The pandemic era housing market has continued to climb to an all-time high over the past two years with the average selling price of $688,208 recorded this May, according to WOWA. The intense demand of homes during the pandemic has made prices skyrocket, creating a seller’s market. While the market activity was up 103.6% year-over-year, The Canadian Real Estate Association has noted a decline in national home sales by 7.4% on a month-over-month basis in May.
With the high demand of homes and a shortage of properties, frantic bidding wars on low valued homes have become out of control. In March 2021, the peak of the pandemic market, out of 1304 homes sold 1116 sold at asking price or higher and in April 2021 sales were up 245% since April 2020. However, sale prices were down 11% in June with the inventory available at the end of the month dropping to 0.8% which was lower than May. I have noticed that seller expectations are being impacted from how things were in previous months” resulting in pandemic tunnel vision which is preventing people from being able to sell their homes.
Unfortunately, sellers are getting caught up in the previous numbers of the market or hear about a neighbour who sold their house for X amount of money a few months ago, and believe their house is worth the same or more. Many agents in the area are having trouble coaching and supporting both buyers and sellers. Although the market isn’t retreating to a stable level, it isn’t continuing to rise to the previous caliber of March and April. As a result many are realizing weeks later that they botched a great offer and regret becoming overly confident and unsatisfied with the offers they declined. It is difficult for sellers to understand that we are now in an adjustment phase of the market”. Ultimately, sellers need to disregard previous numbers from the peak of the market and realize that it is beginning to settle down.
All things considered, the market earlier this year is a great memory for those who sold, and for buyers it will catch up in 12 months and you will see your equity begin to flourish. However, in this moment it is crucial for sellers to comprehend the shift the market is taking to successfully sell their home, and refrain from being fixated on numbers that are no longer applicable.