Across Canada, consumer confidence in housing weakened over the past three weeks. The results have been obvious. No offers or low offers arriving on offer night. Re-listing properties at adjusted prices which are sometime substantially higher, sometimes tens of thousands of dollars lower than the original. The average number of days on market is stretching and the inventory of homes for sale is swelling.
We are still in a seller’s market, with less than one month’s supply of homes for sale in KW, but things have changed. That is obvious.
What? Why now?
A recent Nanos poll suggests that consumers in Canada changed their outlook on real estate due to two things:
- Home Capital Group’s recent difficulties
- Ontario’s Fair Housing Plan.
The world according to Realtors
When I talk with other realtors, we agree that we have been this before. When Rim/Blackberry melted down less than a decade ago, we were here. What happened then was that prices and the number of sales flat-lined for a spell. Local buyers and sellers stayed home, waiting for the smoke to clear before venturing out to purchase or sell real estate again. After a spell, we all realized that we are much bigger than Blackberry and everything quickly went back to business as usual.
Prices are sticky
The same kind of thing happened in Alberta a few years ago when the price of a barrel of oil fell to half of what it was and the unemployment rate doubled.
What happened to real estate then? The number of houses on the market expanded, as did the average days on the market, but it took 18 months for prices to fall substantially. Prices are sticky. That’s all I’m saying.
What should consumers do?
For home sellers, I would suggest taking advantage of the Seller’s market. Although the best time to sell was two months ago, the next best time is now. You still can take advantage of the price increases that happened over the past 15 months.
For home buyers, don’t wait for the bubble to burst. Don’t wait for a crash that won’t come. There are opportunities out there for you now. Act, while everyone else waits. This might be your moment.
Or everyone could just wait. I could use the rest.