ROUND AND ROUND SHE GOES!
There’s that old carnival saying, “Round and Round she goes, were she stops, nobody knows”!
Well, that’s what the real estate market in Ottawa and many towns and cities across Canada is like. The number one question we get is “When will this end?”
The truth is nobody really knows. It could end when interest rates climb to a point that makes borrowing too expensive. One reason prices are getting so high is that it’s cheap to borrow money right now and lock that payment in for 5 or more years. We know of several people who were not selling or buying but re-financed their homes, payed a penalty for an early discharge of their present mortgage and still came out ahead because the new mortgage rate was so much lower than their existing rate.
Buyers have been able to get mortgage rates as low as 1.65%. They are creeping up a bit but even at 2 or 2.5% it is still very affordable to borrow money. And with COVID and the economy suffering because of it, interest rates should not jump too much higher.
There may be a time in the future that buyers start to push back against these high prices and tough multiple offer situations. We are seeing a bit of this right now as we right this blog. The stats from March are impressive. Number of transaction are up by 50% compared to last March. Average residential sale prices are up by 35% in the Ottawa area over last March and condo prices are up almost 18% March over March.
The number of offers on individual homes seems to be dropping. Less and less we are seeing 20 or more offers on a home but the majority of sales still involve multiple offers.
So, what do you do? If you’re buying and selling it’s not a huge issue except to find the right home to buy. Financially your home may be worth a lot more than it used to be but so is what you want to buy. If you’re a first time buyer, buckle up! For the reasonable future there will still be plenty of bidding wars, over asking price sales and not enough homes. Number one is get your financial picture in order. Speak to your lender about a pre-approval or call us and we’ll set you up with some of our great mortgage people.
Of course we will help you though every step and try to make the sale and or purchase as easy as we can.
Stay health and safe!
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