In a move that's been eagerly anticipated, the Bank of Canada has announced a reduction in its policy rate by 0.25%, bringing it down to 4.75% from the previous 5%. This adjustment marks the first change since July of last year and comes as a response to evolving economic conditions.

Why Did the Rate Change?

The decision to decrease the rate stems from a series of economic shifts starting in March 2022, when the Bank began increasing rates in reaction to unexpectedly high inflation. This inflation surge was a byproduct of pandemic-related financial stimuli and global supply chain disruptions, which impacted prices across the board.

What This Means for You

This rate cut is particularly significant for those in the housing market. Prospective homebuyers securing fixed-rate mortgages and current homeowners with variable-rate mortgages will likely benefit from lower interest costs. This change could make home ownership more accessible to many Canadians and provide some relief to those currently repaying loans.

Economic Overview

The Canadian economy showed signs of recovery in early 2024 after a slowdown in the latter half of the previous year. Despite the GDP growth rate being a modest 1.7%—slower than expected due to dips in inventory investments—consumer spending has remained robust at around 3%. Additionally, there have been noticeable increases in business investment and housing activities. While employment growth has not kept pace with the growth in the working-age population, the job market remains active, and wage pressures are starting to ease.

Inflation and Economic Outlook

As of April, the Consumer Price Index (CPI) inflation rate has dropped to 2.7%, showing a decline from earlier rates. Core inflation metrics have also fallen, indicating a trend towards continued easing. The breadth of price increases across various CPI components has decreased, nearing historical norms.

Despite these positive trends, the Bank of Canada maintains a cautious stance. The Governing Council's recent rate cut to 4.75% reflects growing confidence that inflation will gradually align with the 2% target. However, risks in the inflation outlook still exist, and the Council is closely monitoring factors such as core inflation, the balance of demand and supply, inflation expectations, wage trends, and corporate pricing strategies.

The Road Ahead

The Bank of Canada is committed to achieving price stability and continues to monitor economic indicators closely. This latest rate cut could signal more adjustments in the future, depending on how economic conditions unfold. For Canadians, this means it's essential to stay informed and consider how these changes might impact their financial decisions.

Stay tuned for more updates as we continue to follow this developing story and analyze what it means for Canadians and the economy at large.

I get asked this question a lot right now, from friends, family and plenty of potential clients,

What is the market like right now?

Heading into the Christmas season and the new year is typically a bit of a slower spot in the Winnipeg real estate market, however in 2020 it wasn’t and now again in 2021 it is not looking that way.

The market situation we have here is that the mortgage rates are still fairly low compared to recent years which is allowing purchasers to leverage more money towards a purchase. The other big factor in the market is that there are limited options for houses, as the inventory on the market is coming and going so quickly it requires quick decisions and often an increased purchase price significantly higher than the list price to secure the property.

In the past few months (not unlike the past year and a half) many of my clients are competing with 5-20 offers on each home that they decide to write offers on.  While I understand this is not the same for every property on the market it does represent a large proportion of the options available to many clients. If it is a single family detached home that presents well and appears to have little to no required work necessary then you will generally see offers flooding the property on the offers date. This is also the first year in my career that I have been involved with multiple offer situations for purchasers and vendor clients when working with Condominium sales!

So, what do I say? Honestly, I tell people that it is CRAZY! The prices we are seeing some houses sell for literally blow my mind.  As a professional Realtor my job is to analyze the market and identify what properties should be worth in the given market, but many times there just isn’t a number that you can place on how badly someone wants a home. I have personally had clients offer on up to 10 houses, losing them all in multiple offer situations. Doing everything in their power to make offers more attractive: over list prices, no conditions, vendors ideal possession dates, and still being outbid by tens of thousands of dollars. It usually comes to a point in the process where they just say we will pay just about anything to get this house! And that is one of the reasons we are seeing such large price increases in our market.

When you are up against 10-20 offers there are not a lot of options to make your offer stand out.  It usually comes down to purchase price, as the other top offers in consideration will more than likely be written without purchase protection conditions and anything else the vendors want.

