Jacob, realtor with Oakwyn Realty in Vancouver BC provides his assessment of the fall real estate market, along with presentation of the latest housing statistics. We’re now entering the fall market so Jacob wanted to provide his take on real estate and what’s going to happen in the last quarter of the year.
So let’s first talk about the real estate board stats which were just released. When comparing previous months total sales to the same month in 2021, we’re seeing about a 40% drop in activity. And if we look at the 10 year average, sales are down about 30%. This has been the trend for many months now. We went from a crazy hot market in 2021 to a more balanced market in 2022.
Yes we are seeing a massive drop in sales, but we’re also currently experiencing a 20% reduction in homes being listed on MLS, compared to the same period last year. This will slow the build-up of properties on MLS. The reduced amount of properties available will somewhat keep prices stable.
Something important to note, based on the stats, more of the downward pressure and slowing market is in detached family houses. Condos, townhouses and likely duplexes are still fairly active.
That all being said, as of yesterday, the bank of Canada just raised interest rates another 75 basis points. With the previous hikes and this new round of increased interest rates, a few things are expected to happen.
First of all, cost of living has been increasing with high inflation. For many people mortgage payments will be increasing, plus the cost of servicing other debt. This will push some owners in the red, causing some to sell their real estate.
Secondly, with the higher rates, buyers will quality for less money. Home ownership is just more expensive for everyone relying on mortgages to buy real estate. Also, less people will be inclined to pull equity from currently owned real estate to purchase other investment properties. Money is no longer as cheap.
So what does all of this mean? We’re going to see more homes being listed for sale while at the same time, slightly less buyers in the market. This leads Jacob to predict home prices will not be going up for the rest of 2022. Instead, we’re likely going to see a buildup of inventory and some light downward pressure on prices for the rest of the year.
With the changing real estate market, Jacob feels it’s more important than ever to work with a Vancouver real estate team which focuses on the presentation of your home and premium marketing. In the video he provides an example of a recent sale which highlights this fact. They recently worked with a client who was onboard to embrace their marketing plan. It included decluttering, fixing, painting, and brining in a small amount of home staging. The owners put in a lot of hard work. The end result was the home looked amazing! Jacob & Jacky brought in the best videographer and photographer to create the most premium marketing. The home sold within a few weeks. About a month later, Jacob observed all the other homes listed for sale at the same time were still on the market. He noted most of these homes were poorly prepared to sell. The homes didn’t show well and the photos were not appealing. Simply put, the result was these other homes did not sell and remained on the market.
The example above was testament to how important home preparation and premium is. Jacob and Jacky recently created a video about home staging and the effect it can have on your home sale. If you’re thinking about selling, don’t hesitate to reach out for a consultation!