Its been a long cold winter here in Northumberland, and along with the frosty temperatures, we saw a cooldown in our local Real Estate Market.
In my ‘2017 Year in Review’ market update, I predicted the strong seller’s market we saw would fizzle, and we would return to a more balanced real estate market. Of no surprise (to me), my predictions for our local market came to fruition.
In the first Quarter of 2018, we saw a total of 274 properties sell which was a significant decrease in the volume; down by 49% over the same period last year.
The overall value of homes in Northumberland is stable with the average sale price increasing by 6% over the same period last year. So although we are continuing to see the value of homes rise in the County, they are not increasing at the double-digit rate we saw last year.
Another way we look at the health of the market is by looking at the number of months of inventory and how long it would take to liquidate current inventory at the current rate of sales. Currently, we have four months of inventory compared to only one month at this time last year.
By analyzing the data, it is safe to say that Northumberland, like most of Canada, has seen a decrease in activity and is more characteristic of a balanced market.
What does this mean for you?
If you’re a seller, it’s time to reset expectations. Gone are the days when you could put a sign in the yard and sell over asking price in multiple offers in a matter of days. With the changing mortgage rules, buyers have to re-evaluate what they can afford. Buyers will also be looking to negotiate more favourable terms and conditions. Sellers need effective marketing and an experienced negotiator who is going to make the difference between selling or not.
If you’re a buyer, it’s essential to meet with a qualified mortgage broker for a pre-approval before shopping for a home. If you were qualified last year, it doesn’t mean you will be this year, and you should expect your buying power will be impacted.
The good news is that with an increase in homes available to purchase and a decrease in the number of buyers, you will likely not be competing for homes in the same way buyers did last year. Buyers will need to have reasonable expectations when it comes to what to offer. Homes are selling for 99% of list price (on average) so although you can expect to negotiate more favourable terms; most homes are still selling relatively close to their asking price.
If you’re interested in an up-to-date evaluation of your home or to learn more about buying in Northumberland, you can contact Jacqueline at 905-375-0062 for a complimentary consultation.