by Jen Scholte
on Friday, April 13th, 2018 at 12:39pm.
It’s now spring, the water is warming up (so we hope!) and the Real Estate Market is waking up from it’s winter slumber! What are the trends and the expectations we are seeing for this Spring Market?
What We’re Expecting:
We expect real estate in our area, Wasaga Beach, Collingwood, Blue Mountain, Meaford and Clearview to remain strong in 2018 despite the cooling of sales and home prices. The past couple years have been rigours and challenging to navigate for both buyers and sellers.
In 2018 we are looking forward to working together from the perspective of ‘right sizing’, ‘investing’ and ‘building our communities’. We are expected to see balance in our marketplace.
According to CMHA the market may cool in certain price points or demographic regions by 8% however the predicted average home price is expected to increase by 1.2%. This in turn leads to the impact home pricing will have on the overall market.
Although sales activity has fallen 12.65% in the first quarter of 2018, compared to the last quarter of 2017, housing starts for each municipality will continue to grow offering the market some much needed inventory. We saw an influx of sales at the end of 2017 as buyers decided to make moves early to avoid the new mortgage qualification regulations which took effect January 1, 2018.
Why is our Market Cooling, and What Does that Really Mean?
With the rise of home prices, affordability is decreased – especially for first time home buyers. New regulations such as taxes placed on foreign home buyers have been put in place to temper hot markets. This has impacted Simcoe County, particularly the Barrie area but has provided an opportunity for Grey County.
Also, new mortgage qualifications requiring all buyers to pass a stress test that will now ensure their homeownership costs don’t exceed 39% of the borrower’s household income. This means that first time buyers and current homeowners looking to upgrade are going to have to adjust their expectations. Their new maximum approval amount could now be anywhere from 5% to 20% less than it would have been in 2017.
This could mean a cooling for specific price points, however more affordable options such as condos and townhouses may become in higher demand. But what sellers can expect is less bidding wars, and less competition on pricing between their neighbours. The affordability for buyers just isn’t the same as it was in years prior.
We can expect the market to be balanced in 2018 meaning it’s neither a seller’s market nor a buyer’s market. Fair and accurate pricing as well as an effective and informed buying plan will make for success for both buyers and sellers.