Autumn, my favourite time of year
In the Autumn months (mid-September till mid-December) we typically experience in Waterloo Region a mini spring market. It is shorter but extremely active. It usually starts the week after Labour Day and continues until a couple of weeks after Remembrance Day.
I think one of the reasons for our summer slow down and autumn rally is that we are an education centre. In July and August, our universities and our community college mostly clear out and as such, so do our cites. Real estate sales activity in August is always very very low (especially this year).
And, as a long time real estate blogger and the keeper of several spreadsheets, I’ve found that my google analytics and my own sales activity is a wonderful reflection of how the market is behaving. I’ve been keeping track.
Although the April surprise had a sharp and obvious impact on Ontario real estate, many of us who are watching the market think that the correction has been made and I personally see no reason that this year should be any different than past years, at least in terms of autumn sales activity.
My predictions for the Autumn real estate market
1. Prices will go up
I know what you are thinking. “Prices will go up? Keith’s crazy. He doesn’t know what he is talking about.”
Well, I might.
Statistically, prices have already fallen – some would argue almost to close to last year’s level. Some would say that much of the gains that were made over the winter and early spring, have been wiped out since the end of April.
I don’t completely agree
But to be fair, you know and I know how statistics lie. The numbers only are a good refection of what sold in a given month. Maybe over the past three four months, nothing fabulous and expensive has sold. I know that sales volume was way down. Prices are soft and competitions is weak, but they aren’t really back to August 2016 levels.
Instead of quoting statistics, here is some anecdotal evidence from Waterloo Reddit.
2. It could get competitive
Although this year February-April was nutty beyond reason – (i.e. Offer nights generating dozens of offers and homes going for 30% over list price), I think our autumn market will catch a lot of buyers off guard.
People believe what they want to believe. And currently buyers believe that it is a buyers market. It isn’t. We are heading towards a balance market which means the best houses, priced right may very well generate competing offers. The spreadsheet that I keep for all houses that I visit, showed last month that houses that my clients were interested in seeing, got on average more than 5% over list price. When the market changed, a lot of houses didn’t sell, but the ones that did sell, sold for over asking price – at least the ones that my clients liked did.
The market is still competitive. Just talk to anyone who bought a house recently.
3. Life is long but time is short
It’s a sprint, not a marathon.
When I meet with new buyer clients, I often tell them that buying a house is like a marathon. It is a test of endurance. You have to see a lot of houses. You have to learn a lot and you have a lot to learn.
The spring market starts in mid-January and goes until mid-July essentially. That is a full six months. The autumn market is three months long at best. We will be half way through it before you notice.
It’s a half marathon, not a marathon.
4. Rates and rules
I was surprised that interest rates went up again last week. This will impact anyone with a variable mortgage. I was surprised that they went up because they had just gone up for the first time in six years. So I thought the B.O.C would take a break and wait to see the impact.
But they keep tinkering with things. Don’t they know that the real estate market is huge, like a big ocean liner – it takes a long time to turn around and they keep tinkering – maybe they are going to over-correct it.
Ontario may follow BC and draft rules to disallow real estate agents from double-ending. I actually agree with this, but I don’t like the tinkering.
Call to action
The Autumn classic is here. Lace up and get in the game. Don’t wait till the second half. Contact me today!