June 2024

 


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Real Estate continuing to soften in Southern Ontario

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The data is in and compiled for the month of July, for all regions of Canada.  Niagara (the red line, below) prices softened 4.9%, Greater Toronto(the blue line, below) to a lesser extent. Based on this data, house prices in both markets (and in general, Southern Ontario) have fallen to where they were in late Fall 2021.  With interest rates having risen back to normalcy, it's unlikely that house prices will return to the March 2022 peak levels anytime soon.   As a seller, it's important to bear in mind that house prices are still dramatically higher than they were 3 years ago, so there is still plenty of equity gain for you to take advantage of when selling your home. As a buyer, you can take comfort that the days of holding offers, bidding wars, etc. are gone, and that you are in a reasonable negotiating position.
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Buying: The Cost of the Sale of Property Condition

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
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Bank of Canada raises interest rate 0.75%, indicates a further rise likely

 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
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