If you’ve been hoping to enter the housing market this year, it’s been tricky to break into. Between high demand and skyrocketing prices, many buyers have had to wait for things to settle before making their move. So, is fall a good season to go house shopping? This season is looking a bit more promising for buyers. Here’s what you need to know about buying this autumn.
The Barrie fall market
With the September interest rate hike that brought the overnight rate to 3.25 per cent, borrowing and making mortgage payments has gotten a little more pricey. This, in combination with high inflation, has put some financial strain on Canadians. However, it also means house prices are falling as demand drops off. In Barrie, the average sold price across all property types is about $720K, according to Zolo. This is a five per cent monthly decrease, and a 12.8 per cent yearly decrease, meaning home prices are getting cheaper as more time passes.
Homes are spending an average of 27 days on the market, with a 96 per cent selling to listing price ratio. Homes are staying on the market longer, and are selling below the asking price in many cases. There are also more homes on the market than homes sold in the last month, so supply is up and demand is down. With all this information in mind, what does it mean if you’re a potential buyer in Barrie this season?
Benefits of buying in the fall
An easier market to enter
House shopping in the fall, particularly this year, means the market will be a bit easier to break into. Due to interest rate hikes and inflation, demand for housing has dropped off. This means fewer buyers are looking to purchase a home, so if you’re hoping to buy, you will not have as much competition from other buyers as you may have had earlier in the year. Thanks to demand lowering, supply has increased as a result, and there is now a much bigger selection of homes on the market.
As we mentioned, homes are staying on the market for an average of 27 days. This is a much lengthier stretch of time than the quick turnarounds we have seen in previous months and years, and it’s largely because there aren’t as many buyers as there are homes for sale. Finally, prices of homes have become a bit more manageable for house shopping, especially if you’re a first-time home buyer. As prices lower, they are coming back within reach for more buyers, so house hunting this fall means experiencing the current drop off of housing prices.
More availability of professionals
Since there is generally less demand in the fall, this means more availability of professionals in the real estate industry. Lenders, agents, lawyers, and brokers are all an important part of the buying process, so it’s great when they are able to devote more attention to your individual situation. You will likely have quicker communications and a wider range of daily availability, which will help achieve the most efficient buying experience. Of course, these professionals always dedicate themselves to their clients, but during the slower season they are just able to take some extra time for you!
Sellers have less of an advantage
As we mentioned above, buyers are starting to gain an advantage in the market. This means sellers no longer have complete control over buyers, giving buyers greater power for negotiating. At the peak of the seller’s market, homes were selling for far above asking, with no-condition offers, no inspections, and sometimes people throwing in offers without a viewing, just to enter the market. These are risky moves, but now that things have settled down, house shopping doesn’t have to be that dangerous. Without as much fear of missing out, you can take a bit more time to view the home and have it inspected, and work out negotiations with the seller to make you both happy.
Things to keep in mind
Current interest rates
As nice as it is to see housing prices drop, it comes at the cost of higher interest rates. The Bank of Canada is combating inflation with rate hikes, so borrowing today is more expensive than it was at the start of the year. Rates are still low compared to history, but they have risen quickly, making many Canadians feel a little unsteady. We’re not sure if the bank plans more rate hikes this year or in 2023, so there’s no guarantee of the rates borrowers could be looking at. Keep in mind that rates will lower in the event of a recession, which many are predicting to hit in the next 12-18 months, but it’s important to consider how rates affect you now.
Inflation affecting finances
As we mentioned above, inflation has become a big issue in Canada. The cost of everything has become a bit worrisome, whether you’re buying groceries or filling up the gas tank. If you plan on house shopping this fall, consider how inflation will affect your budget. With the cost of goods rising, can you afford to buy a home as well, or will it stretch your finances too thin? Many Canadians are trying to save their money right now, so be sure a home is in your reach after you take your other expenses into account.
House shopping this fall can be an exciting event. With the leaves turning and the weather cooling, it often makes for perfect weather to be out and about exploring homes. It also has its advantages in terms of pricing and demand. However, be sure to examine your own situation before committing to home buying this season. If you aren’t sure where to start, you can reach out to me!
If you’re looking to get your homeownership journey started, get in touch with me here.