There is not one real estate market in Canada, in the Province or even in your town. The news headlines might lead you to believe that everyone is in the same boat, the reality is... we're not.
“Housing Market Bounces Back”
“Majority of Aspiring Home Owners Awaiting Rate Drops”
The headlines are many, but often they are only regionally applicable.
The fact is that the government is trying to play 25 years of catch up in 7 years with a promise to build 4 million homes by 2031. To put this in perspective, that is 1528 homes per day for 7 years straight, 7 days per week. All at record high interest rates.
There is a Canada Builds initiative to help build affordable housing for the middle class on underutilised public land across the country. But not all of the country is rich with public land.
Here is the reality on Vancouver Island, particularly from Victoria to Courtenay. Many years ago a crappy deal was made with coal baron Robert Dunsmuir, trading millions of acres of land in exchange for a railway. Consequently, we don’t have the luxury of crown land to take advantage of these public land initiatives, most of the land is privately owned. We have been railroaded.
So, if you are listening to the news, or speaking with your brother in Ontario, your sister in Alberta and your Mom in Manitoba, our story and subsequently our real estate market is different. Different forces have affected it in the past and will continue to alter it into the future.
That’s the macro level reality.
Micro level on Vancouver Island, if a house is well priced and in great condition it is going to sell. However, if a house is overpriced or needs work, those houses are not selling. Why? Because at these interest rates people are stretching as much as they can just to get the house. Buyers don’t have the luxury of sinking an extra 50K into redoing floors, roofs, windows or whatever needs to be done.
The market is still very busy, with multiple offers coming in on well-priced homes. For Buyers, financing is tougher currently, with lenders being extremely diligent (aka difficult) so it is important to have a full pre-approval done by your mortgage broker prior to looking at homes. This includes down payment, income and debt verification. Any changes in your situation need to be relayed to your mortgage broker so they can update your application.
Sellers, there is still a lack of inventory, so you will get people coming through your house. If people come through, over and over, but don’t buy, it’s likely a combination of being over priced and/or work needs to be done on the home. Buyers are well researched, they know their home prices and renovation prices. Buyers are unable/unwilling to take the same risks when interest rates are at 6% versus when interest rates were at 3%. There is just not the same type of wiggle room or fallback money.
Entry-level houses are selling well. Condos and townhouses that allow pets are selling well. Beautiful high end homes are selling well. Down-sizing homes are selling well. The market is active, but it is just not one real estate market, no matter what the news may lead us to believe.