May 2021- Market Update

April 15, 2021

As usual the latest market stats will appear in my monthly Stilhavn newsletter. If you are not a subscriber and would like to be, please let me know. This below is my personal take on what’s happening out there.

It is hard to write anything about the market right now without sounding like I’m adding to the hype. Trust me, that is the LAST thing I want to do! There are still pockets that are not too crazy, but the majority of segments are so skewed in favour of the Sellers that it is making things extremely challenging. Lawyers, lenders, appraisers, inspectors, Realtors acting for Buyers, and above all of course the Buyers themselves, are feeling the strain and trying to cope as best they can. Making and facilitating decisions of this magnitude under such pressurized conditions is not ideal and the need for cool heads to prevail is greater than ever. The sheer volume of transactions combined with the sharp increase in values (fuelled by bidding wars) is a potential recipe for disaster if not approached correctly. I have been fortunate to be able to help many buyers successfully navigate their way into new homes this year, and in most cases we have been able to avoid competing situations completely.  

So when will all this change again (because it will) and why? The Federal Government is talking about intervening in the form of another mortgage stress test, however I am not sure, whether it happens or not, that it will be necessary. The market here is a sponge that seems to soak up every last bit of available cash/spending power. Once it has done that it slows down again naturally. By the end of last year, combined with low interest rates, Buyers had more disposable income, because during the pandemic they had not been spending it on other things, like travel, restaurants, clothing, entertainment etc. I would expect to see the prices stabilize as early as the summer, once that surplus has been absorbed by the recent increases. This may also coincide with those other activities becoming more possible again and therefore more of a priority to prospective Buyers. In the meantime, it is as a result a very very good time to be a Seller, so if that is something you are considering I would strongly advise that we connect sooner rather than later and we can come up with a plan together.