How homebuyers can navigate the housing market upheaval
Buyers now face a severe lack of choice as falling prices deter some sellers from listing their property
A lot can change in a year. It's a hard lesson homebuyers and sellers are learning as they navigate an upheaval in the housing and mortgage markets that virtually no one saw coming.
While some might have the luxury to wait until the market stabilizes, certain life events and changes in one's financial situation, known in the real estate industry as the "Four D's" - death, divorce, debt and downsizing – mean the pressure is on for some buyers and sellers who need to relocate.
"Those four factors mean that there is always going to be some base level of transactions that occur," said Scott Ingram, a realtor with Century 21 Regal Realty.
"There are always people that will need to transact (or at least are a lot more motivated to do so)."
The more motivated a person is to buy or sell, the greater the importance of having a real estate agent and mortgage professional who know the market, your goals and will work in your best interests, he says.
The rapid jump in interest rates and the fact that home prices don't always go up might be familiar territory to older buyers and sellers, but these are generally new phenomena to younger Canadians. The last time interest rates were this high was in 2008.
"This recent rate-hiking cycle should be a subtle reminder that the world can be an unpredictable place and you should always be cautious about buying too much house," said Steve Saretsky, a realtor at Vancouver-based Oakwyn Realty.
Avoid bidding wars where possible
Buyers are also now facing a severe lack of choice as falling prices deter some sellers from listing their property. December marked the lowest level on record for new listings, according to the latest data from the Canadian Real Estate Association.
"New listings remain very scarce but buyers should not be panicking and competing in multiple offers. There will be more listings coming in the spring market and interest rates will remain elevated throughout 2023, there is no reason to rush and buy. Get a house that you're going to be happy in for the next 8-10 years," Saretsky said.
Meanwhile, Nasma Ali, a broker and founder of One Group, agrees that getting into a bidding war is not in the best interest of a buyer, especially if they're under pressure to find a property.
The best way to avoid competition is to consider homes that don't have professional staging or have poor photos in the listing, she says, and to "use your imagination to look beyond the furniture and funky wall colours. Chances are most buyers aren't and the seller has been growing somewhat desperate."
Michelle Zadikian is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @m_zadikian.
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