I think that it’s time we address the elephant in the room: what is going on with the current market?
Is it a seller’s market? Is it a buyer’s market? Are we in the midst of a monumental market correction? These are all questions that you may currently be asking yourself.
If you keep up to date with the news, it is evident that we are witnessing a shift taking place in the current market and that they want you to be worried about it.
I don’t believe that there is any reason to panic. What we are seeing presently, is a market that has conditions that everyone can thrive in and I think it is important that we talk about that.
So let’s talk about a balanced market.
What is a Balanced Market?
If you are unfamiliar with a balanced market, here are some positive aspects:
- The market levels off and prices become more stable.
- There is no need to rush when making a major decision and purchase.
- The supply matches the demand.
- If you sell high, you buy high. If you sell low, you are buying low.
This is truly a much more comfortable market to be in for both buyers and sellers.Previously when seller’s were selling high, there was no place for them to go due to high pricing and low inventory. This will no longer be the case. For buyers, they are no longer worried about having to omit conditions. Also, both buyers and sellers aren’t rushing to purchase and are actually given the opportunity to buy what they WANT, not what they feel they have to settle for and lastly, there is much more inventory to choose from.
How Did We Get Here?
It appears that just overnight, the market shifted but how did we get here? I would say that it is definitely a combination of many factors that have come into play. First, we are seeing an increase in interest rates (however, if you look at the last 5-10 years, we are still in a fairly good position.) Secondly, we are seeing an influx of inventory suddenly hitting the market which is creating a shift in the supply and demand paradigm. I would say that there is much more inventory available today than there was even just two months ago. We are seeing a correction in the stock market which may be causing investors to hold off for the time being.
While all of this is taking place, we are still seeing a huge influx in demand for housing. In this year alone, we are expected to see just over 400,000 individuals immigrating to Canada.
For this reason as well as many others, there is no sign of a market decline. We simply do not have the product that is needed to accommodate the volume of people looking to purchase and invest in real estate today. As a result of all of this, we will see the market not only continue to remain strong but also continue to grow and thrive.
Another very interesting point that I want to quickly touch on is that the tenant pool is also going to continue to become stronger and more robust as first time buyers as well as empty nesters are opting to rent as an alternative. This is no secret as most investors already knew this and that is why they are buying up inventory, afterall.
What Can We Expect?
If you are a first time buyer, this may potentially be the best time to buy, within the last year and a half. If you are a seller, you will have the opportunity to sell your home under much more relaxed conditions. Lastly, whether you are an experienced or first time investor, you will see much more inventory that will allow for you to build and grow your portfolio.
Overall, I strongly believe that there is no reason for buyers, sellers or investors to panic. The so-called chaos is leveling off, there is a surplus of exciting inventory and I truly believe that there is a ‘win’ for everyone in this market.
The current market is a market that we can all sustain and thrive in. A gradual appreciation is much better than a 10-20% increase in one month. We are heading into an incredibly strong year and we will continue to see normalized appreciation moving forward.
Welcome to a balanced market. If you would like to talk about it further, connect with me and our team at Rego today.