Weekly Wrap Up...Is the winter dip the start of a market cool down or will prices continue to go up?
David Kurt
What made you decide to get into real estate? I was one year into working a “real job”; the type you study hard and go to University for when I re...
What made you decide to get into real estate? I was one year into working a “real job”; the type you study hard and go to University for when I re...
Ho, ho, ho… we are 2 weeks away from Christmas and despite the lack of snow (not necessarily a bad thing) things are feeling festive in Sudbury. We got news that one of my families favourite traditions, the Living Nativity will be back this year, with a drive-in-twist and a new venue. Public swimming and skating came back this week in Sudbury too, with the need to register in advance but another outlet to for the cooped up parents and tots. And with shopping days ticking away until Christmas I’m sure the police will be directing traffic at Costco and the New Sudbury Mall as we buzz excitedly from store to store trying to social distance while geared up in our masks and hand sanitizer.
From a real estate perspective listings stayed pretty consistent week over week with last week, as we discussed finding ourselves in this pre-christmas lul; and sales actually stayed pretty strong outpacing new listings again this week by close to a third.
Number of Sales
35
Dec. 5th - Dec. 11th
47
Avg. Post-COVID
Conditional/ Pending Deals
20
Dec. 5th - Dec. 11th
22
Avg. Post-COVID
Multiple Offers
15
Dec. 5th - Dec. 11th
27
Avg. Post-COVID
New Listings
26
Dec. 5th - Dec. 11th
55
Avg. Post-COVID
My 5 takeaways this week are:
- The listings and sales were about consistent with last week. We had chatted with getting to a point where we would hit the lul as we head into the Holidays and it appears this could be the numbers we are seeing hold as the slow market. If this does hold true, it could be a pretty strong holiday season. I did a check with the activity last year at this time and we actually saw 28 sales during this same week 2019; which means we are busier than last years market as well.
- The most surpising number this week is the number of active/pending sales. We saw a huge drop last week when we hit just 6 total deals that were pending and this week we launch that number back up to 20. This is a good sign for # of sales as we head into next week. One of the reasons we’ve pointed to the market continuing to be strong is the nicer weather, and despite headed to a snow storm apparently for Saturday; buyers are still seeming to be pounding the pavement looking for that perfect place before Christmas!
- The number of multiple offers stayed really consistent this week again with closer to 50% of the sales being close to asking or above asking price. This has continued for the last few weeks, and it is interesting to think that even with the winter market upon us that their are homes that buyers are willing to get into a bidding frenzy over. The other interesting part of this is the value the sellers are putting on ‘cash’ offers. A cash offer is an unconditional offer (no financing condition, no home inspection, etc…); I was involved in one last week where we were a good amount over the offer the sellers choose to accept but we had basic conditions and the one they selected had none. It is a tough situation to be in but typically there is a $ value that the sellers are willing to accept the higher offer and take the small risk that everything goes well with the conditions.
- I was on a zoom meeting with some Realtors® this week and we were discussing the entry level market in Sudbury and the comment was made that soon enough there will be no listings under 300k; especially within the city. So as I prepare to show a buyer this weekend I see this exact scenario playing out. Typically the discussion goes like this, “we want a house that doesn’t need too much work, we are ok doing cosmetics and we’d prefer to be in town, and no we won’t do a semi-detached”. There are a few listings that are priced just under the 300k but these prices are artificial with the likelihood that they will sell for a good chunk over the 300k price point.
- I’m having the conversations with people multiple times a day it appears; quesitoning that will this winter dip, be the start of a market cool down in general or will prices continue to go up. Let me preface this as I don’t have the crystal ball and I can’t predict the future. The biggest reasons for prices to continue to be stronger and quite a bit stronger next year are; it doesn’t appear that the supply will massively increase any time soon, rates will be remaining low for the foreseeable future which makes lending cheap, our properties may seem expensive to those who bought 5 or 10 years ago but to those people in Southern Ontario who are looking at coming north to enjoy this work-from-home shift we’ve become accustomed to it looks like our homes are on sale. The reasons that the market may have peaked include; the fact the govenerment has artificially put rates as low as they can get them, they can’t go lower (house prices are typically inversely tied to lending rates), sure there are some buyers coming up from down south, but most of the buyers who wanted to escape their COVID-condos did so at the start of the pandemic, and people who have been financially hurt by COVID have been able to coast with CERB and deferring mortgages, 2021 will be the first time the government may not be there to stop the bleed.
I think we are positioned well in Sudbury. Our house prices haven’t skyrocketed to the same value they have all over the Golden Horseshoe and in comparison we may actually be under priced. Rates will stay low for the near future, I do think they will be going up (slightly) but still money is going to be cheap relative to what our parents paid for the next 20+ years. And as much as people will start going back to work in 2021 in a post-vaccine world; we as millenials have been putting more of a focus on work-life balance for a while now, and I think that everything we have gone thru in the last 10 moths will make that more apparent that we care about where we live and the quality of life we have around us. Its not so bad to be surrounded by lakes and nature and still have a big-city feel!
Until next week, hope you are staying safe and we’ll chat next Friday