It’s a seller’s market.
Currently in Kitchener Waterloo there is a lack of inventory of good homes for sale. It’s been a long cold winter and potential home sellers have not listed their homes for sale. At the same time, the inventory of home buyers is building up on a daily basis. With nothing better to do, stuck inside, home buyers are surfing houses, homes, condos, new building sites…they are ready to buy.
Because of this imbalance, the balance of power has shifted one more time again to the home sellers. According to the news I read, we will remain in a seller’s market until the middle of the year and then the market will balance out.
If you look at the statistics for home sales in Kitchener Waterloo over the past six to nine months, you’ll find that the number of sales is down consistently over the past five or more months but the prices are up. A lot of potential home buyers have been waiting for years and years for the prices to drop (by 30%, don’t make me laugh) and sadly for them just because you think it, believe it and want it, it doesn’t make it true. If prices were going to fall, they would have already fallen. That sad reality is becoming real to those who live in a world of hope.
The bigger picture
It’s a world economy. What happens in one country affects another. From what I read, there were two factors at play that lead to our real estate market continuing to grow and then not stalling and crashing. It’s all about money. It’s always about money.
Going back ten, twelve years, our finance minister in an effort to stimulate the economy, lowered interest rates. This was suppose to encourage investment in our economy. Much of that investment money went into real estate, not what he’d planned. Personally, I think we’d all been fooled and perhaps cheated too many times by the fraud and mystery of the stock market and the manipulation of large corporations. Real estate is safe. We can see it, and touch it. It’s a hard asset. As a result, real estate became, in the past dozen years a major economic driver of our economy. There is a ever increasing percentage of people doing business in real estate related businesses than ever before.
Moving forward, in 2008-2009 with a lot of world governments teetering on the edge of economic collapse, Canada was seen as a safe place to park their money. Canadian bonds were bought. Bonds have a direct impact the fixed mortgage rate. Rates stayed low. The real estate market stayed hot. The real estate market stayed vibrant even with the tinkering of our finance minister to the mortgage rules and requirements – it got harder for real estate investors and first time home buyers to qualify, gone is the 40 year mortgage…
That explains how we got here, why our bubble didn’t burst.
The good houses are selling fast, and that’s OK. Seller’s want to sell fast and avoid all the hassles of selling. Buyer’s in turn have the knowledge and the guidance of their realtor to help them buy right, at the right time and for the right price. They are ready to pull the trigger. Our job is to help them find the target, calculate the wind speed and…FIRE!