Stable Real Estate Market in Canada, Despite Sluggish Conditions

A stable real estate market across Canada has been marked by improving sales, elevated inventory, and flat prices, according to Robert Kavcic, senior economist at Bank of Montreal. However, sluggish economic and job market conditions, the Bank of Canada's stance on hold, and mortgage rates hovering above stimulating levels are dampening buyer enthusiasm in some regions, particularly in Southern Ontario. Market psychology is also a hurdle, as buyers hold back due to expectations of falling prices.

Key Takeaways:

• Robert Kavcic points to sluggish economic and job market conditions, the Bank of Canada on hold, and mortgage rates hovering above stimulating levels as factors dampening buyer enthusiasm in some regions.
• The economist notes that market psychology is holding back buyers, with expectations of falling prices contributing to the hesitation.
• In Southern Ontario, particularly in Toronto and beyond, a glut of condos has pushed prices down, while single-family homes are holding up better but still experiencing price declines.
• In mid-sized Ontario cities, real estate agents are having to employ innovative strategies to close deals, such as adjusting asking prices and setting conditions for offers.
• Some homeowners are using an "escape clause" in their listings, allowing them to continue showing properties while offering buyers a time frame to waive their conditions.
• Aimee Puthon of Coldwell Banker Neumann Real Estate successfully utilized this strategy to sell a home in Guelph, Ontario.
• Broker Faisal Susiwala of Re/Max Twin City Realty recommends setting an asking price 5-7% below the desired sales price and adjusting the offer date to Tuesday from Monday to give buyers extra time to prepare.
• Susiwala advises clients to accept that the market has spoken if the property does not sell within two weeks, and to list the property for lease or wait to re-list it later.

Statistics:

• Depending on the region, some homes in Southern Ontario may be experiencing price decreases of up to 10-20% compared to the peak of the market.
• The typical offer night has been moved to Tuesday from Monday in some Ontario cities to give buyers an extra day to prepare their offers.
• According to Faisal Susiwala, setting an asking price 5-7% below the desired sales price has increased the chances of competing bids for homes in the average price range or below.
• In some cases, it has taken up to five weeks to close deals, as seen in the sale of the $3.7-million farm listed by Susiwala.

Sources:

• Robert Kavcic, senior economist at Bank of Montreal
• Aimee Puthon, real estate agent with Coldwell Banker Neumann Real Estate
• Faisal Susiwala, broker with Re/Max Twin City Realty