Happy December and thanks for checking in! This year has been one of the wildest in Brantford’s history. Let’s take a look back at how we got here - and what we can expect in 2018.
This was a year of extremes. We began the year with only 97 homes for sale - this was a historic low for Brantford. Buyers returned to the market in February, competing for the best homes and driving prices up. It was not uncommon to receive 10+ offers on a home and to see the winning offer be $50,000 or even $100,000 over asking price. These extreme conditions continued through April. The median home price jumped 25% in January alone.
In May and June, a massive number of homeowners saw the opportunity to cash-in on their new home equity. In May 336 homes were put on the market followed by another 319 in June.
This rush of new inventory was combined with the Ontario government implementing a set of 15 new rules to intentionally cool the real estate market in July. The effect was immediate and the real estate market saw a dramatic shift in July and August, with supply and demand both returning to “normal” levels.
Fast forward to November and the government announced another set of rule changes around mortgage interest rates. The rules basically protect homeowners against inevitable future interest rate increases. The new mortgage rules are set to change on January 1st, causing some buyers to accelerate their move to avoid having to go through a tougher qualification process in the new year.
Inventory levels are the best indication as to where the market is heading. Inventory reached it’s highest level of the year in July at 317 homes for sale - as I write this today (Dec 5) we are down to only 149 homes available.
Will There Be a Repeat of The 2017 Spring Market?
The short answer is no. This year’s real estate market was a one-time event for Brantford caused by the perfect storm of micro and macroeconomic conditions. The long answer: while we won't see “Spring 2017 Part 2” all the indicators are pointing to a very strong and healthy market. The mortgage rule changes will cause the first 1-2 months of the year to be slower than normal, however, home buyers will adjust to the new rules quickly, and by the time the snow has left our yards I predict we will experience a similar, yet much calmer version of last year.
Home sellers will have new expectations around their homes' value, so don't expect to see the wild bidding wars return (unless the seller purposely underprices their home).
Now more than ever who you work with matters. Having a local, experienced professional on your side will be the difference between winning and losing in 2018.