Real Estate

  August saw a further decline in Real Estate values in Southern Ontario.  The graph above shows average Home Price Index values for Niagara (red) and GTA (blue).  Rising interest rates are the dominant factor impacting the housing market.  The recent rate hike (Sept 7), and messaging from the Bank of Canada that Oct 26 is more than likely to be another rate hike, is likely to drive the Southern Ontario Real Estate market down even further.

 https://www.bankofcanada.ca/2022/09/fad-press-release-2022-09-07/ Yesterday the Bank of Canada raised the key interest rate by 0.75% to 3.25%, and has indicated that the rate will likely need to rise further (the next rate decision is October 26).  For perspective, the Bank of Canada had slashed the key interest rate down to 0.25% during the "Covid years", which had a perhaps-unintended outcome of causing real estate prices in Southern Ontario (and many other areas of Canada) to skyrocket from June 2020 to March 2022.   Rising interest rates makes mortgages harder for Buyers to qualify for, and mortgage payments higher.  During the past 5 months - as interest rates have been rising - we've seen a direct correlation with a steady, significant decline in real estate prices throughout Southern Ontario off of the February/March 2022 high.  Yesterday's 0.75% hike indicates that, most likely, real estate activity will continue to be slow into the Fall, and house prices wil

Sell first or buy first?  Many people, when looking at buying and selling, feel very hesitant to sell before they buy, and prefer to find their "perfect" house and make an offer with a Sale of Property condition [A Sale of Property condition states that, if a Buyer's house does not sell within a specified timeframe, their offer is nullified]. However, what many Buyers do not understand is that there is a cost to every condition that they layer into an offer.  I like to term this as the Cost of Conditions.  The Cost of Conditions is best explained by example. Lets say YOU have your house for sale for $900,000 (you are the Seller).  After a few weeks on the market, you receive 2 offers: a cash offer (NO conditions) for $875,000 , or an offer with a Sale of Property condition for $910,000 ... and the buyer's house is not even for sale yet (believe it or not, this is typical).   If you take the cash offer, you are SOLD, done, and can immediately move on with your life