After all the ineffectual chatter about the real estate markets from Governments at all levels, we finally hear the voice of reason reported this week by the Globe and Mail:- “The Bank of Canada says the housing market has gone bonkers, and it can’t do anything about it.” And of course few entities understand the ebb and flow of free markets better – they rise and fall.
CMHC still trying to forecast and get it right – this time predicting falling prices over the course of this year. That will very much depend on what Canadians decide to do with their substantial savings post Covid and how quickly the federal government processes the 5,700 plus applications for immigration from Hong Kong. In the wake of Beijing’s crackdown on the former British colony, the Canadian government offered a program to help Hong Kongers immigrate to this country and received 5700 applications in the first 3 months – roughly triple the number that usually apply in a year!
That is the macro picture – the micro picture will depend on how many lower mainlanders were waiting for life to return to the one they knew and loved before making a desired move. There are definitely home owners who were uncomfortable selling their home in pandemic times and who will provide a new supply of available housing. Still early days….watch this space.
The heated real estate market is a topic of conversation across Canada which comes right on the heels of Covid-19. When it comes to discussing a final sale price, it is good to remember that what many call the ‘list’ price is also more aptly called the ‘asking’ price. In other words, it is an invitation to offer as it has always been.
What happens after that is a result of supply and demand – and over the past 18 months our demand has far outstripped our supply.
That over used word ‘value’ can relate only to what a buyer is willing to pay in any given market. While our property assessments vary accordingly, they are out of date by at least 18 months by the time we receive them. And…as this past year has taught us, a lot can happen in that timeframe!
Many of those hesitant sellers are DOWNSIZERS, so we continue this week to examine their options. One of the trickiest decisions relates to selling or buying first and the answer hinges on financing.
Currently banks do not want to finance a purchase based on the equity in your present home – they want to see sufficient income or cash to support owning 2 properties in the event your home doesn’t sell readily. For most retired downsizers, this proves impossible, meaning that they must sell their home first. In many ways this brings security to the financial situation, knowing that you are in a positive situation to purchase. In order to make this as seamless as possible, negotiations on your home include selecting timeframes and in most cases, buyers are able to accommodate a longer date for possession. This gives you time to find your next home, specially if you have been watching the market, checking desired locations and properties. We are able to ensure that you have that information and have looked at some properties in preparation.
Next Friday, we’ll look at the second trickiest part of preparing to sell.
Last week we looked at the potential of a reverse mortgage to enable seniors to afford to stay in their home, rather than move.
Go to our website for that information.
We are always here to help you plan and strategize your move, no matter if it’s imminent or down the road. We also have resources which can help, no matter the perceived obstacle.
Continuing in that long standing tradition of trust and care, we remain YOUR partners in real estate:-
Generations Real Estate Partners:- Michelle Hawthorne, Scott Johnson, Ray Harris, Shane Goutsis and Sheila Francis.