What I am saying is that the vendors do hold a lot of the cards right now, making it a strong seller’s market.  BUT with all of these bidding wars and increased prices happening I will say that I find many buyers to be more in tune with the process and more educated.  There are still clients who are new to the home purchasing game and those ones are generally a much longer learning experience than they used to be, but there are a lot of people who have been paying attention to the market over the last year and understand what is required to secure a property right now.

Some things that are not selling quite as well right now are:

1. Flips. If people can see that you purchased a property a year ago (I think the shortest turn around I have seen for a flip is 3 WEEKS!) did some work to it, didn’t pull any permits and the work done looks sloppy then they are not inclined to offer quickly. Alternatively, if there are permits in place, and the work is done well then people will pay a pretty penny for them.
2. Homes with serious structural issues.  A fact in Winnipeg is that there are a lot of homes that require some form of structural repair.  They can be big or small, but due to our substrate there are a lot of homes that have some need for a structural or foundation repair.  This dry year only proved how many actually do need some work.
3. Overpriced homes. As I said above people are much more attuned to the market, and if a property is trying to stretch a list price in the current market they are not moving as quickly, the issue here is that a lot of vendors are going with extremely low list prices instead, which also adds to the amount of offers coming to a home as there are many people who can not actually afford the home if it was listed more accurately to begin with.

So, would I recommend buying a house right now? I guess it’s a bit of a complicated question, if you are the type of person who is a major saver and likes to get a deal then 100% NO, this is not the market for you. If you are in need of something different for your family or life situation and you need to purchase a home then again, it’s not exactly a great time, but Winnipeg’s market has never really had a BEST time to buy a house.  We are typically pretty stable and slightly increasing year over year. Here are some tips to help with the purchasing process right now:

1. My best advice would be to get a good feel for the market early if you are going to be purchasing.  Watch what homes are listing for and what they are selling for you likely need to be in contact with a realtor to get the inside scoop on the selling prices.  But knowing them will let you see the difference between what things APPEAR to be selling for and what they are ACTUALLY selling for.
2. Have a solid deposit saved up.  While your deposit goes towards the down payment for your home purchase, having a larger deposit to give with your offer gives the impression that you have strong finances and may shoot your offer to the top of the pile.
3. Speak with your lender! Let them know the situation, while a pre-approval is good giving an in-depth assessment of the home you want to purchase and asking for a quick 1-2 day turn around may give you an edge if it is necessary to have a financing condition on your offer.
4. If you need a home inspection to feel comfortable then pay the money up front to do a pre-inspection on the home prior to writing an offer.  It will allow you to get all of the information that you would get from a typical home inspection but you would be paying it out of pocket whether you get the home or not.  It will allow you to make a more informed decision on how much you would be comfortable paying for the home and will likely alleviate any surprises on possession day. Also, an offer with a home inspection condition right now is like a kiss of death, the vendors will likely move to another offer if they see that you have a home inspection in your offer.
5. Write a letter. If it is the home you feel to be the perfect home then write a letter to the vendors, it doesn’t always work as there is very rarely a vendor who will choose a nice letter over $10-20K more dollars, but if your offer is one of the top offers it could push it over the edge as the winner.

Again, I will re-iterate that the market right now is CRAZY but if you want to talk more about your options for buying or selling, I would be happy to take your call, text or email and have a candid chat about what could work best for you.

#AgentLogan

Logan Queen

Tel: (204) 226-1261
Email: Logan@JenniferQueen.com

As most of you know the 2020-2021 market has been something of a rollercoaster, especially for buyers. With almost every home selling with multiple offers and over asking, the financing condition has become a large topic of conversation between my clients and I. My sellers ask why it is necessary if the buyers are stating they are already pre-approved and qualified and my buyers are getting frustrated when losing to a lower offer because the other offer did not have a financing condition written in. Today, I am going to talk about the importance of the financing condition if you are taking out a mortgage on a home and why I still strongly encourage it, even in this market.

