Here are my predictions for the end of the year.
It’s only three months till the end of the year. That’s right, in the world of real estate and most businesses really, most of December does not count. Not much business gets done in the last two weeks of December.
The fall real estate market is already ramping up. I already can tell that there are more listings, more showing and that means more offers and more deals to be done in the closing months of 2015.
A horse racing analogy
When I was a young man, I used to go to the horse races. I, like every other gambler, always tried to beat the odds, I wanted to win and win big. On different nights, I’d bet on the favourite. I’d bet on the second favourite. I’d bet on the tallest horse. I’d bet on the jockey wearing yellow. I’d bet to win. I’d bet to place. I’d bet to show. The exacta and trifecta were far too complicated and expensive for me.
After the bets were placed, the horses would be in at the gate, the shot would be fired and they would be off. It was exciting. The first turn, along the back stretch and then around the final turn and into the home stretch, and finally across the finish line. Sometimes, I would win. Often, I would lose. I only mention it because this is the home stretch time of year for real estate. We have just rounded the last corner and the finish line is in sight. Hang on. This is where it gets really exciting. We are into the home stretch.
Here’s what is going to happen in the next 12 weeks.
Properties will sell faster
I’ve already seen this start to happen. Yesterday morning (at 11:30) I was out showing houses with a new client. There were five houses on the list, all new on the market in the last three, four days. (We had booked them all the evening before). Before we even set out, I had a text that one of them had an offer registered. Before we were finished, there was an offer in on another that was subsequently sold today. One of the houses without an offer really stood out and I am sure it will be sold, but they are not accepting offers until Monday (who’s competing?)
Inventory continues to be in short supply
It’s a seller’s market. It has been for a while, a long while, but it especially is again now. Yes, I know the varying degrees of sellers’ markets – the good, the bad and the downright ugly.
We forget that the inventory of homes to buy expands and contracts at different times during the year. Homes get listed in the early spring, get sold in the mid to late spring and then during the summer latecomer homebuyers pick over the leftovers. The second wave of inventory, a smaller (but more interesting one) is heading for us now. Inventory will expand, buyers will buy and then things will settle down again.
Eventually they will go up, but clearly that won’t be anytime soon. We are good till the end of the year.
Single family homes will sell faster than high-rise condos
In Kitchener Waterloo, high rise condo owners have learned that it is easy to buy but harder to sell. Those who have bought high-rise condos in (say) the past five years who now want to sell, are surprised that they cannot attain what they thought they would (or were told they would) in terms of appreciation. They are also competing with four brand new condo high-rises in downtown Kitchener. First time condo buyers and investors typically would rather buy new than used.
(Psst, hey buddy, single family homes are a much better deal.)
Prices will rise
The “this month over same month last year” numbers that the real estate boards love to put out always show prices rises of 4, 5 or 6, 8%. Prices are going up. That’s the fact, Jack.
People will continue moving here
The Region of Waterloo is growing. Like it or not, we are on the map now for Toronto area young families who are looking for affordable homes and better lifestyles. New Canadians, downsizers, investors, and new graduates who previously might have moved away, are buying homes in Kitchener Waterloo.
Low oil prices will actually increase demand for Ontario homes
I’ve had two clients from Alberta buy homes in KW this year. I didn’t have any Alberta clients last year, or the the year before that. Maybe its a coincidence. But I don’t think so.
The core will outperform the inner suburbs
Lots of people want to live in the city centres. Generally, between Weber and Westmount, Columbia and Ottawa is the hot zone. A desire for walkable neighbourhoods, the LRT, the GO train, the Iron Horse Trail, Google, the Tannery are all reasons stated.