While real estate in Ontario has been red hot in recent years, things are slowly beginning to balance out. Today, many buyers are enjoying new advantages as a result of the stabilizing market conditions.
In some ways, buying a home today can be a different experience than it was even two years ago. As a buyer, being aware of the latest market trends can help you be successful all the way through to closing day.
Here are a few things you need to know about entering today’s marketplace as a buyer.
Interest Rates Are Back On The Rise
In early 2020, the Bank of Canada lowered their target interest rate, making it easier for Canadians to borrow money. This caused a lending frenzy and led to a new wave of buyers in Ontario’s already competitive housing market.
Two years later, interest rates are back on the rise in order to combat inflation. As a result, fewer people are able to afford financing and less buyers are entering the market.
While many Canadians are impacted by this change, if you are still financially eligible for homeownership, now is a great time to buy.
In any market, there are a few things you can do ahead of time to make the financial elements of buying a home easier. For instance, getting pre-approved for a mortgage or having a sizable down payment ready to go can make sellers feel more secure in your offer.
Want to learn more about financing your new home in 2022? Explore our blog post on rising interest rates here.
Growing Inventory
Despite homes still being listed for sale at a similar rate, fewer buyers today are entering the market compared to the past few years. As a result, the supply of available homes in Ontario is slowly catching up to the demand. As a buyer, this trend may impact you differently based on your local market. However, most buyers today have more homes to select from during their housing hunting process.
What About Multiple Offers?
With the demand for housing outpacing supply, a home on the market would often have several interested buyers at a time. This competition caused a spike in multi-offer scenarios where buyers would submit hyper-competitive offers on a single property, triggering a bidding war.
As a result, bidding wars soon became the status quo in Ontario real estate.
Today, multiple offer scenarios are far less common. However, they do still occur based on property type or local market conditions. As a seller, your real estate agent can help you prepare your home for the market to ensure it captures the eyes of as many buyers as possible.
Return of Conditional Offers
During the peak of Ontario’s active seller’s market, most of the offers placed on for sale homes were ‘clean’ or free of contingencies. This was a result of their competitive buying atmosphere within the market. As most sellers could expect to receive multiple offers on their home, buyers needed to do everything they could to make their offer appealing.
Today, clean offers aren’t always necessary. With less competition in the market, buyers can feel comfortable adding conditions to their offers.
Stable Prices
Despite a less competitive buying atmosphere, housing prices aren’t dropping significantly just yet. However, this may change in the future depending on market activity. For the most part, Ontario’s previously rising prices have now plateaued.
As a buyer, the slower market may offer you additional leverage during the negotiations phase too. For instance, you may be able to submit an offer below the asking price or include important conditions that would be otherwise left out in a seller’s market.
About to begin the search for your new home? Explore these helpful resources first.
- How to Know When You’re Ready to Buy a Home
- How to Make Your Move as Budget-Friendly as Possible
- What to Look For in a Home Viewing
Working With An Agent
Working with a great real estate agent is a crucial part of successfully buying a home regardless of market conditions. Not only can an agent help you find an amazing home, but their expertise and insights can offer you unique advantages as a buyer. Plus, they can guide you through the entire buying process, from exploring listings to making an initial offer and the final stages of closing.
Thinking about buying? Get in touch to find out how our expert agents can help you land your dream home!
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