No matter the market, whether high activity or low, there are real estate sellers and buyers that need to sell or buy.
- A family that has out-grown their space and need a bigger space to upgrade their real estate need to sell their current home and purchase another.
- Seniors who wish to down-size their space must sell and buy another
- Job and career relocation. There are sellers whom must sell to relocate and or buyers whom must buy to move in to a new job.
- Immigrants, who came with families and are in need of a space, has been a highlight of Canadian economy boost.
- Unexpected incidents such as divorce, loss in family, family disputes are another cause of a house for sale.
- In lower market we also come cross to foreclosure & bank owned properties that must sell.
- Positive changes in life are also encouraging for real estate activity, such as wedding, pregnancy, and or career promotion.
These are the few example that separates real estate from other economy dependent markets (retail, and service). There is always opportunity to buy and sell in real estate.
As a homeowner, It is important to understand the market and its demands prior to list and price any homes.
The trend shows even in this market (a buyers’ market) , no matter the property type, if a property is priced attractive, it sells very quick and in some cases brings more than few offers.
We are seeing tremendous change in real estate from beginning of the year to its end. The sale ratios and number of activities are dropping, but yet, it is important to understand that there are yet activities and those activities, define the current value.
For sellers instead of looking at a back mirror, it is important to define the pricing toward this moment, not last month activities.
- First time buyers
B) Developers and flippers
The questions for any of these buyers when looking at the prices are:
- Is the market going to go further down including the prices?
- How far should I negotiate this price down?
The answer to the first questions is unknown. But based on trends there can be predictions.
Vancouver market in general is a little different than any other metropolitan cities in Canada, like, Toronto or Alberta.
Toronto is a big city that attract immigration, job opportunity, and developments, and Alberta is also an industrial attractive city with lands offering.
These cities both depend on federal and global economy and are not limited in lands.
Vancouver on the other hand, is surrounded with mountain on one side and ocean on the other with limited land availability. Also, based on its climate and nature, is a perfect attraction for retirees, nature and ocean lovers, mild climate seekers and in addition because of it close proximity to US and its gigantic tech industry, is a haven for IT investors.
Traditionally when a market slows down in sales and goes toward the buyer’s market the stages are: price drop, lack of sale and high inventory, then the stage of foreclosures, bankruptcies, money loss and “I told you so”, which is the rock bottom. Question is where are we with this traditional market fluctuation?
To answer we need to review what causes the turned down in market:
- Local government influence and meddling by introducing additional Foreign buyer’s tax, Vacancy tax, Speculation Tax
- Bank of Canada’s interest rate hike and lending regulation change
These two hand in hand suddenly cause the direction of market’s wheel, but for how long?
Since the influence of market change was not a natural economic way and other Canadian provinces don’t necessarily have the same experience, this change is not nationwide.
So is it temporary or does it yet follow the traditional fluctuating market?
As a buyer, since Bank of Canada declared the interest rate hike to go up at 3.5% gradually, why wait for that assumed rock bottom. Instead why not negotiate the best price possible now? If you are yet taking advantage of low interest Canadian mortgage (which is much lower than US), why wait. Offer the suitable price. (a price that you have investigated, analyzed and also are expecting to drop at your “assumed rock-bottom”).
Looking at the bigger picture and provided evidence of real estate growth, because of economic inflation, real estate will always increase in value in time, despite of many hiccups and bumps during the time. The chart of price value in time always growth, even if it goes down for a period of time, it recuperates and more. So the main question a buyer should ask instead of “Is the market going further down?” Is how far can I and will I keep the property?
The answer to this question, determines all your motivation.
So why wait longer, and not taking advantage of low interest rate, by offering the price you seem fit now.