First off, lets start by talking about what the financing condition is. The financing condition is there to protect the buyer in the occasion that the lender (bank, credit union etc.) or the mortgage insurer (we will go in more detail about this later) does not approve the buyer for the amount necessary for them to purchase the property. Without this condition, if the lender does not approve the mortgage, the buyer still technically bought the property under contract and is at risk of losing their deposit and even more, the potential of being sued by the seller for breaking contract. Usually deposits range from $10,000.00 to $20,000.00 here in Manitoba but in a market like we are in, some buyers will increase that amount to make their offer stronger, thus resulting in a big hit to the pocket book if financing doesn`t end up working out.

Now most buyers are probably thinking, “Well that all sounds a little scary, but I`m pre-approved so why wouldn`t the lender approve me?” There are many reasons why even after getting your pre-approval that financing can still fall through and it is very important that you understand all of these risks before writing an offer without the financing condition in it. 

Appraisals: Banks and other lenders rely on the “appraised value” of a home to deem if it is worth the amount you are asking them to lend you. They will often times send in their own appraiser to the property after the offer has been accepted to determine its value as they want to make sure if you default on payments, they will recoup their investment. In a market where buyers are offering 80K over the asking price, there is always a chance that the appraised value and the amount offered do not match and, in that case, it would be the buyer’s responsibility to make up the difference in value IN CASH. Unfortunately if there is no financing condition and the buyer does not have the cash to make up that difference the buyer will not be able to come up with the cash necessary to close resulting in a loss of their deposit and once again the chance of being sued by the seller for breaking contract.

Changes in financial buying power: Buying a home can be long process for some and life still continues to go on while you are in that process. Unexpected bills, job loss and large purchases are just some of the reasons why your buying power may have changed between being pre-approved and getting an accepted offer. Just because the bank told you 6 months ago that you were pre-approved for a certain amount does not mean that after purchasing a brand-new vehicle that they will still lend you that same amount of money. I always recommend getting a new pre-approval every 3 months to ensure you are still qualified for the necessary amount to purchase the property we are offering on.

Interest Rates: Most lenders will lock you in at a certain interest rate for 90 days once you go through the process of being pre-approved but like I had just mentioned, sometimes the process can take longer. If interest rates have changed between when you were first pre-approved and when you receive an accepted offer you may no longer be qualified for the amount necessary to purchase the property you offered on, ESPECIALLY if you are writing at the top of your budget.

New “Stress Test” guidelines: Have you ever heard of a stress test? This is a “test” in where a lender will have to qualify you at a higher interest rate than you are currently being offered so that if interest rates rise in the future you will still be able to afford your monthly payments. During busy markets, like the one we just experienced, the government may impose an increase to the amount they are testing you at to limit the buying power of buyers so that the sale prices of homes can equalize or level out a little to keep the market more consistent.

Mortgage Default Insurers: This is a big one. Mortgage default insurance is required by the Government of Canada when a home buyer is putting less than the 20% down payment typically needed to qualify for a conventional mortgage. If you are putting down less than 20% not only does the lender need to approve your mortgage but the mortgage default insurer does as well. Mortgage default insurance insures the lender NOT the buyer in case of default. There are 3 mortgage default insurers in Canada; CMHC (Canadian Mortgage and Housing Corporation), Sagen (formerly Genworth Canada) and Canada Guaranty. Each one of these insurers have different qualifications on which properties and which buyers they are willing to insure and which they wont and for the most part we are completely blind to what those qualifications are. In my experience, this is where financing falls through the most often and unfortunately the hardest to predict. I have seen them deny financing based on outdated electrical, shared well systems, location, asbestos and a multitude of other factors that we cannot control.  The financing condition really comes into play here.

Due to the market we are experiencing I am unfortunately seeing more and more buyers writing offers without the financing condition even though they are taking out a mortgage. As I have now explained, this can be a huge risk to the buyer but also to the sellers who may need to put their home back on the market if the buyer ends up not being able to close. If you are selling your home and there is an offer without a financing condition make sure your agent is asking the right questions; are the buyers taking out a mortgage or paying cash, if they are taking out a mortgage, do they have a back up plan if they are not approved? How much are they putting down?  Have they been pre-approved? These questions can help you assess the risk involved in accepting that offer.  Also, you will want to make sure they have put down a big enough deposit to cover any costs that may arise from the deal not closing due to the default of the buyer, this is especially important when you’ve received multiple offers as you may be declining offers of more qualified buyers that have financing conditions.

