It’s beginning to look a lot like Christmas! Well officially it is now we are heading towards December. However the Mcinnes Marketing households have been looking like Christmas since early/mid November. However incredible we may be at Real Estate, we lose this battle on a year in year out basis with our significant others. Significant others, if you are listening, we love you.
But more to the topic of the above title. Now we are coming to the end of the year, a lot of you out there will be planning your 2020 year ahead, especially if you plan to buy/sell real estate at some point in the new year.
Maybe you have been watching the market and seen the average sale price in your area drop. Maybe you have been waiting for the market to show signs of life that are now making you think about your original plans to sell? +Regardless of the why, it’s important to plan appropriately and with realistic expectations!
For example, let’s take a look at some price corrections in various areas. For the sake of the below, we’ll take a 2 bed, 2 bathroom apartment.
October Average Sale Price:
Now there are two ways to look at the above. If you are a seller, it’s easy to look at this and see the numbers have reduced. However you have been hearing the market is back on the rise again with more sales happening due to home buyer demand picking up. You may have even seen homes in your neighborhood come on the market and sell fast!
Don’t then assume that the market is now back on the up and we are going to hit a stride like we did a few years ago, so now it’s just a case of waiting until Spring or the Fall next year and your price will be right back up there! Market activity has been a lot better recently yes, but last month the Home Price Index only increased by .02%. Yes if the numbers are still positive over the coming months this will change things, but don’t assume you are going to gain an extra 10-20% on your home value next year. Nothing is worse than expecting your property to be a certain amount and being told it’s not. This usually involves a seller taking it personally, blaming the Realtor, sulking for a time before realising the Realtor was actually right. Well, that or they list it and it sits there for months on end.
As a buyer, it’s SOOOOOOOOO easy right now to come across articles, facebook opinions and pages screaming things like “fear of missing out!”, “Recession”, “Market Hiccup” and so on. If you surround yourself and take these opinions, key word opinions, as truth. You could have a really nasty surprise when it comes to buying! The truth is, trends affect the market and the market has taken its dip and is currently rebounding. So the most likely two things to happen here are the following:
- Prices remain buoyant and hover around similar levels
- Market activity continues to increase and upwards pressure is put on property
Neither of these options result in the market decreasing further. If you are wanting that as a buyer, you are currently hoping for a recession or something of a similar scale to happen. The truth of the matter is, product is moving, so there is no downward pressure on prices. Worst case scenario here, you see a home you like for $900,000 today and expect it to be less in Spring; Unless option 3 happens, your best case scenario is the price remains same ……. AT BEST!
In summary, if you are a seller, start planning your home sale based on a worst case scenario, that way, any market improvement comes as a plus! Unless something drastic happens to the market, basing your sale price on current levels is a good place to start.
If you are a buyer, start arranging your finances to get your pre-approval in the new year. Don’t underestimate mortgage qualifications these days. It’s not a case of just filling out the Scotiabank online Mortgage Calculator. On top of that, start looking at prices now for property you are interested in, and plan that these are your best case scenarios.
We hope this helps set you up for success! If you want to have a more personalised discussion on how you can prepare for your real estate journey next year, feel free to reach out on any of our contacts below. Real Estate is always best to stay ahead of the curve!
Until next week,