Despite a hot market, if you’re not ready to sell your home, don’t!
Updated: Apr 27, 2021
As a real estate agent or realtor, if I was given the responsibility to sell your home; that means a chance to grow my business and earn income. Realtors need listings to make a living, and as much as I would love to sell your home today if right now is not the right time for you to sell, then don’t.
Getting a competitive offer for your home, maybe even higher than the list price, is something that is attracting a lot of non-sellers to explore the option of selling. However, if you are not ready to sell, then waiting to sell may make more sense for you. Two of the major drivers that I see on social feeds are the need for more listings, as well as the threat that interest rates will rise. Both are lead generation tactics that real estate agents are using to list homes. So, let’s dig deeper into both.
First, we will start will the looming threat that interest rates will rise. Interest rates will rise, eventually, but not tomorrow or the day after that. It is great news to see that the Canadian economy, as well as other economies throughout the world, are starting to enter a recovery phase after the initial chaos created by the pandemic; yet, the aftermath of the pandemic will not be solved by a sudden spike in interest rates, nor is the pandemic over. Mortgage rates experienced a slight bump over the past month in a response to an increase in government bond yields, but it was minimal and further increases are projected to be minor as well. The uncertainty that lingers regarding the pandemic, which now may become an endemic, will cause the Government and financial institutions to act cautiously.
The Government has accumulated significant debt as a result of the pandemic, that a rise in interest rates would also impact their ability to pay what they owe. So, for the foreseeable future, some economists even project as far as 2030, interest rates should remain low. During that time will interest rates increases from what they are today? Yes, they will; however, the increase is projected to be a minor bump rather than a significant spike that will completely alter your buying power.
At the start of March of 2020, there were approximately 1,140 listings on the market; at the start of March this year there were 1,099 listings on the market. That is a difference of 41 listings. However, comparing February 2020 sales to February 2021 sales show an increase of 122 transactions. Properties are selling, yet not all properties are selling. For instance, townhouses and single-family homes both experienced an uptick in sale prices, yet condos experienced a downtick in average sale prices. A competitive demand for townhouses and single-family homes is evident, as some properties have had multiple offers resulting in bidding wars that have sold properties above list price; while condo sellers have experienced average prices dip below list prices.
So what does this mean? As a seller of a townhouse and single-family home, it is likely that your home will not sit long on the market as demand currently outweighs supply. However, what does that mean as a buyer once you’ve sold your property? The next home that you are eyeing down in the market may have more than one offer on it, has your financing been approved to compete in a bidding war for a property? More importantly, can you afford the higher mortgage payment? Additional furniture and potential renovations? All these are very important financial questions that a seller of a property who is then looking to buy must be aware of.
Yes, the market is hot right now and there are plenty of buyers in the market for certain types of properties. However, as a seller don’t let the market dictate what is right for you. Make sure that you are prepared to sell, and are ready for both best-case and worst-case scenarios. Selling and buying real estate is a significant purchase in anyone’s life, that you must make the decision to sell or buy when it makes the most sense for you and your family.
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