Spring Market is just around the corner. Historically the busiest time in Real Estate starts in April and goes on until about August. Usually the busiest months are April, May and June but last couple years March was also very busy.
As usual a lot of people considering a move and thinking about selling are calling their realtors with questions. I would like to address some of the concerns here.
2022 has just started and so far, has been very turbulent already. Rising inflation, potential of rising interest rates, illegal government overreach, covid mandates, high immigration targets and now conflict in Ukraine, to name a few.
Making rational decisions based on facts can get hard because it seems there are many variables that can change weekly.
Why is spring market good for buyers and sellers?
Simply put, curb appeal! Hopefully when spring hits, all snow is melted and spring flowers make your yards look beautiful. The trees are waking up with color and people feel more energized and wanting to move.
Since the pandemic has started more home buyers decided to reconfigure their lives, priorities changed and also the demand for larger homes with multi purpose rooms have increased. A lot of buyers have moved out of the highly densely populated cities into the suburbs or in many cases even changed the provinces in search for more affordable prices. We are still not clear if the exodus from big cities will continue or once offices open up, people will head back to cities, or if they will continue to work remotely.
Rising inflation will be higher than we have seen in many years. In order for the central banks to combat the rising inflation they need to raise the interest rates.
Banks saw this trend coming, that’s why they introduced the “mortgage stress test”. The extra 2% buffer needed to qualify for a mortgage gives the bank confidence that borrowers will be able to make payments once the mortgage rates go up.
How does that translate in real life?
Based on a quick Google search, the average Canadian has a $372,000 mortgage. A 5 year closed mortgage of 4.79% will cost roughly $2120/ monthly.
If the mortgage rate goes up by 2% the monthly payments will be $2,560/ monthly
$440 increase in monthly payments.
Today we are facing record low inventory but the demand is still very high.
So, is now a good time to sell?
Every person is in a different place in their lives. Don’t base your decision on fear.
Generally, best time to sell is during a seller’s market. We are in the strongest seller’s market in a long time. This is by far the best time to sell, based on historical data.
If you are thinking of buying it’s probably not the optimal time but it depends on your circumstance. If you can afford to wait until the market changes to a buyer’s market, then wait. If you must buy now, don’t expect to find any “deals”.
It is important to listen to a few opinions, ideas before making up our minds. The most important aspect is to listen to ourselves, to the feeling we have. Sometimes it’s not all about the money or timing.
My personal litmus test when making big decisions is to ask myself: is it going to hurt someone, does it come from respect, kindness and compassion? Whatever decision I make is a decision I’m willing to live with.
Over the last couple of years, we have followed so called “leaders” telling us how we should live but I really hope we have reached the end of this. It’s time to take charge of our lives and finally return back to kindness and community.
Are you thinking of selling your home? Call me for a free home evaluation.
Roman Krzaczek REALTOR ®
Home number: 250-285-2141