On October 17 2017 the announcement was made that as of January 1st 2018 buyers will qualify for a smaller mortgage than they do today (read this from the Financial Post for more details on the upcoming changes http://business.financialpost.com/real-estate/mortgages/canadas-banking-watchdog-sets-new-rules-for-mortgage-lending). The immediate impact has been noticeable. This is a short term analysis that, despite its small sample size, can’t be ignored.
As of today we are about 10 days into a wave of aggressive and urgent behaviour across all price bands. We know it’s a result of the announcement because we saw properties (average condos and houses for the area) that had sat on the market for 3+ weeks get a surge of interest. The announcement was made and the next week these properties were selling with multiple offers over their asking price. It is highly unusual for a listing more than two weeks old to sell over the asking price and we are seeing it again and again.
What does this mean for the rest of 2017? I suspect this trend to continue. Those who didn’t pounce in the past two weeks fear losing their buying power and could keep this wave moving to the end of the year.
The big mystery is the start of 2018. Will fear be the predominant emotion? If so, expect a slow, cautious start. Never underestimate the demand for housing in our region. Too many people feel pushed out. Prices could drop just slightly. They reach a point of acceptable affordability for just a small segment and buyers are jumping on it. Demand is too high to have the patience to wait out sellers and drive down their prices.
Condos are STRONG! Why? Because people can afford them! Competition happens where there is the most interest. Don’t get me wrong, people are interested in houses, but a lot fewer people can afford a house, so there is more activity in the condo segment.
Buyers are watching condo prices continuing to rise. Young people want their first home, small families want a bigger condo and investors want in on the action too. The hottest segment is the low end of the condo market. It’s the most affordable, so there’s a group of buyers fighting to get into this neighbourhood while it’s still within their budget.
We are reaching the peak. We can already see prices settling in at the top end of the condo market. That will trickle down the price bands as the year comes to an end and we should see stabilizing prices.
New Westminster Houses – 2017 Fall Market Update & Predictions
House sales volume and prices have both taken a hit. Buyers are out there. They can feel that the pressure is off and they have time to make a decision, so they’re taking their time and picking just the right home, for the right price. New West buyers are not getting fooled or pressured into over-paying before someone else does. The houses that have too many compromises are getting over-looked and sitting on the market. Buyers are getting picky, because they can.
Expect further softening of the detached market while buyers bask in the luxury of time to reflect on their million, or multi-million dollar purchase.
Where is the market headed to close out 2017?
The big if, maybe, or what the ….? What impact will the lending rules have? They take affect Jan 1 2018. It is expected that they could drive up prices to close out 2017 as buyers rush to get in before the rules reduce their buying power. Then the limiting buying power could push prices down for the first quarter of 2018. As is almost always the trend, the Spring will bring more activity, competition and possibly drive prices up.
I suspect that if prices start to rise they will settle right back around whatever peak they dropped from in the first place. Market factors in and around New West seem to change monthly. I’ll have a new prediction by the end of November.
Simply considering what’s happening at this moment, the trend is toward stable prices, after some feeling out of the new lending rules.
THIS MONTH’s VIDEO: Market Update & Shop Local Campaign & Client Appreciation Event Announcement
PLEASE watch this month’s video. I have a campaign coming up that will end by putting $500 into the winner’s hands. Skip ahead to 5:15 if you want to jump to information on upcoming client appreciation events.
I read real estate articles so I know when, how and why the consumer starts to believe the market is about to make a dramatic shift. Don’t take the bait. Rarely is the news as grim as the headline suggests.
The most interesting talking point this year continues to be condos. They’re still on the rise. I feel like they are following the same trajectory as detached houses last year. They should plateau in May, stabilize through the summer and pick up again in the fall.
Detached houses have picked up again with some selling well over asking price again. There is a bit of a resurgence that may maintain momentum through to July. It’s a small sample size so it’s hard to predict. What I can say with certainty is that houses aren’t going down in price.
If you know a friend trying to plan a move, please get us connected. Strategic planning early on can really help their focus and make their goals a reality and want to help make that happen.