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:
- 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.
- 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.
- 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:
- 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.
- 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.
- 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.
- 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.
- 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.
Tel: (204) 226-1261