121% Increase In Sales....Is The Market Too Hot Yet?
Snoop Dogg had it right...Drop It Like It's Hot.
What happens when the market gets too hot for consumers to take action? Most observers would look at the real estate market and think that it is prime time for sellers to sell and cash out. And in most cases, you'd be right. But what happens when the inventory levels shrink to a point that it makes a seller second guess whether to sell? Lets's dive into it and go through some of the market updates these past two weeks.
Real estate is unique from any other form of investment. If you trade in stocks, bonds, crypto, etc you know you can buy and sell at whatever the market dictates, and outside of your finances, you will not see much of an effect.
But what happens when you trade in real estate? Specifically your primary residence? Well, not only are your finances impacted, but your lifestyle, quality of life, your family are all affected in a single shot as well. The minute you decide to sell, you have to be committed in more than just one way. You also need to find another place to stay. This is the key component that differentiates real estate from other forms of investment. You don't have to buy another stock, bond, or bitcoin when you sell.
So when the market swells to the point where we have no inventory available in a segment of the market you want to be in, what do you do? Well, you don't sell. If you don't sell, you don't buy. And what happens to the market when no one is selling or buying, the market starts to suffer.
However, in Calgary and most large markets in Canada, we have other forms of housing like condominium townhomes and apartments, duplexes, etc. If there is no inventory in the single-family segment, these other forms of housing will start to see a secondary jump in sales and price. We have already seen condos in Vancouver and Toronto sell for over what the average house costs here in Calgary.
Are we at this point yet, I don't believe so. However, we do see a natural seasonal shift of lower inventory into the summer months and if you are in the market to sell, you may want to consider sooner than later to have access to homes you would want to buy after your sale. I can help you with this, feel free to email me at firstname.lastname@example.org
Now, let's look at the market.
Up to the 21st of March, we are seeing that the number of sales is outpacing March 2020 at the same time by 121%
Active listings have declined 22% while new listings have increased 62%. This may seem counterintuitive at first but it is illustrating that our growth of inventory has increased but the pool of inventory has shrunk to a point where the new listings entering the market is not enough to bring our market to a balanced state.
Median prices are up almost 12% from the same time last year and will continue to rise as we see more and more sales and lower amounts of inventory into the summer.
Expect to continue to see this trend going into the summer months. If you'd like to gain access to my VIP newsletter where we do a deep dive into the analysis of the market month over month, please feel free to send me an email at email@example.com and I can add you to the list. We also have private listings, contests, and discounted vendor offers. Contact me to check it out, you can unsubscribe at any time.
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