Autumn is yet a month away, but we are already wondering what is the outlook for the autumn real estate market.
Real estate is quite cyclical. I think it is a nature of society, holiday time to be specific. The middle two weeks of summer, offices and cities clear out, cottage country and beaches fill up. Homebuyers suspend their searches and take a week or two away. Home sellers take the time to get their homes ready. Realtors need time off too and the summer slowdown happens partly through design. We tell our sellers to wait till the kids go back to school. We take a more laid back approach to servicing our homebuyers. (A similar slowdown happens around Christmastime, New Years Eve and into January.)
But now that is over. We are in the final 1/3 of August. The back to school advertising has begun. (I actually saw Halloween stuff for sale the other day.) We are ramping up, gearing up for the second real estate market – the autumn market. Notice that I never say fall market; I am forever an optimist.
So what happens now is the number of new listings will increase until early October. This is my prediction. The buyers will become engaged again and a lot of sales will happen. Many people want to move before the holidays so we will be looking at a lot of early to mid-December closes. This is the second wave. The second real estate season. I love autumn and I love showing and selling houses in autumn.
If our local market continues as it has, we will witness small increases (month over same month last year) in the number of homes listed and sold in the coming months. We will also see a continuing rise in house prices (3-4%), more modestly for condos (1-2%).
Real estate statistics are so hard to follow. We are always comparing this month to last month or this month to this month last year. We talk about being above the five year trend for the same month. We rarely talk about the number of sales year-to-date.
About prices too, the statistics are often hard to grasp. Part of the problem here is that there is such a range of house prices and if a number of high-priced homes sell in a given month, the data gets skewed.
But having said that, the main economic indicators like the employment rate and interest rates are favourable for a strong real estate market. Interest rates are expected to slowly rise and according to this article, when that happens, we will see a “modest slow down in real estate activity after having one of the best years on record”.
That’s my best guess anyway.