Mid-July Market Update

My two cents on what's happening out there...

Mid July and it now seems that Summer has arrived on the West Coast. In addition to all the obvious benefits of warm and sunny days, it also appears to stimulate the Real Estate market. Buyers and Sellers are more active, they get outside and changing their address becomes a topic of conversation.

BUT…with an unbelievable increase of 1% in the bank rate three days ago, some buyers are literally unable to purchase while others are being cautious and with the, now very obvious, down-turn in the market I see and hear a lot of “… I’m going to wait and see before we do anything”.

And then, at the same time – I booked 9 homes for a client to view and we could only see 5. The rest were sold or had offers. That was on Wednesday and since then 1 more of those has sold. So, there is still activity. Homes are being sold and that coupled with the increase in housing inventory makes for more activity which leads to more home sales.

The part that appears to be most confusing is that 3 months ago there were 6-10 buyers for every home with a bounty of multiple offers and now, for the most part, that’s over and we are dealing with offers as they come in. Where did all the buyers go? Where are all those buyers that didn’t get a home? It’s about consumer confidence and about qualifying for the mortgage (see paragraph 2).

I’ve been listening to and reading about this market and how it compares to historical changes and if you are interested, Ray Dalio has a very easy-to-understand conversation style and he has done a series of YouTube episodes that really clear up what we can expect. (by the way, he’s one of the richest 100 people on earth and manages the largest Hedge Fund). Everything is a cycle and it won’t be exactly the same as the last ones but there are lessons. Here’s a link Ray Dalio

In our area, Real Estate will take a dip. It already has in the higher priced homes, condo’s and raw land but I don’t think it’s over. If you want to sell in the next couple years – do it now and price it ahead of the curve. If you are ok to hold on for 3+ years, you can stay firm on price and wait it out.

If you are buying up (a more expensive home), this is a great time for you as the higher the price, the more it has and will be reduced. The bread & butter of homes at $600k-$800k are still in demand and I don’t see those being reduced by much at all.

We are still busy fielding calls and inquiries about buying and selling and the market hasn’t tanked, it’s changed. If you’re selling, compared to a couple years ago you’re up and you may be up $300k or more. It’s all about perspective. And if you’re buying, base it on what you can afford, follow the prices and realize that its as much about getting the property as it is about not overpaying. I remember a conversation with an owner that bought the property across from the waterfront because it was $28,000 and the waterfront was $30,000… Now the non waterfront is worth $1,000,000 and the waterfront is double that.

All the best,
Martin, Andrea, Anna, Rachel & the rest of the team

2021 Housing Market – Nanaimo

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