Ask an agent who is full-time involved in the market, on the buy and on the sell side, and you will probably hear thatit looks that way.
About a year and a half ago, in the middle of January 2012, suddenly in just a matter of a week or two you could tell if you were actively involved in sales that something was changing: properties were not available any longer to place an offer on, or offers were just going to be heard that evening with 2 or 3 offers expected, or it was too late by a day etc... So we would go to the next best one, and it was gone too, with multiple offers.
In a similar way today little signs appear here and there: a property comes back on the market a few days after being in contract, or we see "offer dates" pass with no offers brought in. Also the inventory (finally!) increases a bit so that there is actually some choice for potential buyers. I also hear sometimes that after a few days on the market very few people have actually looked at the disclosures online. A month ago you would already have had by the start of the week-end most interested buyers checking out the disclosures.
So yes, it seems to me that the market is slowing down. Sales figures in a month or two will tell us if this is correct. I would attribute this slight slow-down to factors like:
- Buyers are jaded by so many unsuccessful bids they may have placed,
- Prices have gone up significantly for the same type of house, certainly so in the eyes of buyers, and if the asking price is too close to the last comparable sale, another 10 or 15% jump from that high becomes too intimidating,
- With higher values have also come on the market properties which may not be the same high quality as those who just commended such high prices,
- A sense, at least for some would-be buyers, that they just do not know where prices should be any longer, after the many extreme bids that all can see in the MLS (hence the need for a good Realtor...),
- .. And last but not least, the rise in mortgage interest rates that have shot up in the past 2 weeks, effectively pricing out those buyers who were at the top of their borrowing power.
Let’s qualify those remarks though: in the areas with good schools, for properties priced lower than the last sales, there are still multiple offers, no doubt. For areas with very little inventory, the demand which has gone unsatisfied for so long is still there, and even only one offer will often bring a much higher price than the asking price. The market is still very much a sellers’ market. But in areas where inventory is larger, the new prices coupled with more choices will give a break to buyers who can still qualify.
The future will depend a lot on:
- The inventory (going up, going down again??)
- The interest rates
- Seasonality to a certain degree. There are fewer people around during summer.
If I had a guess I would say that in general, going forward, we should expect prices to reach somewhat of a plateau, a market of muted price increase. .. well, so there is my crystal ball. Do you want to try yours out in a comment?
Thank you for reading,
Local real estate
updated loan rates Rates are up mostly, except for the 1-yr adjustable