is everything. Get a pre-approval done (I can send you to a broker who can assist you without leaving your home) and lock in the rates now because more hikes coming. June 1st we will probably see BoC raise another .50 to .75 bps. I hope this gives you a little insight to what we are seeing happening and if you need a sold price or set up for listings, just email and I will be happy to get you set up with what you need. Happy House Hunting and Happy May !!!
Cheers, Michelle
Your Sometimes Too Honest Real Estate Broker
