A lot of people are wondering why the real estate market is so active right now. I have a few of my own ideas about why that might be happening.
- The biggest reason is the pent up demand that was created by the difficulties in the financial sector from late 2008 to early 2009. A lot of people put their plans on hold and now that things are looking better, they have come back looking to buy and sell their homes.
- The second reason is that financing has never been this affordable with interest rates at historic lows. Anyone who is thinking of buying a home sees that there is no better time to borrow money to buy a home.
- The recent slowdown (caused by the credit sector) means there are more homes on the market. More inventory generally means softer prices - as buyers have more choices and can negotiate the price. Still, in any market, a well priced home sells quickly and for close to the asking price.
- The upcoming Harmonized Sales Tax (HST) is affecting the BC and Ontario markets by prompting people who are considering the purchase of a new home to do so before July when they will have to pay the 12% HST instead of just the 5% GST for homes priced over $525,000. This is causing even more activity in the marketplace as these purchases create a ripple effect through the market.
- The unusually warm winter seems to have people thinking Spring much earlier than other years. The “For Sale” signs are springing up everywhere and buyers are out looking to buy.
All of this leads to the fact that our real estate market continues to improve sector by sector.
In March of 2009, average prices bottomed out and have started to rise slightly since then.
Starting in May of 2009, monthly unit sales increased over the previous year and have continued to do that every month since then.
In November of 2009, average monthly prices started to climb above the previous year prices.
So as you can see, a lot of indicators are steadily showing encouraging signs of recovery.
Charlie Veaudry is a sales representative with Century 21 Executives Realty Ltd. in Vernon, BC.