Did Government get too involved in 2016?

2016 was a dramatic year for real estate. The rules of engagement changed. Buyer behaviour changed aggressively. The government changed the actual rules of the game.

The first half of 2016 was out of control. If a house in New West had a roof and a front door, you were almost assured a million dollars. It only took until June for the consumers to reign themselves in. The market peaked and showed all the signs of cooling.

In July, the Provincial government announced the Foreign Buyer Tax. It was an aggressive move that created fear in an already cooling market. The result, almost no sales in August, and a feeling-out period through Autumn (we don’t say Fall, it’s bad for business). The Federal Government threw their own wrench and tightened lending rules. The impact on borrowers is limited to a small group, but it certainly created fear that it would bring down prices. A double whammy and a recipe for a significant drop in prices.

Continue reading

Buyers narrow their focus, slow the pace of the market

The market makes drastic changes in terms of how quickly buyers respond to new listings and how quickly they can close a deal once they choose a property. For the past 12 months decisions to make an offer were made in hours. Decisions on conditions like inspection and financing were omitted in order to be the best offer. Virtually every property sold in the first week. The moment the pressure from their peers dissipated the Buyers’ pace slowed from hours and days to days and weeks.

Today’s buyer will take their time to view the property and think very carefully if it is the right long term decision. (It’s usually a long term decision because the cost of the property doesn’t give the buyer hope that they will be upgrading in the near future). The extra deliberation from the Buyer uncovers more compromises and leads to less interest in the property. Less interest leads the buying community to believe the market is falling dramatically. They all hesitate. Everything slows to ensure proper due diligence.

Properties are still selling. Buyers want to buy. Let’s face it, most of us who don’t own a house want one. Today’s Buyer has been given time to reflect. It’s enough time for them to realize that they should be focussing on the property that is absolutely their right fit.

The speed of the transaction has slowed, but the activity in the trenches demonstrates a willingness to purchase. The number of feet on the street suggests good sales volume to close out 2016, be it at a discounted price from the highs set at the end of the Spring.

Continue reading