When WinnipegREALTORS® asked its members at the association’s annual October technology conference and trade show whether a buyers’ market now existed (e.g., over 4.5 months of inventory), a small majority said that was the case based on their own experiences. Over 40 per cent of respondents said it is a balanced market, while only one per cent said they feel it is still a sellers’ market.
At the end of September, WinnipegREALTORS® president David Powell said Winnipeg’s current market situation, with over 5,000 active MLS® listings over the last three months, is actually in buyers’ market territory.
Another recent MLS® statistic backing up member sentiment that buyers are gaining the upper hand is the number of homes selling for above list price. In September 2014, 18 per cent of all homes sold above list price, while 71 per cent sold for below list price. Similarly, or even to a greater extent, only nine per cent of condominiums sold for over list price with 74 per cent getting less than list price.
This is a far cry from a few years ago, when the RE/MAX Housing Barometer Report in a national study on housing resale market conditions from 2000 to 2010, declared Winnipeg as having by far the tightest market in the country. It said Winnipeg was predominantly in sellers’ market conditions and only balanced 14 per cent of the time. Not once did it even come close to a buyers’ market .
You can postulate a few different reasons without coming up with anything definitive to explain why the local market has loosened up in 2014. For example, rental vacancy rates have increased, enabling more options for consumers to rent as opposed to buying a home. It has been stated that when rental vacancy rates dipped so dangerously low, people needing accommodations had no other choice but to buy a home. Given that the resale market is the most affordable option, it was winning by default. Combine the limited supply of affordable rental units and rising population, due to the success of the provincial nominee program in attracting new immigrants, and you had a recipe for prolonged sellers’ market conditions.
We are also seeing housing affordability become more of an issue for many buyers wanting to get into the housing market, including first-time purchasers. The high point of WinnipegREALTORS®’ single-family home sales was in 2007 when the average house price was approximately $100,000 less than it was going into 2014. Last year, the average single-family home price was $284,000. In 2007, it was just $182,000.
However you slice and dice the market, what does it mean for the last quarter of 2014? It really presents buyers with a golden opportunity, as some homes or condos that were on their wish list in past years may now be available. Choice is there. But at this juncture in the market, you should not assume it will last forever since corrections will take place over time.
As Gary Keller wrote in his book on a shifting market in 2009: “A buyers’ market should be just that — a buyers’ market. It’s not a fence-sitting, waiting, loitering, delaying, dawdling, postponing, vacillating, hesitating, wavering, faltering, pausing, foot-shuffling market. It’s a buyers’ market. By its very name, it means buyers should be doing one thing and one thing only — buying.”
It is true that buyer urgency becomes less important when prices are under control, as the fear factor of losing out is not as prevalent when you are in a sellers’ market. However, you can never exactly time a market, so why wait if there is a home that truly meets your needs and wants and is available for purchase.
If you are interested in taking advantage of better MLS® listing selections and historic low mortgage rates that will help you meet your financial requirements, call a REALTOR® to find out what possibilities now exist.
Happy house hunting.