For as long as I have been a Real Estate Professional, I have come to learn that the Media and the Real Estate Industry have always had a love/hate relationship. Mostly a hate relationship, and I am not sure why.
Real Estate today has had significant ups and downs, resulting in consumer uncertainty. But rest assured, it is still a healthy market, a changing market with low interest rates and balanced pricing.
Many questions have risen over the recent months due to media reports. Should I buy now or wait? Should I sell now or wait? Sellers still want the most amount of money for their home, some with unrealistic price expectations and buyers want the best deal with proper negotiation strategies in place. Many buyers are getting the best deal now due to our shift to a Buyers Market, one recent sale which took place in Oakville had a price reduction but still sold firm for $100,000 below asking price. A great deal.
I remember when I purchased my first home in Oakville over 26 years ago, prices were much lower ( for example, a townhouse was $169,000 at the hight of the market ) and mortgage rates were also high. Our first rate of interest was 14.24% for a Fixed 5 Year Term, amortized over 25 years. The purchase price was $169,000 for a small 1400sqft Townhouse in Glen Abbey which had a Maintenance Fee of $144.00 per month. ( Today, that same Townhouse SOLD for $534,000 & the Interest Rate was 2.85%, Maintenance Fees are also up )
Looking back, our markets seem similar, yet different, with escalation of home prices and much lower interest rates, the monthly payment seems to be the same. Many do not realize this. When home prices were lower, interest rates were higher. When home prices are higher, interest rates are lower. In the end, the bank collects the same but the consumer pays more and has a larger mortgage balance, meaning it will take longer to pay off the loan.
The early months of 2017 brought on a unique & chaotic Real Estate Market, where Multiple Offers produced higher than average SOLD PRICES, sometimes buyers paying $100,000 to $500,000 more for a home, and in the GTA one home sold for $1,000,000 more than list price. This was fantastic for the Sellers. If the Buyer put a 25% Downpayment on these homes, in today’s current market that deposit is basically wiped out because home prices have come down that much. Many buyers ( who purchased homes with other Agents ) are asking for re-appraisals in the event they have to sell. My advice is to stay put for about 5 to 10 years, as a new plan should be put into place. Speculators never win, anxious buyers never win but you did win if you were in Multiples. You got your home.
We are currently sitting to a Buyers Market in Oakville, with over 800 Homes Available for Sale between multiple Real Estate Boards, as OMDREB, Oakville, Milton & District, TREB/Toronto Real Estate Board and the Burlington & Hamilton Boards. Homes are sitting on the market for longer list days, which is the norm. Many homes are taking substantial price changes, 1, 2, 3 or sometimes 4 price reductions. Many homes also show up in the daily Cancelled Listings & Expired files, only to be re-listed at new Market Value or at the same price with different Agents.
A good number of these homes are brand new construction, purchased by Speculators who are trying to capitalize and earn a large profit of $200,000 or more. These listings are noticeable on MLS because they have Builder Rendition Drawings instead of actual home photos and possession isn’t way until the 2018 year. Some of these listings are being sold on Assignments, so be cautious of the fine print.
On a positive note, interest rates are still low, even with a slight hike, under 5% is not considered high when compared to the rates of the late 80’s or early 90’s. We are definitely headed into a true Buyers Market and it is your time to WIN. Buyers should take advantage and buy now with low mortgage rates, price reductions and the bonus of no Stress Test in December, you can negotiate on your terms. So why wait any longer for the right buy to come up. They are out there. There is an abundance of great inventory available, especially in Oakville to choose from! Call us today and lets discuss the many options available to you.
Wayne and Virginia Munden
Helping You Is What We Do
Royal LePage Real Estate Services, Ltd.
905 399 5910 Wayne & 905 334 1660 Virginia Direct