What exactly is a seller's market? It is simply when the number of available properties for sale is drastically lower than the number of buyers looking for a home. As you can imagine, this situation can lead to buyers fighting over one particular property and ultimately driving up the prices.
Like me, you may be wondering what is causing the seller's market this spring. Below are some of my musings and it mostly has to do with more buyer's in the market!
- The spring in general always brings out more buyers
- You may remember putting off your fence or deck project last summer due to the seemingly insane price of lumber at your local building centre. Builders were also feeling the squeeze and the number of new housing starts last spring reduced from previous years as the price of lumber nearly doubled from winter 2020 to spring 2021. Lower inventory of new homes directly plays into the total reduction of housing inventory.
- Low interest rates on mortgages allow more buyers to enter the market and makes home ownership more appealing. The Prime rate set by the Bank of Canada is the lowest it has been in five years which in turn reduces the interest rate on conventional mortgage products.
- Maybe you saw on TikTok a property in Brampton that sold for $600K over list price! Although that is likely an outlier, the housing prices in major Canadian cities has absolutely skyrocketed. Paired with the increase of folks in flexible or work from home arrangements in the post-Covid era, Canadians are moving cross country in search of more affordable housing.
- After staying home for two years due to the pandemic, people are putting higher importance on a place to call their own. Many renters or condo owners are looking to move to a single family dwelling. Some of the most sought after features in these homes are backyard space and a home office.
- Immigration, Refugees and Citizenship Canada (IRCC) is on track to make 147,000 permanent resident decisions in Q1 of 2022 which is more than double than the same time period last year. This increase in immigration to Canada brings more people and they are bringing money with them.
What do you think might be causing the seller's market? Maybe it's even a good opportunity for you to sell your property and cash in!
These are my own independent ideas and are not independently researched.
Posted by Shannon Sharma on
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