IS THE MARKET GOING TO CRASH???

✅ Lots of people are wondering where the real estate market is heading. I am sure your family, friends, and/or co-workers are telling you that market is crashing or will crash. It is important to ask them to first share to you the source? Secondly you need to see the LOCAL data before making a conclusion.

✅ If you have bought your current home or rental property in the past 10 years, we've only seen rising home values. But during the pandemic was when we've seen an unprecedented growth in home prices. We know those unsustainable home prices weren't going to last and prices have now continued to downtrend with the rise in interest rates. But this has not led to affordability and on the contrary it further made homeownership out of reach for many, even the rents continue to rise.

✅ Looking at the chart below, you can see that new prices have declined 16% yr over yr, listings take longer to sell, & new listings have increased by 26% yr over yr. If we look at the monthly change, sold/leased homes have declined 18% & new listings are less by 3%.

MARKETS ARE LOCAL

✅ What do I mean by this? There are places that have gone up 30% or more in home value in the past year and it's usually the ones that are affected and have since declined significantly in terms of pricing. (See below latest chart)

✅ If you're a speculator who intend to flip a property, then this is not the market for you. There's a ton of risk involved in planning and executing it. There's volatility in the price of construction materials, it's hard to get construction contractors, and the rising interest rates on your loans.

✅ But if you're not a home flipper and instead you're buying it to live in or to rent out, the current market situation may be less of concern to you. Buying a principal residence would have to be based on your specific situation - location to work or school if you have kids, mortgage payments, homeownership costs, etc. When buying a rental property, you always have to based it on the fundamentals that you use no matter where in the real estate cycle whether it's in a downturn or a hot market. This means buying in a location where there is good demand and calculating your income vs expenses to find out if it's a good investment. A very important thought is that when home ownership and affordability is out of reach for many, the demand for rentals are high. And with increasing immigration to Canada (I know many of you have families or friends who rent out to students & immigrants), low inventory of houses for sale, and builders cancelling new constructions, it's only going to get worst. My take is it still is a good time to invest in good rental properties with proper due diligence and working with knowledgeable professionals on your team. And as the Warren Buffet quote says:

"Be fearful when others are greedy and greedy when others are fearful."

Got a Real Estate or Mortgage Question?

Click Here!

GOOGLE Client Review: