Weekly Wrap Up...Bidding Wars, Interest Rates and Bully Offers🏡
It is getting COLD outside! 🥶I was driving home from a date night with my wife last night and we had snow pelting the car as we were headed down the highway. With halloween just over a week away, I hope all your little trick-or-treeters are excited and getting their costumes in order. I know I am looking forward to our Halloween fun day with Kivi park happening tomorrow from 11am - 3pm! Again this year we donated 500 pumpkins that will be hid all over the park for families to hunt down and bring home. In addition to that there will be the spooky walk, s’mores station, family photos and so many more activities going on... and if you pop by our tent we’ll have a live carving demonstration, some fun halloween games for the kids and free treats and cotton candy. Its' a great local event to get the kids in the halloween mood! If you do make it out I hope you pop by our tent and say hello! 🎃
On the real estate front we saw sales stay flat with a small drop in the listings! 🏡
Number of Sales
Conditional/ Pending Deals
My 5 takeaways this week are:
💰This week's sales was pretty consistent week over week, and new listings dropped slightly over last week's jump. When i compare the numbers, year over year, we actually have slightly more listings and sales in this same week than last year this time. I will do a full breakdown next week when we have all the numbers for October to review and we can get a better picture of how we are progressing in this fall market versus other years.
🍂The biggest number that surprised me this week was the % of multiple offers. It was almost 9/10 sales this week that got swept up in bidding wars which is quite significant. This is the highest % we have seen anytime in the last year+. This shows the motivation of the buyers who are trying to get into places before the snow starts coming (I’m saying this as I’m wearing my Canada Goose parka waiting for my office to heat up). The market feels a little more intense than it did even 6 weeks ago, I want to point to the seasonality that we expect at this time of the year but something feels different.
🤯One of my biggest take aways that the numbers aren’t showing is the fact that all signs are pointing to the idea that we’ve seen interest rates hit the lowest they will hit, and we are only headed up from here. One of my favourite blogs is “Garth Turners the Greatest Fool”. He’s the anti-real estate, contrarian to a lot of my opinions, but extremely knowledgeable and one of the wittiest writers in Canada, especially in the dry world of finance. He outlined that with job numbers fully back from pre-covid numbers, the government has hit the point where they are easing up on the suppressing of the interest rates that they have done for the last long while and bystreet is forecasting 4 increases in the Bank of Canada lending rate in 2022. His projection is that in the next 24 months we could see a 4% which would make a lot of buyers payments considerably higher than the sub 2% mortgages they are paying now. This playing out would be the strongest reason against the real estate market continuing its crazy run.
💵I talked about bully offers a few weeks ago, and it seemed like when we, as an office were encouraging them and using them we were getting a ton of flack and frustrated buyer agents with us. Looking at the trend it seems that more and more listings are open to bully offers, and often find scenarios where they are reviewing offers in advance of their future offer date. I think that this is a good strategy, we saw it play out a few times on our teams listings this week; and worked out exceptionally well. I think part of the reason listing agents don’t want to deal with them is it makes their job more difficult. It's easy to set out your schedule and hope everything fits well within your ideal timeline, when early competition comes in it can disrupt the agents and our client's schedule, which can be frustrating, but ultimately if the offer is that good maybe its worth dealing with it!
🤔Where does the market go from here? My optimism on where the market in Sudbury is headed in the short term continues to be extremely bullish. Expect seasonality to kick in and see a slowdown in activity (last December sales were in the low 30’s and January dipped into the low-teens). Beyond that though, as I reflect on Garth Turners discretion with rates rising, I can see a world where real estate markets across the country slow down as rates climb. That healthy dose of scepticism makes me see a scenario where our growth slows down as the housing market across the country cools and we see a slowdown in activity. I do think even with the potential for that to happen, we will still see strong activity in Sudbury. The extreme affordability when we compare Sudbury to the rest of the province, continues to have me optimistic about the Sudbury real estate market. Believe it or not the average price of a home in Ontario for Sept 2021 is 887k, in Sudbury you can buy 3 for that price! We have so much potential to increase to get us close to par with the rest of the province. Clearly, we don’t have a crystal ball but even with rates set to climb I would have strong predictions for houses to continue to rise in Sudbury.
Thanks for tuning in Sudbury, let's chat next week!