Last year, I was right in my prediction about real estate prices and sales volumes. You should listen to me. I know what I’m talking about.
I believed the pundits that said we were in for a “soft landing”. I said that if there was any downward pressure on prices, it would happen in the late spring and early summer. That didn’t happen (prices actually rose), although for this Realtor late spring was a slow time in terms of sales volume, slower that it should have been.
What happened in 2013
What the Canadian Real Estate Association (CREA) reports happened in Canadian real estate, was to the most part what happened in Kitchener Waterloo in 2013. We got off to a slow start in January – March, had a busy spring, slumped through the early summer and picked up at the end of summer and through the fall.
At the end of the year, sales volume was about 2% higher in 2013
CREA’s report went on to point out that the “dime-a-dozen doomsday forecasters” were wrong (again) in predicting a housing market crash. It didn’t happen in 2010, 2011, or 2012 either.
According to The Housing Market Outlook 2014, in Kitchener Waterloo last year the “move up market” was particularly active, with buyers driving sales of both new and resale single-detached homes over the $400,000 price point. Inventory levels were especially tight between $400,000 and $500,000, the entry-level for those trading up to larger homes. Lack of supply prompted many would-be new home purchasers to turn to existing product in areas like Doon, East Forest, and Huron Village where they were able to buy similar product priced as much as $50,000 less. By far the greatest percentage increase in activity occurred in the $500,000 to $750,000 category where sales were up almost 40% year over year. At the other end of the spectrum, the number of homes sold under $250,000 softened considerably as a result of fewer first-time buyers in the market. Tighter lending criteria, coupled with reduced job stability and an increase in contract positions, have many entry-level purchasers pulling back. Demand for condominium product within the Kitchener-Waterloo area remained brisk, supported by students attending the University of Waterloo, Laurier, and Conestoga College. Many buyers, including investors, have purchased units at 144 Park St., a new 19-storey development including high-rise suites and brownstones in Uptown Waterloo, with occupancy scheduled for November 2014.
When will be the best time to buy a home in 2014?
Back in 2010, many people thought that prices were too high and that they had nowhere to go but down. There were concerns about Canadian’s level of personal debt. Our finance minister tinkered with the CMHC and the lending laws. This affected investors and first time home buyers. It cooled the market down. But the bubble did not pop. There was no hard landing.
We are in a very balanced market right now, according to CREA.
Spring and Winter
There tends to be a cyclical pattern with real estate.
Generally speaking, the spring time is when most homes go on the market. Tax refunds for down payments, moving during summer holidays, and warmer weather, are some of the reasons for this. For home buyers there is a lot more choice in the springtime.
However, the conventual wisdom among real estate agents is that selling prices are higher than yearly average during this period. There is a frenzy of activity in the spring. It’s normally when the market is its hottest. It’s a great time to list, but maybe not the best time to buy. If price is a major consideration, December and January’s prices statistically are lower than yearly average. Of course there is less to choose from then – you’re just picking over the leftovers.
With that in mind, maybe the best time to buy is late spring or during the summer.
What will happen to home prices in Kitchener Waterloo?
The Canadian Real Estate Association (CREA) predicts that total home sales in 2014 will be higher than in 2013. That’s Canada wide.
Prices are going up in Kitchener Waterloo too.
According to The Housing Market Outlook 2014 an escalation in home prices is anticipated for for Kitchener Waterloo, with average price climbing an estimated 3% to $320,000 in 2014, an increase of about $9,000 over the $311,006 reported one year ago.
The number of home sold in 2014 is expected to be about the same as 2013 levels.
The market simmers in 2014. If you liked last year, you’ll like this year too.