How to Navigate the Shifting Canadian Housing Market
The real estate market has been sizzling hot for the past couple of years, with low inventory across the board and stiff competition among buyers. Spring 2022 data from the Canadian Real Estate Association (CREA) revealed major changes in store for the Canadian housing market. The sales-to-new listings ratio is at its lowest level since April 2019, which means that home inventory is finally increasing after an extremely tight two years. Are we in the midst of a shift towards a buyer’s market? Not yet, but as several markets across Canada move to more balanced conditions between sales and new listings, sellers no longer hold all the power.
As a first-time homebuyer or even a seasoned homebuyer, it’s important to keep up with the shifting market trends to secure a successful transaction. Read on to learn more about the shifting real estate market and discover how to navigate these changes.
What Does the Shifting Market Look Like?
The market is still feeling the effects of the pandemic, and it will take some time to get back to normal conditions. However, we appear to be on our way there. The number of newly-listed properties was up 4.5% in May, and housing construction has accelerated across the country in the past year. Apartments make up a large portion of new housing starts, particularly in Toronto, Montreal, and Vancouver, while single-detached homes are most common in Calgary, Edmonton, and Ottawa. The type of new listings in a given area may cause some buyers to shift their preferences.
Increased inventory is one significant change. Another is home prices. During the pandemic, increased demand, low mortgage rates, and scarce supply caused prices to skyrocket. Today, mortgage rates are on the rise, and homebuyer budgets are stretched tighter than ever. In response, the national average home price is slowly inching down for the first time in years. The national average price for May 2022 was $711,000, compared to $796,000 just two months earlier.
Tips for Navigating Market Shifts as a Buyer
In addition to partnering with a local, expert real estate agent, utilizing the following tips can help first-time homebuyers better navigate continued market shifts.
Know Your Budget
With rising rates for both fixed and variable mortgages and high home prices, it’s essential to do your research and plan what you can truly afford in advance. Make careful buying decisions based on your finances, not your emotions.
Get Preapproval From a Trusted Lender
Along with having a thorough understanding of your budget before buying a home, it’s wise to obtain a preapproved mortgage up to four months before making a purchase. Preapproval guarantees your mortgage rate, a welcome advantage as rates continue to rise. Preapproval also gives you higher status as a buyer and considerably speeds up the homebuying process.
Be Flexible and Patient
Finally, remember that all first-time homebuyers have a lot to navigate. It’s essential to be patient and flexible on your home-buying journey. There will undoubtedly be ups and downs along the way, especially with today’s market. Know that buying a home is still within reach, and when in doubt, rest assured that you can always reach out to a local, expert real estate agent for help.
Tips for Navigating Market Shifts as a Seller
While the market is shifting, it's still an ideal time for sellers. The following tips will help you get the most out of your home selling experience.
Work With a Trusted Local Real Estate Agent
Whether a seller’s or buyer’s market, it’s always good to work with a local real estate agent when listing your home. Your agent will be there to give you the most up-to-date information on the market, navigate stressful contracts, and help you get the best price for your property.
Inspect Your Home Before Putting Your Home on the Market
Having a pre-listing inspection for your home can save a lot of time and headaches down the road. You’ll get a full picture of the condition of your home and any changes it may need so that you can list it in confidence.
Shifts in the market are occurring, and conditions change monthly. So, whether you’re a seller or buyer, the best way to navigate and stay on top of market shifts is to work with a local real estate agent you can trust.