Real estate experts warn against selling homes before prices crash
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You can see other videos from our team here. If you refresh your browser, or should you sell your house before prices crash, or wait for the next real estate boom? While sellers can still take advantage of low inventory, they should also know that inflation, rising interest rates and perceptions about overvalued homes may be taking some air out of the sellers market. There are signs that homes are slowly but steadily staying on the market longer, creating a hard choice for would-be sellers: do you bet that your local market remains enough in demand and lures over-asking price offers, or do you hold tight and wait for the next big wave up? Political leaders are often quiping that all politics is local. That's true for real estate as well. In-demand cities and neighbourhoods will always defy broad national trends. Things like quality schools, livability and access to cultural amenities will help home sellers get top dollar.
Recent numbers are hard to ignore. The Canadian Real Estate Association said national home prices fell by 5.3 per cent on a month-by-month basis in July, and the national average home price was $629,971 down 5 per cent from the previous year. Both buyers and sellers are waiting to see when and if the market settles before making any moves. There was a drop in the number of listed homes by 5.3 per cent, suggesting that homeowners aren't quite as quick to put their homes up for sale. Although many leading indicators may suggest that we have entered a cool-off, a handful of critical factors make now a good time to sell — assuming you are ready to list: Demand: Homes may be on the market for longer, but demand remains high, and housing inventory remains low compared to previous years. The East Coast of Canada continues to see home prices increase, and across the Prairies remain the same.
The seller can expect to cash in if you live in a low-inventory market, and buyers outnumber properties. Cash offers can speed up the path to closing because the all-cash offer market is hot right now, which is great news for sellers. You could get offers that aren't dependent on inspections, guaranteeing you receive the offer price. Rising interest rates can work against sellers - higher rates mean bigger monthly mortgages - looming hikes will likely prompt some buyers to lock in rates. The average mortgage rate for the five-year period is now around 4.85 per cent, which is much higher than a year ago when rates were just above 2 per cent.
There are just as many to hold tight. If you're selling because you need a bigger home, that leap up may be unworkable, especially if you're looking in a popular neighbourhood or city. A bigger property can still carry a bigger monthly mortgage payment, as it can swallow the profit on the just-sold property. The rising rates of the Bank of Canada can work against you as a seller. It's going to make it harder for conventional-mortgage buyers to afford their property, as a result of it's ability to reduce the pool of would-be buyers. The buyer or seller of a large real estate transaction starts with a thorough self-audit. It's best to get answers from an experienced agent who knows your area. An agent is your best compass for what your city or neighbourhood will demand or cost. This article is not intended to be construed as advice. It is provided without any warranty of any kind.