Now buyers, there are ways we can still write a strong offer even with a financing condition. Making sure you have an up to date pre-approval is a must. We can include your pre-approval letter in the offer so that the sellers are able to see you have done the work and are qualified to purchase their home. We can also make the deadline for financing as short as possible by staying in close contact with your mortgage specialist/broker prior to writing an offer. Here in Manitoba we typically see financing deadlines within 2-3 business days of the offer being accepted, although I have had some superstar brokers get it done in less than 24 hours! We can also write in detail (and should) a summary of how much you are planning on putting down vs how much you will be taking out as a mortgage. The more information the seller has the more confident they will be moving forward with your offer.

After everything I just touched on, unfortunately it might still come down to removing your financing condition to get you the house of your dreams. If that is the case, you now know all of the risks involved in doing so and you can be prepared to make an educated decision on how much risk you are willing to take. I always recommend having a back up plan in the event financing doesn’t go your way but sometimes you need to just take the risk in life!

#AgentAshton

Ashton Augert

Phone: (204) 781-1767
Email: Ashton@JenniferQueen.com

Advice on how to get an accepted offer in a CRAZY seller’s market.

If you have been following the real estate market in Winnipeg you know it is a seller’s market. There is a lack of inventory and an oversupply of buyers, likely a response to extremely low interest rates. If you have recently sold your home or plan to do so soon, congratulations things are looking great for you. On the opposite side of the spectrum, if you are a buyer trying to get into the market, I have some tips on what you can do to maximum your chances of getting an accepted offer without sacrificing everything!

Working with an agent you trust

This is always #1 in my books. I feel like finding the right agent is almost the same as find your soulmate – I did say almost! Working with an agent you trust and believe in will make the already stressful process of buying that much less stressful. Your agent will be able to give you up to date information about the market and/or specific listings, they will manage their time and yours efficiently, walk you through the process of buying (if you are new to real estate), give you tons of information about homes you are interested in. An agent has the knowledge and experience to tell you the positives and negative aspects of the house, things that might need maintenance soon, what comparable homes in the neighbourhood have sold for, etc. In this crazy market it really is in your best interest to find the right agent for you! So... take the time to link up with an agent, do some research, ask questions, and finally get to shopping!

Pre-approval is Key

Getting pre-approved from a reputable bank or mortgage broker is one of the smartest things you can do to increase your chances of getting an accepted offer on a home you love. If you were to make an offer on a property and you are not pre-approved for, the homeowner may assume you were not a serious buyer and might overlook your offer entirely. If you want to be competitive in a seller’s market a pre-approval is a must. Once you have received your pre-approval, your mortgage broker should provide a letter indicating the details of your pre-approval which can be included with the offer to show proof that you have done your due diligence. As Realtor, we advise getting a pre-approval before your start your search. So... if you are looking to buy a house soon and do not have a pre-approval GET ONE!

Write Your Best Offer First.

In a seller’s market a buyer should be doing any and everything they can to increase their chances of getting an accepted offer. In some cases, as a buyer, you might be competing against 40+ other offers so writing your best offer is extremely important because usually you do not get a second chance to alter the offer once the selling agent has started presenting. A couple of things you should consider before you write an offer.  Is a home inspection a must? Most agent would strongly encourage their clients to complete a pre-inspection. It is extremely valuable to be well informed of the condition of the house you are interested in. I would never tell someone to not do a home inspection. I learn something at every home inspection I attend, and think they are fantastic. In a seller’s market it is more challenging to get an accepted offer if you include a post-purchase inspection as a condition. So that is where the PRE inspection comes in. This is when a home inspector will inspect the home you are trying to purchase before you submit the offer. Yes, that means spending the money on a home inspection before the offer is accepted but again it is all about writing the best offer you can. Pre-inspections may cost between $200 to $300 up front, but for the piece of mind, and for the sake of a strong offer, I would say it is worth it. The second point is an easy one – do not ask for the extras. If the house, you are wanting has a freezer and an extra fridge and it is not included in the listing – don’t ask for it. The third point is if you can write a cash offer DO IT. An unconditional offer is very appealing to a seller and greatly increases your chances of getting an accepted offer.  However, this is something we would need to discuss further prior to writing as many of us can not afford to do pay all cash for a house. 

