Keeping up with the real-estate market these days, especially if you are actively trying to buy or sell, can be stressful. Most can attest to witnessing the phenomenon, coming out of the pandemic, and seeing a for sale sign go up and the next day the property would be sold.
According to Nicole Henson of CIR Realty, the market is still very much a seller’s market, but it is not as frenzied as in March and April. She says less frenzied is good, “Balanced market conditions are really better for everyone, especially for buyers. It's hard when you know you're 1 of 10 people putting in an offer. Nine of them don't get the house, and they're back out there spinning their wheels trying to find something and it can get discouraging pretty quickly so. You know, I would really like to see us return to more balanced market conditions. That appears to be the trend in June of 2022 and while the housing market, according to experts, maybe cooling, it is not necessarily a bad thing."
However, it is still a seller’s market when it comes to demand driving the prices.
Henson says, “So interestingly, in January in Cochrane, we started with an average sales price of $464,500, skip to May, and we had an average sales price of $521,000. So, there's been a big increase as the months have gone by here, but the peak really was in March of 2022. When we saw an average sales price of $520,000, but where we really hit the high in March was the detached average sales price was $654,000 and then in May of this year, we were down to $612,600. But, despite the fact that the prices are slightly down on the detached average, the average overall is, you know, $1000 higher in May of 2022 as opposed to March when we had the most activity."
There are a couple of driving factors keeping the housing market hot for sellers in Cochrane, the first being a shortage of inventory. Henson says, “So far, we've had less than one month of supply in Cochrane, so the demand is really strong and there just aren't enough new homes coming on the market or enough new homes being built to satisfy that demand. The second factor is an influx of out-of-province buyers, “We're seeing a lot of movement of people moving within town, […] it's the people coming to Cochrane from outside of the province that I'm personally really seeing pushing prices who are making extremely strong offers.” So, what is Hansen expecting through the summer and into the fall? She is looking forward to a more balanced market. There was a bit of a rush in May and June and then typically there is a slowdown in July with it picking up again in late August and September, before the start of school. Again, the challenge for realtors in town will be finding inventory. Plus, Henson says that interest rates are going to be a mitigating factor.
Mortgage broker Greg Foss with Mortgage Connection says there are a few factors coming down the pipe that may affect the housing market. He says, “The Bank of Canada is expected to raise interest rates at least 1% by the end of this year, and so within the short term their next meeting date is coming up into July and the Federal Reserve and the US, just raised interest rates by about .75 per cent and the expectation is for the Bank of Canada to follow that as well, and so the minimum that they'll raise rates will most likely be by half a percent in July and then they could go up as high as .75 per cent in July, and then they expect to watch what's happening in the market. See what the impact is of that choice at that decision and then see how much higher they're going to raise it by the end of the year.”
Foss’ advice, “Don't panic, that's number one. That's where a lot of people will think that this interest increase is significant, and it is. Money is money, but when we look at the black and white numbers of how that affects your mortgage payment, it's not worth panicking about. That's step number one and then number two is, if you are susceptible to price increases, it may be time to look at maybe taking a variable rate mortgage and locking it into a fixed and seeing if that's a good option for you.”