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This Month’s Edition
August, 2022
Market Pivot?
We are midway through what has turned out to be a long, hot, dry summer, and soon we’ll be seeing “back-to-school” sales in the mall.
Summer goes so fast, if you haven’t been able to take advantage of the good weather, you should do it now before it’s gone!
The real estate market continues to challenge buyers and sellers. From the frenzy of activity we witnessed in January and February, we are now in a slower period that is 100% due to the increase in interest rates by the Bank of Canada. Rates started creeping up earlier this year, and culminated in the most recent bombshell increase of a full percentage point on July 13th.
The Bank of Canada “overnight” rate currently sits at 2.5%, and it is from this rate that all other rates, including mortgage rates, are calculated.
Current variable rate mortgages from the main banks are touching the 4% percent mark, whereas they were as low as 2.15% just a year or so ago. The current 5 year fixed rates at most lenders are at about 5%, up from 3%. There are some smaller trust companies and credit unions which offer lower rates, but you need to check all the details with your mortgage professional.
So borrowing costs have risen dramatically. This has caused a big dropoff in real estate activity over the last 3 or 4 months. While July’s figures are not out yet, we expect a year-over-year drop in sales of about 30% from July of 2021.
What’s interesting is that the drop in sales, while significant, has had a spotty effect on house and condo prices. Yes, prices are down, but only in certain areas, some more so than in others. Detached homes have suffered bigger price drops than condos have, but even the detached market is mixed. Some areas are relatively healthy, and other areas have taken a hit of up to 10-15%. There has NOT been a flood of listings, with sellers in a panic, and in fact listing activity is down as well. It’s an unusual time.
We expect another interest rate increase from the Bank of Canada at their next meeting, which will be on September 7. The most widely expected amount is one half a percent (.50%). There are now some banking experts predicting that this may be the last increase of 2022. Some are actually predicting an interest rate decrease in the spring of 2023, although it’s anybody’s guess at the moment.
Enjoy the rest of the summer, and take a break from real estate! Everything will work itself out in the end.
Randy Selzer, salesperson, Sutton Group-Summit Realty Inc., brokerage, independently owned and operated, 416.433.3556 direct 905.897.9555-office
Listing Before a Repair or Fix-Up is Done?
If you’re thinking of selling your home, you may have walked through it and discovered that you’ve been ignoring work that needs to be done to make your home look its best. For example, you may have been living with a cracked floor tile that needs to be fixed, or a damaged closet door that requires replacement.
Is it a good idea to get these maintenance issues dealt with before you list? Typically, yes. You want your home to show well. Anything unsightly or concerning will get noticed by buyers.
Fortunately, investing the time and money to get the work done will pay off. It will help you sell your home faster and for a good price.
However, there may be circumstances in which you need to list before repairs and other improvements are completed. For example, if you need to sell within the next few weeks, you may simply not have enough time. In that case, there are a couple of options. Either you can arrange for the work to be done and let buyers know that it’s been scheduled; or, you can let buyers know about the issues and let them know you’re selling as is.
Fire Safety Checks You Should Do at Least Once a Year
Chances are, you know that you should change the batteries in your smoke detectors at least once a year — even if you suspect the batteries are still good.
But that isn’t the only fire safety check you should do annually. Here are some other recommended tips to help keep you and your family safe.
Clean your stove burners and oven regularly. Hard grease build-up can become combustible.
Check your cupboard for cleaning products, paints and other liquids that are flammable. Read each label carefully. Use and store each product only as recommended.
If you keep a fire extinguisher in your kitchen — and you should — confirm that it is still good. Extinguishers are like food. They have expiry dates!
Go over your fire escape plan with your family. Make sure everyone knows exactly what to do if a smoke detector goes off or if there’s a fire.
Check that all windows open easily, especially upper floor windows.
Check appliances you use often, such as hair dryers, for worn or frayed cords.
Regularly clear away lint build-up in the clothes dryer. Check the outside dryer vent annually to make sure it’s clear and working correctly.
If you have a wood-burning fireplace or stove, get it cleaned and inspected by a licensed technician once a year.
Many local fire departments offer homeowners free tips and even in-home advice and inspections at no cost. Contact your fire department and ask about programs available to you.
Getting an Early Start on Selling your Home
You’ve probably heard the expression, “The early-bird gets the worm.” It refers, of course, to those who get in early and reap the rewards. For example, if you arrive early to a retail store for a big blowout sale, you’re likely to get the deals before the inventory runs out. The stragglers who come later will miss out.
Well, this same wisdom can be applied to selling your home. Starting the process early — even if that means simply doing some initial planning — gives you the edge in several ways.
First of all, you get extra time for preparation. That means you can get your home cleaned, uncluttered and staged without feeling rushed. You also get more time to find out how much your property will likely sell for on today’s market. That’s important information, especially if you’re also looking to finance a new home.
Secondly, there’s less stress. You’ll have more time to make the right decisions. The last thing you want is to be scrambling around, last minute, trying to get your home ready for sale.
Finally, with your initial preparations done, you’ll be able to put your home on the market at a moment’s notice. That’s a huge advantage that’s likely to lead to selling your property more quickly and for the best price. In fact, by getting an early start on the process, you might even find that this is the best time to list — and you’ll be able to do so, with confidence.
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