Deposit Amount

A deposit is to be included along with the offer. It forms part of the purchase price. The amount suggested will vary based on the property and situation in which you are offering. However, the amount you provide shows how serious you are as a buyer because this money ultimately protects the seller if the buyer decides to walk away from the deal after conditions have been satisfied. So…the larger the sum provided as a down payment the more enticing your offer will be to the seller.

Buying a house in this seller’s market is tough, but I encourage you to hang in there. Try some or all of these tips to help you stand out from the competition and put you that much closer to an accepted offer! Happy House Hunting!

#AgentAmy

Amy McDermid

Phone: (204) 470-5356
Email: Amy@JenniferQueen.com

2020 has been an absolutely strange year.  At the beginning of the year (in Winnipeg) at least there were rumblings of the Coronavirus in Asia and I don’t think we were prepared for what the next few months would bring.  With early spring/summer seeing the first cases in Canada and Manitoba there were predictions for the Winnipeg real estate market of a complete decline in sales and home values.  From this REALTOR®’s perspective that couldn’t have been further from the actual scenario.  With homes consistently selling for over list price in multiple offer bidding wars throughout the city it became clear early on that this year would not be the same as many previous.

As an observation on the market I believe a large proportion of the reason for these bidding wars has been a higher number of people who are currently in a smaller property, whether that be renting an apartment, or just living in a smaller home have realized that they wanted something with some more space to allow for working from home, home schooling and general isolation due to our situation with the coronavirus. This has brought out a massive demand for similar property options around Winnipeg, while the amount of homes actually going up for sale has decreased approximately 30% on average compared to 2019.  This has limited the amount of options available to the people looking to purchase and has created our heated bidding and offer system, and also increasing home prices significantly versus the same time last year.

That being said we have also seen issues with appraisal values due to the overpayment of properties, we have seen plenty of banks who offered pre-approvals not give financing to the same clients after an offer was presented on homes.  It seems like even though there is demand for homes there are still barriers to entry into the market during this pandemic. 

Some things to note during this pandemic are that the real estate industry is listed as an essential service and as such we are still operating, but not as usual.  Some of the new systems in place during this pandemic include new guidelines and rules for how to view a property, who can view a property and also when you can view a property.  Below are some guidelines for potential purchasers or sellers that have changed due to the Coronavirus:

1. PREAPPROVAL

• If you want to tour a property, ensure you have a valid, recent (withing the last 1-2 months) pre-approval in place.  Agents are required to pre-qualify buyers before showing them a property and it is in your best interest to know what you can afford especially with all of the bidding wars happening on properties

2. WHO can view a home?

• The Winnipeg Realtors rules for viewing homes have changed and only 2 people (not including the realtor) are allowed in a home at a viewing.  Also, only the people who are going to be on title for the home should be viewing the property.

3. When can you view a property?

• With the new COVID-19 rules we as realtors are not allowed to overlap any showings with other groups.  This means that now you are required to book a viewing (in 30 min intervals) and to go through the property as quickly as possible.  The goal is to limit the amount of touching and overlap between people in any given property.

4. Additional requirements

• Some additional requirements for viewing properties include a requirement to fill out a COVID-19 declaration form.  This for is required for EACH viewing of any home. If you view 5 homes you need to complete 5 disclosures.  These ensure that you are healthy, have not had an opportunity to trace infect yourself or anyone else if you have been exposed to the coronavirus.

The big things to take away from this new system is to get yourself pre-approved prior to any requests with a realtor, ensure that if you are sick you are not viewing properties, and to not unnecessarily tour properties during the pandemic.

If you have any real estate related questions about the new rules, or want to know any other information on the current market feel free to contact us. 

