6 Things Sellers Need to Know Today that Weren't True Last Year
The housing market in Armstrong, Vernon, the North Okanagan and in general has been a seller's market throughout the pandemic, but is this still the case? The current trends are pointing towards an end to the real estate market conditions that created a bonanza for sellers. Many issues created a high-pressure market environment severely skewed in favor of sellers. From sky-high home prices, intense competition between buyers, and tactical play from sellers waiting for the right moment to put their homes for sale.
It's worth saying outright: things are changing, and there are things home sellers need to be aware of today that weren't true last year. Here's what they are:
1. Home prices growth is returning to pre-pandemic levels
This is not the same as saying home prices are declining; they're not. Prices are still growing and won't begin falling in the foreseeable future. It's the rate at which they're increasing that's changing. All the signs point to a return to pre-pandemic levels of growth. So, instead of the unprecedented near-20% year increases, we're now seeing the more modest 7-8% year-over-year growth.
This means that the waiting game is over for sellers in practice. You might have been thinking about selling your home but were waiting for home prices to reach their peak to maximize their returns on the sale. But the peak has already passed. It is doubtful that we'll see any more of the skyrocketing levels of home price increases any time soon. So, if you're unsure whether you should be putting your home up for sale right now, the answer is yes.
2. Popular relocation hotspots have the highest home prices
The way local home prices here in the Okanagan behave is always different from national averages. As an area that's extremely popular with homebuyers, we will have different housing market conditions from one that homebuyers are keen to leave. Because of post-pandemic migration patterns, our local conditions have a marked effect on home values. Being a popular relocation area, Okanagan sellers are in luck. You can command a higher home price even if the overall trend is for slower growth. Redfin calls these "migration hotspots" and reports that they have the highest inflation rates.
If you're not in one of those areas, you can still sell at a reasonable price if you know who your potential buyers are. An excellent real estate agent with local knowledge of your area can help find these buyers.
3. More affordable areas are in demand
The overall trend among North Okanagan homebuyers right now is downsizing and saving on housing as much as possible. Moving patterns indicate a strong preference for more affordable areas. People are moving from the biggest and most expensive cities to smaller urban and suburban areas. As such, smaller communities like Armstrong, Enderby, Vernon and Lumby offer good amenities and schooling but don't cost as much as the traditional vast metropolitan areas are popular. Home sellers need to be aware of this.
This doesn't mean you won't be able to sell if you are a home seller living in a metropolitan area like Kelowna. There is always movement both ways, and a general pattern away from a city doesn't equal an exodus. You need to market your home to the right buyer.
4. Homebuyer competition is still incredibly high
As a home seller, you will see headlines like "homebuyer competition drops to the lowest levels in two years" and think you'll struggle to sell. This is not the case. Homebuyer competition pre-pandemic was already very high, with record numbers of millennial homebuyers entering the housing market in search of their first home. This is a generational trend, and it won't go away any time soon. Indeed, you may not sell your home within days of it going on the market, as was so often the case during the pandemic. But you will still sell within weeks in many places.
5. You may not get your first buyer
One of the most prominent features of the pandemic-era housing market conditions was that many homebuyers were willing to waive contingencies to secure a home. There is plenty of evidence that this is no longer the case. As Redfin deputy chief economist Taylor Marr says: "buyers are increasingly keeping rather than waiving inspection and appraisal contingencies. That gives them the flexibility to call the deal off if issues arise during the home buying process".
Some buyers may call off a deal after finding a cheaper home. Others may be forced to backtrack after a mortgage application falls through. While inconvenient, this is a common occurrence and something you must prepare for by giving yourself more time to sell this year than last year.
6. An experienced real estate agent is more important than ever
Housing market conditions are a little trickier for home sellers this year than last year. It is even more critical this year than last year to get a real estate agent with solid experience and expertise in selling your type of home in your area. This will maximize your return on the sale and minimize the potential for delays and a deal falling through. Our team has lots of local market expertise in varied market conditions to share!
We'll Help You Navigate a Shifting Market
Selling your home can be stressful, especially as there are shifts happening in the market around us. Through experience, we're prepared to help you navigate and succeed in this market.