TEAM WEIR NEWSLETTER – FEBRUARY 2022
In keeping with our ongoing goal to ‘give back to our clients’, Team Weir is offering $100 gift cards to 5 clients who like our Facebook page, follow us on Instagram, or send us comments about your real estate experience with our Team that we can use on our website (no names will be published). Enter as often as you like. We will deliver the gift card from a business of your choice. We did this numerous times in 2021 and it was very well received by local business owners who have struggled during the Covid shut downs. Good luck with the draw!
Finally!!! Our local AHL Belleville Senators (Ottawa Farm Team) are open for business. We have tickets to give away to our clients. Great entertainment! If you would like a pair of tickets to some great seats, please send us a message today. Go Sens Go!
It has been an interesting few months in the real estate industry as the lack of inventory across most of the country, especially in southern Ontario, has fuelled an extremely over heated market. In fact, this is the lowest amount of homes I have seen available in my 25 years in the profession. The Canadian Real Estate Association, which represents 140,000 Realtors nationwide, supports this observation in their recent article Canadian Home Buyers Face Record Listings Shortage to Begin 2022.
If you want to know where the hottest markets are in Ontario, other than Toronto, check out this Canadian Real Estate Magazine article. You can find lots of other good information there as well.
In our market specifically, the last 2-3 months have seen a record low inventory of homes push prices out of reach for a lot of local buyers. The hardest hit are local first-time home buyers who can no longer get into the real estate market due to the high prices of what used to be considered ‘entry level’ homes. Hence, more people continue to rent and, of course, that higher rental demand has pushed up the price of rental accommodation as well. The following graph shows how local Quinte market prices have increased over the last four years.
In the last few weeks I have seen numerous multiple offer situations where there have been numerous out of town buyers competing with one local buyer for the same home. Rarely can the local buyer compete with higher offers from out of town buyers.
Another drastic change in the home buying process has been the elimination of conditions in offers associated with competing offers. For example, we very seldom see an offer ‘conditional’ on satisfactory financing and/or home inspection. In fact, it has gotten so bad for home inspectors that, in Ontario, it has been estimated their numbers have dwindled from over 800 inspectors in 2017 to about 80 this year.
Of course, the lack of a financing condition can also prove to be ‘risky’ if a buyer grossly over pays with a ‘cash offer’ and the subsequent bank appraisal does not support the offered price. In some cases, the transaction may not close on time, or not close at all, because the bank will not finance the home for the amount the buyer needs. This obviously puts the seller in a bad position as well because they may have already purchased another property, hired movers, etc.
With US and Canadian central banks indicating an increase in interest rates in the near future, I would suggest the high prices will continue to climb as buyers try to secure homes at today’s lower mortgage rates, as opposed to the higher rates that are coming soon.
Whilst I don’t envision the prices of homes going down in the next 2-3 months, there could certainly be some pull back on values by the end of the summer.
Finally, I would like to say that our high prices are driven by a true lack of supply. There are not enough homes for the numbers of Canadians who want to buy into the Canadian dream. This problem cannot be solved by more taxes, artificially inflated qualifying interest rates, or more ‘government chatter’. We need to ramp up the supply in a serious fashion so Canadians have more affordable options when it comes to determining how they are going to fulfill their dreams of homeownership.
David Weir BA, CD
If you are not thinking of selling right now but want to improve your home for a future sale, renovating a bathroom is a good investment for selling later. After the kitchen, bathrooms are the most popular item to renovate in a home.
Here are some stats that may give you an idea of what others are thinking and doing.
These findings may also help you decide how you would like to spend your time and money to make your home more appealing to prospective buyers.
The following is an excerpt from the article What Homeownership Looks Like for Younger Generations as published by REALTOR.CA and written by Ainsley Smith.
The COVID-19 pandemic has paved an unexpected path to homeownership for many young Canadians. Sure, mortgage rates fell to historically low rates, but a severe lack of supply and highly competitive sellers’ markets meant many Millennials and Gen Zers were left watching from the sidelines.
As restrictions loosened and life returned back to “normal”, demand for housing increased, pushing prices up in the process. As of November 2021, the average price for a home in Canada was $720,854, a 19.6% year-over-year increase according to data from the Canadian Real Estate Association (CREA).
So what exactly does homeownership currently look like for younger generations?
When it comes to where and how younger generations are choosing to live, it turns out they’re forced to be more practical. Austin D. Titus, real estate broker for Century 21® First Canadian Corp based in London, Ontario, explained while he hasn’t noticed “too much” change in terms of homeownership preferences, he has observed younger demographics are more flexible and understanding of what they can actually afford in current market conditions.
“Often, first-time home buyers or younger generations are less likely to feel comfortable doing renovations and want more of a move-in ready option. I would also say younger generations don’t want much yard work or maintenance,” explained Titus, who added condo living can be an attractive lifestyle for this generation of buyers.
Titus also said as a result of the pandemic, young buyers are looking for homes with additional office or outdoor spaces—a trend that wasn’t as popular before.
Regardless of age, getting into the housing market is a lengthy process requiring a lot of patience, time, and money. But understandably, it can be even more challenging for younger generations if they don’t have adequate savings to compete in today’s market.
Titus says he thinks it’s extremely difficult for younger generations to get into the housing market because they’re dealing with much higher housing prices compared to two or three years ago. Wages aren’t increasing at the same rate as inflation and there are high expectations of first-time home buyers from parents.
“Unfortunately, I also feel buyers are expecting their dream home as their first property,” explained Titus. “In our initial consultation, a lot of what is discussed is actually breaking down the barriers of expectations versus the reality of the market. Parents often put the expectations on their children of what is acceptable versus not in a home and it’s often my job to paint a very different picture.”
Please visit What Homeownership Looks Like for Younger Generations to read this article in it’s entirety including a list of current programs available to first time home buyers and younger buyers.
DID YOU KNOW?
New Zealand has more cats per person than any other country in the world.
The yo-yo was originally a weapon used in the Philippine jungle.
Rabbits can see behind them without moving their heads.
A group of stingrays is called a fever.
Reading rewires your brain for higher intelligence and empathy.
Beaver eyelids are transparent so that they can see through them as they swim underwater.
If you type the word “askew” into the Google search box, the entire page will tilt slightly.