By far, the past couple of years has been some of the worst times in real estate. The pandemic forced people to stay in their homes, and stay they did! The number of listings is the lowest it has been in many years. With interest rates incredibly low and many people wanting to get into the market, the demand on homes has gone sky high. A perfect storm generating a very strong seller’s market.
New buyers are quickly having their dream of home ownership pushed away from them as home prices rise. Without an adequate supply of homes to choose from, the ones that do show up are selling well above the listing price and are often subject to bidding wars. In just one year, the price of homes jumped over 20%. i.e. a $300k house at the beginning of 2021 would now fetch about $360k (or more).
It is disheartening to also learn that more than 30% of the active buyers are those looking to invest in rental homes. They usually have more than 2 homes in their possession and buy the homes strictly as rental properties. These buyers typically have a lot more buying power than a first time home buyer and are more able to bid on a house with no conditions – a very risky proposition for most people buying. There are some rumours that there will be some restrictions imposed upon these buyer by the Government shortly to help curb this activity and give others more of a chance. More to come on that.
Sellers find themselves in a catch 22 situation. Many sellers are looking to move up or down and not get out of the home market altogether. So, in order to sell, they need to have someplace to go to. So they find themselves in the buyer column, also struggling with competing offers where a condition on sale of their property will almost never be accepted when others are willing to buy with no conditions. So they must wait it out until their financial situation changes or they are willing to risk the sale without the condition on sale of their current home.
As an agent, we are ready and willing to help out both sides but there simply are not many opportunities available. We also must wait for the market to become more balanced before we can really be effective.
The good news is that things are always changing. This market will adjust and more opportunities will become available again. Policy changes, economic changes and the subsiding of the pandemic are all things that can and will change the market. Let’s just hope that those things that make positive change come soon! For everyone’s sake.