You are thinking of selling. You see the end in sight with the restrictions and are comfortable with having buyers through your home. You want to sell for top dollar and are ready to put your home out there and get the flood of offers in!
But have you missed the boat?
In this week's breakdown, we will look at how we are fair so far this month to last and see if there have been any slowdowns in the market. We are also going to look at the top 5 things you as a seller need to keep an eye on going into the summer months. Ready?
March was our strongest month of sales in a decade. April was consistently strong with an increase in listings and a proportional increase in sales (join my newsletter to get the monthly breakdown by clicking here) So how are we doing so far in May?
At this same time last year, we are seeing an increase in sales of 243%, new listings are up 113% and the median price of a detached home in Calgary is now $532,500, a 15% increase.
These are all recovery numbers and are to be expected, but compared to April of this year, if we forecast out the trend we are seeing in May so far, we should expect to see a slight cooling in May in the number of sales and number of new listings. This will predominately be caused by the restrictions to our province and the higher case numbers.
But does these change aid buyers or sellers in the current market? As we see both sales and active listings shift together we will continue to see the absorption rate remain high going into the summer months.
As we continue to work through May you can continue to expect a sustained amount of activity in the market. We seem to have peaked in the level of sales and new listings currently. Unless one of these drops off or picks up, we should expect the status quo in the market to the end of the month.
But what about the summer? If you are a seller in the upcoming summer market, here are some top five things you need your real estate professional to keep an eye on for you so you can adjust to the market accordingly.
The Infamous Stress Test. The test of uninsured mortgages (20% downpayment or more) will see their pre-approvals for lending be tested at a rate 50 basis points above current levels. This goes into effect on June 1.
This is important for a seller to keep an eye on because the purpose of this test is to ensure buyers will not default on their mortgage if the rates were to increase in the future.
The interest rates. The rates have fluctuated a lot in the last 4 months or so from being as low as 1.39% (five-year fixed & closed) in February to hovering around 1.90% currently. These changes have come as the Bank of Canada (BOC) has maintained its rate throughout the pandemic.
For sellers, rates affect purchasing power for buyers. The introduction of a higher stress test is the precursor to higher rates from the BOC. If the main rate increases, you can expect each of the bank lending rates to also increase.
The Pandemic. It is still very real in our country and especially in our province. Depending on the speed of vaccines and their result of lower case counts and especially hospitalizations, our economic recovery timing will be based on this.
For sellers, this will impact your timing. If we are reopening sooner than anticipated, we could come out of this little honeymoon phase of the extreme shortage of inventory as more and more sellers decide to sell while the inventory is low. Builders will have their supply chains reopen and begin to start builds sooner and faster in the summer months, also increasing competition for your sale.
Depend on how companies reopen, more and more people will be working from home post-pandemic. Our city is primed with low pricing and more value in terms of the kind of home you can buy when compared to the other large markets. This will increase foreign and inter-province buyers to be attracted to our city.
Toronto and Vancouver. Although when we are pricing homes we are hyper-local to the communities we are looking at, the government looks at our market as a part of the whole of Canada.
If pricing continues to surge in these markets, you can expect the government to try more and more different measures to keep the housing prices in our country affordable to buyers. A blanket approach is not the best approach as I'm sure you would agree, but until something changes, we have to anticipate a change.
Oil and Gas. The list wouldn't be complete without discussing the economical challenges of the O&G sector in our province and city. This has built our resilience as a province and from what we can see, we have significant job growth in sectors outside of this industry. We have new and emerging industries like Tech coming into our province and setting down roots.