The Market is Turning - Update May 2022 - Martin Velsen Real Estate Team

The market has taken a turn.

We don’t know for how long or how it will affect prices but we are seeing a significant drop off in interest in all price points. The general feeling is that the prices are remaining strong but as we see a decline in showing activity and therefore a reduction in offers, prices will inevitably soften.

We have been through similar market changes in the past and on the west coast, the market correction (ie:price drops) have been minimal and currently we still have more demand than product so I don’t think that the bottom is falling out.

What is important is that you evaluate your needs in regards to the sale timeline and price and if required, make an adjustment ahead of the market. Chasing the market down is a painful experience and at the end of the day does not produce better results.

At this point, in our area, some sellers will feel that the price has dropped because they are now selling for less than their neighbours but this is really a false market expectation. We have seen on hundreds of cases with multiple offers where 1 offer was at asking, 4 or 5 offers were $30-50k over asking which is what I would call the real market value and 1 was way over asking ($100,000 or more). Buyers put in over-the-top offers for many reasons but it is usually after experiencing the frustration of being beat out too many times and this time they want A HOUSE! Any house… they just need to purchase a place to live.

So…the market value, what the average person would pay for your home, could be lower than the neighbours home that just recently sold.

The other item to keep in mind is timing. We are accustomed to seeing ‘instant’ sales and if a home is on the market for 3 or more weeks we are asking what’s wrong with the home. Today, the average time to sell a home (home, condo, townhome at all price ranges) is 21 days. Over the next few weeks and months, I believe we will see that increase and eventually move into the 60 – 90 day range.

The last item for today… Interest rates. As they climb we see some buyers priced out of the market and we also see investors taking a cautious look at rates of return so this will temper the market somewhat.

If you want to discuss your property specifically, reach out and we can chat, zoom, text email or even meet for a coffee.

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