So, an interesting phenomenon is happening, and that is people are feeling apprehensive and down due to thoughts of the interest rates being as high as they are – over 6% in the US, over 4% in Canada. When as recently as 6-12 months ago, they were around half those rates or less.
So that has people feeling like the real estate market isn’t so good.
Fact of the matter is this: the Pandemic Times of 2020 and 2021 had us at crazy low interest rates – in the 2s in the US, and down near 1.4 to 1.5% in Canada – crazy low almost free rates – and we got used to those. We got used to the almost free money. We thought it would never end. A little voice said it’s too good to be true, all this discounted almost free money, but we got complacent. We got used to it. We took it like kids being offered ice cream or chocolate. I mean, who wouldn’t? We liked it and it was a bright spot while we went through a period of extreme uncertainty in many areas.
And now, better times have returned. We can go to restaurants and we can go travel with reckless abandon. And, the cost of borrowing has gone back up. But we aren’t used to it. We want our ice cream back.
When we know very well many of our parents or our grandparents bought homes back in the day at 18% interest rates. And we thank them for it, because they bought houses that brought up their families and while they didn’t love paying 18% interest rate mortgages, they worked hard and they paid it and they owned homes instead of paying rent.
So that time is just like this time. We have the opportunity to do what we have always wanted to do – buy a home if the time is right for us, or sell a home if that time is right for us. We don’t have to wait for 2 or 3% interest rates to do what we wish to do. We can make things happen for us, with careful consideration and consultation with professionals and consultations with ourselves and discussions with our family and study and smart decision-making and strong negotiation. We can still accomplish what we want to accomplish. We can be aware of what the prevailing interest rates are, and we can still do what we set out to do.
Take my recent clients, for example. They called me, because they had a condo they had been trying to sell for some time, but it wasn’t selling, and this was putting a dent in their plans to move to Florida.
They had been planning to move to Florida for some time. This was a move that would put them closer to their families, and this was very important to them. They really wanted to make this move and do it in a timely fashion.
While their previous agent wasn’t able to negotiate for them the right deal that would be win-win for both them and the buyers, I was able to accomplish that within 3 weeks of us meeting. We got the property shown and sold quickly for the most the buyers were willing to pay. This week, they are packing up and this weekend they will be driving one way to Florida.
Interest rates are part of our environment, but not a barrier to achieving our goals. Like all aspects of our environment, it simply tells us how we can achieve our goals, not whether we can or not.
Do you have some personal goals for yourself that you are committed to achieving? Does one of these goals include a step that requires you to buy or sell a property? Have you been feeling stuck and feel like you can’t make this step work due to the current interest rate environment? Please be assured that I can help you in any environment. My real estate experience spans good times and so-called bad times. I cut my teeth on a market way worse than the current one – the Great Recession.
Our current market conditions are actually not bad, just not as frenzied and fast paced as the one from the last couple of years when we had artificially low interest rates. We all liked the low, low interest rates. We all like ice cream too, but there is a point when putting away the ice cream and throwing away the spoon is helpful. This could be one of those times, but it doesn’t mean we don’t eat at all.
Our current market conditions are normal and a part of the normal cycle. Whether you need to buy or sell a property, I can be your guide through it for the best possible outcome. I speak confidently about this as I have done it before for others, and I’ll do it again, and can do it for you. More important than ever, having an agent with skills and experience on your side is so vitally important.
To wrap up – here are my market stats in a nutshell:
Inventory levels are low. They were up for a bit then came back down again. There is a dearth of properties for sale.
For example – there are currently 336 residential properties Active on the market for sale right now.
Only 252 homes came on the market in the month of August 2022 (new listings).
232 homes went pending in the month of August. Almost all the homes that got listed sold.
Transaction levels are down. There are fewer players in the market right now.
For example, only 232 pending sales in August 2022, compared to 358 in August 2021.
These 2 factors mean there is a window of opportunity for someone who doesn’t follow the crowd, someone who studies the market and thinks and acts independently.
Inventory levels are down as there are few homes for sale compared to the population. Supply is low. Even while there are fewer transactions, there is not so much a build-up of home inventory. What little inventory there is – buyers are buying.
This will keep prices strong (low supply, still strong demand).
I say there is still strong demand because there are lots of people and they aren’t going anywhere and they need homes. Just check out how many people are paying higher and higher rents, if you don’t quite believe there is strong demand. People need homes!
If you want to sell, I can help you get a strong buyer for your property. I know this because I sold all my inventory already, I am looking for homes to sell.
If you wish to buy, don’t follow the crowd, and wait till spring, or wait for lower rates. When spring comes, or when lower rates come, you will have to complete with everyone else buying in spring, or buying when rates are low. Look now. Your dream home is there. Look while many others aren’t. Have yourself some strong representation, like by me or my team, who can advocate on your behalf. Get the house you want, at a fair price, and when rates go down, refinance and lock in a great rate – at your leisure.
I hope I didn’t offend by my shooting from the hip in this episode. I’m simply sharing with you this window of opportunity.
So be well, be safe, be confident, be strong, be focused, be goal oriented, be happy and pursue happiness. If I can help you in that pursuit, call me. I’m available.