Real Estate: Home sales expected to pick up in spring
With two children under the age of six living in a two-bedroom, one-bathroom apartment, Jacquelin Forsey and her husband have long known that it was only a matter of time before their family grew up in their beloved home.
The many hours spent in the small space while Forsey was pregnant and struggling away from home during the COVID-19 pandemic, along with a visit to a neighbor who was selling their “beautiful” and “perfectly sized” place, had convince the couple to start. their new home hunt recently.
“If there was any way to make this place bigger, we would never leave,” Forsey, a PhD student, said of the home her family owns in the Leslieville area of Toronto. .
“We love it. We love the neighborhood, we love our house, but we can’t all stay in this little house forever.”
The couple have spent recent months scouring listings and putting out at least one failed bid, but Forsey foresaw that their fortunes would change this spring as economists and brokerages predict a return to Canada’s housing market.
The market has slowed since last year, when potential buyers began delaying home purchases as the Bank of Canada sharply raised interest rates eight times in a row.
The rapid succession of increases erodes purchasing power as borrowing costs rise and causes prices to fall, discouraging sellers from listing their homes.
With Real Estate Association of Canada data showing the average price has dropped 19% from a February 2022 peak of $816,578 to $662,437 last month, and BMO Capital Markets chief economist forecasts Anticipating a bottom after a 20 to 25% drop, brokers found many people were looking to buy again.
Michelle Gilbert, a Toronto-based broker with Sage Real Estate Ltd, said: “We had a huge influx of buyers in January, in February and we’re still getting more and more and we’re starting to see a lot of profit. offers to come back and offers to bully to come back.
“We’ve started getting calls where buyers are just saying, ‘I think I’ll just tweak what I want, but I don’t want to miss my chance.”
These customers are a mix of people who have to move because they are relocating for work or growing a family, and also first-time homebuyers who want not to let lower prices overtake them.
Gilbert said many first-time buyers find it harder to qualify for a mortgage, but still want to make a purchase, so they compensate by adjusting their expectations.
“Maybe they can’t get the space they think they can because they can’t afford to get that much but they still really want to get a good deal,” she said.
In Vancouver, Coldwell Banker Prestige Realty dealer Tirajeh Mazaheri has also seen a buyer resurgence.
Weeks after the Bank of Canada signaled that further rate hikes were unlikely, she said properties were starting to sell quickly with many offers.
She discovered an apartment listed for $699,000 received 11 offers and a home listed for $2.8 million after five bids last month.
Others have not yet entered the market but are preparing to do so soon.
“All the people that didn’t get pre-approved are getting pre-approval because people want to buy something because they’re worried that prices will start to get too high again,” Mazaheri said.
Despite such sentiment, she does not see the market returning to the frenetic pace of 2021, largely due to a lack of available assets.
The Canadian Real Estate Association recently revealed February’s total of new listings was 51,366, down 26% from a year ago. On a seasonally adjusted basis, they came in at 57,535, down nearly 8% from January.
RBC Economics assistant chief economist Robert Hogue said in a recent report that if the number of new listings continues to plummet along with tight supply and demand conditions, a price adjustment will occur in coming months.
If those conditions hold, he predicts prices will bottom out in the summer or shortly after.
Sellers will closely monitor the direction of price movement.
“A lot of sellers are starting to want to list, but I find that most of them are a bit cautious,” says Mazaheri.
“They are also seeing a change in the market and they want to get the highest dollar for their assets, so they are thinking maybe wait until spring or summer.”
For Forsey, there’s no rush to buy a home, but she admits the interest rate pause is giving her family more confidence in their decision to look for a new place to live.
While her engineer husband was working on spreadsheets of what they could afford, depreciation, and the impact of potential interest, she said they had accepted “that we couldn’t time it.” market point and we just have to do the best we can and what we’re comfortable with and then hope it works out.”
“We can stay here until the right opportunity comes and we don’t have to rush out and we don’t have to make hasty decisions,” she said.
“And if it doesn’t work for a long time for us, that’s okay because what we have is pretty amazing.”
This report by The Canadian Press was first published on March 22, 2023.