December Real Estate Update – Holiday Spirit & The Slowing Market

I went on the ice today for the first time in a few years and managed to stay upright with the help of a hockey stick. It was for the purpose of shooting a video with Lindsay Bosma. It should be up on my socials in the next few days, and you can let me know if you think we’re friends or foes.

Our third annual Christmas Minis took place in November and was hugely successful. We raised $3550 for Airdrie Power, the women’s shelter in town. Santa and Mrs. Claus made appearances, and I was the reluctant elf, although I ultimately embraced the role minus the idiotic hat. Sorry, this is a lot of elf talk so early in the newsletter. It was really nice to have an opportunity to see some of you and to catch up, even briefly. Chelsie captured some great shots, and it was honestly heartwarming to see the kids excited about Santa.

Many of you are wondering about the market, and I don’t blame you. It’s been a little weird out there. The market has slowed down. I noticed it in August and wondered if it was seasonal. It was a great month to be outside, soaking up the gorgeous weather. Sitting in my office, looking out at the fallen snow, I miss August and its warm embrace. I could write an ode to August and festoon it with praises from the bottom of my heart; it really is my favourite time of the year. As we passed through September, the market did not improve, and as we entered October and then November, it was clear that homes were not selling as quickly as they had earlier in the year. Each month, the supply of available homes on the market has continued to rise. This has shifted us into a more balanced market.

If you’re wondering what’s to come, here’s my take: Interest rates are expected to continue falling each quarter by at least a quarter point until Spring/Summer. If this happens, it will affect variable rate holders and those with lines of credit, thereby easing some economic woes (life becomes more affordable). This, in turn, creates more purchasing power, which stimulates the market. In my opinion, this is a very optimistic take. As a Realtor, I like it, but I’m not entirely convinced. With the recent election, our loonie has continued to suffer against the American dollar, and it’s at its lowest point in 5 years. Outside of the pandemic, levels have not been this low since 2015. If it continues to trend downward, it could impact the cost of imports like food and gasoline, which could counteract the effect of a lower Bank of Canada rate for many people. I don’t have a crystal ball, but I predict we’ll see a somewhat sluggish spring. Things aren’t going to pick up and go crazy, as we’ve seen in the last few years. And if I’m wrong, good!

Market-wise, I advise going against the popular rhetoric.

For sellers, this means pricing your home to sell in this market. Don’t assume things will be better in the spring. The spring will likely bring more listings (which means more competition), which could, in turn, drive the prices down. Lowered interest rates are not guaranteed.

For buyers, my advice is also not to try to time the market. If you think you’ll secure a better rate in the spring, then get a variable rate for now so you can lock in later. Go against the grain. Most buyers are waiting for rates to come down, and if they do, then you’ll compete with them in the Spring, which means you’ll end up paying a lot more on a purchase price than the cost of a few higher mortgage payments.

If you want to chat about this further, I’m always up for a coffee or a lunch date. If you’re looking to cozy up on your couch over the holidays and want something engaging to read, I highly recommend Remarkably Bright Creatures by Shelby Van Pelt.

It’s a sweet, moving story and in an interesting twist, one of the narrators is an octopus. They’re such fascinating creatures, remarkably bright too. 😉

Merry Christmas to you and your family.

See you next month!