#AgentLogan

Logan Queen

Tel: (204) 226-1261
Email: Logan@JenniferQueen.com

If you’ve been following Winnipeg’s real estate market at all these past few months, you’ve noticed a high percentage of homes are selling over the asking price. You may be wondering, how are there so many buyers that are willing to pay more than what the owners have asked for!? The simple answer: The law of supply and demand.

What is the law of supply and demand? It is a simple economic theory where when demand exceeds supply, prices will rise, and vice versa. How this applies to the real estate market is when there is a surplus of buyers who are looking in a specific neighborhood and there is shortage of homes for sale in that specific neighborhood, the prices of homes will rise due to demand. Resulting in, yes, you’ve guessed right, every buyer’s worst nightmare: the bidding war.

If you are thinking of buying a home in the near future there are some things you can do to prepare yourself in the event that you may encounter a multiple offer scenario.

First Off, Get Pre-Approved. 

Being confident in how much you can afford when competing gives you a huge advantage. This will allow you to feel comfortable with the number you put down on that offer… even if it may be $40,000.00 over asking! Secondly, the time necessary for the lender to approve your mortgage will be cut down drastically, allowing you to put a much shorter time to fulfill your financing condition, making your offer a lot stronger. It is not uncommon to see offers written with 24 hour financing conditions or even no financing condition at all! If you want to compete with those offers, having a dialogue with your lender as well as the pre-approval will give you the tools necessary to do so.

(It is very important that if you decided to write an unconditional offer you ask your mortgage specialist/broker and your realtor all the risks involved in doing so).  A pre-approval means the lender has already done approximately 70% of the work, but still has a few key pieces that they require to get the final approval.

Know Your Market.

This is where you need to listen to your realtor. Find someone who is familiar with the areas you are looking in. See how many homes in that area have gone over list and by how much. This will give you somewhat of an idea to what you may experience when it comes time to put in an offer. Although every situation is different, being educated in what trends are happening in your neighborhood will help you prepare and will hopefully reduce some of the stress involved with these multiple offer scenarios. An educated buyer is the best kind of buyer!

Know the Market Value of the Home.

Market value is defined as “the price an educated buyer is willing to pay for a specific property”. In a “hot market” properties may be listed lower than market value to attract more buyers.  Your agent should be doing a ‘Comparative Market Analysis’ on the property to determine market value so you can make an educated offer. This is not to say properties don’t go above market value, there are many factors that go into what something is worth to someone. It may be that it is next door to their best friend or maybe they just NEED it. It is hard to know what a specific property will sell for, you need to determine not only market value, but what the home is worth to YOU.

Have a Plan.

Bidding wars are stressful, no doubt about it. Talk with your agent about all likely scenarios and what you would be willing to negotiate on. Knowing your numbers before they present offers helps to keep emotions out of it. Keep in mind, in Manitoba your agent does not know what the other offers are and what situations may be associated with them. For all we know, the offer you are competing against could be the owner’s sister. Plans change, but having the discussions beforehand will help ease your emotions at that time.

Write a Letter to the Seller.

Some may say this is a little tacky, but from experience, these have been known to sway sellers in different directions. Read more about the power of a personal letter in #AgentLogan’s previous blog. Let them know what you love about their home, who you are and what you value. Connecting with the home owner may just help get you in the front running to negotiations, its worth a try!

Do a Pre-Inspection of the Property.

The less conditions on an offer, the stronger it is when competing. Putting a condition subject to a home inspection can result in your offer going to the bottom of the pile. This is not to say we shouldn’t do one! Usually, there is enough time before the offers date that you can schedule a pre-inspection of the property, allowing you to write an offer without the home inspection condition but still being confident in the purchase you are making. The only downside to this is if you still don’t get the property you’ve paid for the home inspection!

Be Patient.

The last piece of advice I will give you is be patient. It is not uncommon to write 4-6 offers before finally getting the house you’ve always wanted. This a marathon, not a sprint. I have experienced MANY multiple offer scenarios in my career as a real estate agent, they are all different and they are all unpredictable. Having the tools necessary in advance and the right guidance is key to navigating these crazy things called bidding wars.

Good luck!

#AgentAshton

Ashton Augert

Phone: (204) 781-1767
Email: Ashton@JenniferQueen.com