by Todd Lewys
As recently as a year or two ago, Winnipeg’s real estate market was characterized by bidding wars for homes.
With a low housing inventory and all kinds of buyers looking for homes, it was a sellers’ market. A high percentage of homes sold well over list price. It became the norm to expect a financial windfall if you put your home up for sale. If your home was well-kept and in a good area, you could expect to make a tidy profit.
Fast forward to 2013, and the landscape of Winnipeg’s real estate market has changed. As of August, it was a clear a trend that took hold in late 2012 had carried over into the New Year: while sales of single-family homes were still strong, the market had started to become more balanced.
Figures released this past August verified that perception. Statistics supplied by WinnipegREALTORS® showed that twice as many single-family homes sold below list price as sold for above list. That hard data showed that Winnipeg’s real estate market is becoming more balanced.
“More choice is a good thing for buyers and we really saw that come into play this summer,” said Richard Dettman, the president of Winnipeg REALTORS®.
With more listings available, the bigger question is: How is the more balanced market affecting sales?
Dettman said it has led to increased sales, but more houses are now selling below list price.
“As REALTORS®, we now are telling sellers that they have to price their homes more reasonably in order for them to sell as quickly as possible,” said REALTOR® Jeff Stern. “I tell my vendors that they have to forget about bidding wars. What they need to focus on is the selling price.
“There’s more choice now, and tightened mortgage rules are putting more scrutiny on borrowers,” he added. “These days, you need to have your home priced right for it to sell.”
Fellow REALTOR® Dave Spiers agrees, saying: “These days, you absolutely have to price your property accordingly. That means that you have to have a good feel for what the proper price point is. It’s very, very important that vendors listen to their agents and the statistics they give them about what’s happening with the market at the present time.
“It’s not a case of looking at what other homes sold for six months or a year ago when the market was different. It has to do with now.”
Therein lies a big part of the problem, said REALTOR® Glen MacAngus. “The problem is that vendors’ expectations, in many cases, are too high. They’ve heard about the bidding wars of years past, and think that their home will be the object of one, too.
“A few years ago, a bidding war on a home might of been the rule in such a seller’s market,” he added. “Today, with the market being more balanced, bidding wars are more the exception. If your home isn’t priced right, buyers will move on to one that is because there’s now more selection.”
Spiers said that greater selection is what is driving today’s real estate market.
“If you look back at July/August of last year, we might have had about 2,000 homes on the market,” he said. “This year at the same time, we had about 4,000.
That’s why vendors have to listen carefully to their REALTOR®. It’s our job to keep our clients in the present so they can price their home according to market conditions. That’s the only way it will sell in the shortest time possible at a price that’s fair for both the vendor and the buyer.”
Fail to tap in to your REALTORS’ expertise, and the ramifications can be severe, added Stern.
“Ultimately, the selling price of a home is up to the vendor,” said Stern. “That said, when we tell them what we think the price should be, they should trust us.
“If I say a home should be priced at $375,000 and the seller says $390,000, it’s their call. I’ll tell them it’s likely that the home will sell for the lower price, but will list the home at their price.
“However,” he added, “the reality is, after 14 days at a price that’s too high, the home will be stale bread and could take months to sell. As a REALTOR®, all I can do is try to bring vendors into the reality of what we’re seeing today.”
Which is a market where homes priced in a reasonable manner will sell relatively quickly, and for a decent profit. Provided that vendors put their trust in a REALTOR® who knows what the market will bear.