As anticipated, July 1st has come and gone leaving a cooling of the real estate market in its wake. With many buyers and sellers trying to complete transactions before July 1st due to the HST introduction, raising interest rates and new government regulations on real estate purchasing, we are now witnessing a collective SIGH in the market......the calm after the storm, if you will.
Experts predicted this would happen, and they are proving to be correct. Many people who were planning a real estate transaction between Jan 1, 2010 and the middle of 2011, have tried to push it into the first 6 months of this year. This has created a market that has, what Adrienne Warren of Scotiabank is calling, ‘lost momentum’.
What is important to note is the use of the word ‘momentum’. You will not hear of any of the experts talk of a U.S. like crash. We are simply moving into a period that is more balanced and healthy. What we have experienced in the last 6 months was not sustainable and not good for the real estate market. Long gone are the days when you hear about offers being held back in attempts to drum up multiple offers and sale prices tens of thousands over the asking price. Buyers will no longer have to buy under duress while over paying for properties and sellers will get fair market value for their homes.
As a first time home buyer or someone new to real estate, this situation should be music to your ears. This demographic will have more time to think about their purchase, work out their finances and find a home that meets their needs without having to over pay. Many first time home buyers have recently been caught up in the ‘feeding frenzy’ of real estate purchasing and have, as a result, saddled themselves with a huge personal debt load. Home ownership will now become affordable again for many young Canadians. Those that have been priced out of the market and are currently renting due to the over inflated prices will now be able to experience the pride of home ownership.
We can be thankful that our banking system, government and CMHC have worked to keep our strong housing market from falling into the perils our friends to the south are experiencing. Many Americans are living in homes that are currently valued well below the amount they owe on their mortgage. This is not happening here in Canada.
With unemployment rates dropping for the first time in more than a year and an incredible 93,200 additional jobs being created in the month of June. The gains mean that in less than a year, Canada has almost made up all the jobs lost during the recession that began in the last quarter of 2008.
So, we are experiencing a loss of momentum in the real estate market, but this should be looked at in a positive light. A balanced market is better for consumers and it is better for the economy. What we are experiencing now is simply a return to balance.
If you have any questions about the current real estate situation or would like to know what homes are selling for in your area, please feel free to give me a call at 905-220-9198 or send an email to firstname.lastname@example.org