In my article at the end of April of this year, I wrote about a shift we were starting to see in the market and basically the tides have now turned! We have seen a price drop of about 30% since this past February, which eliminates any seller’s equity gains from February 2021.
I believe we are seeing a few things merging together that got us to this point. Firstly, interest rate increases have indeed caused many buyers to be knocked out of the market. While others are reassessing whether a move is wise right now as prices are declining. These buyers may be trying to time the market. Then we have buyer fatigue followed by summer vacation. All of this has shrunk the buyer pool and now sellers are feeling the pinch!
Our supply of homes on the market is back up to 2019 levels. The average number of days a house stays on the market has tripled to 21. The last time Kingston & area saw this was May 2020. What this means for a seller is the expectation that buyers will have more power to negotiate. We are back to putting financing and home inspections clauses back in offers.
Experts say we will continue to see further price drops. This makes sense based on history. October to December is typical for a softer market.. So I would agree with them.
What will Sellers expect?
- Longer selling periods
- Significantly less showings
- Conditional offers
- More negotiating (like the “good old days”)
- More preparations to put your home on the market
- Using more experiences agents who have worked in this type of market
Are homes getting multiple offers still? In some cases yes. Usually homes which are in very good – nothing to do but move in condition are going faster, and in some cases, with multiple offers. But even those offers generally have conditions. Secondly, there are some homes which are still being listed below market value. These homes will attract more buyers and hence more offers but not necessarily more money.
Should you wait to list your home? This really becomes a one-on-one conversation with each Seller to determine the urgency of the sale, what your overall plan is, what your financial position needs to be in the end, etc. Having a frank discussion with an experienced agent will ensure you work towards getting the most from your home in whichever market you decide to sell in. What is important to remember is that although your home may have sold at a much higher value in February, there is always the other question… where would you have gone. We are in a much more predictable period with considerably less stress around the whole process.
For buyers, there are opportunities out there now! But you need to have a conversation TODAY with your mortgage professional to ensure you are ready to buy. Interest rates will have shrunk your buying power to some degree. With prices coming down this will offset the effects of interest rates some. There is considerably less stress for you as well. Just know that there are homes out there that need a bit of love and now is the time to look as the market softens a bit. Your competition with out of town buyers have slowed down considerably. It’s a perfect time to buy!!