|Happy Spring!!! We’re all eager to spend time outside, enjoy the sunshine and watch the earth come back to life again. Many people believe that spring is the best time to list their home when it looks it’s absolute best but the numbers so far this year have proven that anytime is the best time to list. |
The upward trajectory of prices during this pandemic have completely defied what policy makers and economists had predicted a year ago and now many are raising concerns of an overheated market. It’s especially hard right now for Buyers and the fear of never being able to afford a home, much less a condo is very real.
However we can’t ignore the most basic of economic principals regarding the relationship between supply and demand. It’s a complete Sellers market right now in most regions across the country. Housing supply issues have been a recurring theme for several years and policy makers need to focus on boosting supply rather than finding ways to stifle demand. You’ve heard me say this many times and I’ll say it again. The priority needs to be on increasing supply whether by speeding up the new housing approvals process, adjusting municipal zoning to allow for more medium density housing in urban areas or increasing the supply of affordable rental housing.
The pandemic has only exacerbated the demand for change as the lockdown has forced people to reevaluate and focus on the importance of home as a multi-purpose space – home office / gym / day care/ virtual classroom. Those with stable employment found increased savings by not spending on the usual indulgences – travel, clothing, entertainment. With ultra low interest rates easing the cost of borrowing it’s no wonder that so many decided to buy rather than rent, move away from or upgrade within the city.
We’ve heard today that the government is no longer considering a home equity tax or capital gains tax on our principal residences. Considering that the housing market and it’s ancillary home related sectors fuel the economy this was most definitely a wise decision. We also know that the government can’t raise interest rates due to the economic strains of Covid.
So what to expect? I’d say…more of the same though all of 2021. Even if we see a surge in new listings, prices are still going to rise. It’s inevitable.
Sellers at all price points will do exceptionally well but on the purchase end you’ll will be in fierce competition. To be a downsizer is an ideal scenario but even if you’re upsizing or a First Time Buyer, consider for a moment the integral value of home. Home is … security, safety and solace.
Most people don’t move for at least 5 years. Many stay longer. Do you honestly think that the price you pay today will be exactly the same in 5 or 10 years from now? All you need to do is look at this historical housing chart for the last 46 years and you’ll see the slow and steady upward trajectory of home prices and the benefit of investing in real estate.
So, if you’re compelled to buy and can afford to do it, then I say put your fears aside and just do it. Conversely if you’re tempted to sell you couldn’t find a better time. It really is the perfect storm.
Contact me for a complimentary value analysis of your home or investment property.