Is The Canmore Real Estate Market on the Rise?
February 14, 2017
Why, you might ask, do I end the title of this blog with a question mark?
Recent history has shown that rising markets in Canmore homes have been short-lived. While prices certainly rebounded after the 2008 down-turn, subsequent upward movement from those levels was met with resistance. I remember the chatter around Canmore, going into the summer of 2013. It’s safe to say that sales were brisk. Listings would come to market, then trade, in fairly short order. If that property met the criteria of the buyer, that buyer tolerated the fact that the home was priced somewhat higher than a similar one which sold previously. Unfortunately, the mechanism which halted this market move was the Great Flood of 2013. An isolated incident, but still one which rocked the local community.
We came back at a remarkable pace, with respect to how quickly things were normalized for most in the Bow Valley, but the fact remained that the summer was lost to those who wanted to sell at that time. Fast-forward some months into the future. Oil is trading near $100 per barrel and Calgary is riding high. The market “froth” had returned with sales again picking up, then, Alberta ran head-long into the Oil Crash. This certainly had a noticeable cooling effect on the Canmore market, with an even more pronounced and ugly outcome in Calgary itself. Since 2008, buyers have had every reason to doubt upwardly mobile prices.
Today, we are faced with a similar pattern: Home prices on the rise, with the number of days on market shortening. For the buyer used to having time and options, to consider, the past few weeks have been surprising. If you’re new to the marketplace, you are confronted with few choices. If you’ve been looking for a while, the feeling might be one of having waited too long. Both are uncomfortable positions to be in. Typically, one might look to move quickly on homes that fit the bill. That usually means paying close to asking, as sellers are usually not keen to move much in a negotiation, especially if they’ve only been listed for a short period of time. Compounding the foregoing is the rather low number of properties for sale at the moment. When a single-family home appears in local listings for under $800,000, it is heavily scrutinized. Buyers new to the area who are looking for deals based on the past performance of the market may doubt the asking price, so they wait. Another buyer, who has seen the accelerating pace of sales of properties, may be faster to act. While both parties might have the same thought of “That home seems to be $25,000 high”, the latter will act, absorbing the cost, while the former will only bear witness to the trade. What mechanism drives this? The latter buyer is tired of being scooped, so they write the offer and forget about “getting a deal”.
Let me preface the next part by saying that while we were very successful in foreseeing the market turn in 2008, positioning our clients well for that precipitous market move, we can’t say we’ll get it right this time. I personally like to tell people that, generally, “Any crystal ball counted on in the past has rolled off the table and smashed”. That said, the closer in time to “the Now” that you’re commenting from, the better chance you have of getting it right. We do know a few things, however…
There are buyers out there. They may be new to the market or have possibly been around for a while, but they are there and they are buying. There is low inventory. There is a perception that prices are rising. At the very least, the number of days on market for desirable homes is shortening, which is a precursor to rising prices.
At first, this should be seen as a great opportunity for sellers. With very little competition, one should be able to bring their property to market now and sell. This flies in the face of “Seasonality” which commands most of us to wait until spring to list. Currently, there is no better time than… Currently! Should you wait until spring, you, as a seller, take risks in two areas. The first is that there will be more competition, as other homeowners come to market at the traditional time. The second is that you leave yourself open to “Black Swan”, or events not expected, like the ones that came along the last few times things were on the rise. Certainly, if you list now, you stand the chance of selling for less than if you wait, and prices are higher in 90 days. That’s a fair point, but the mid-term risks out there in the World right now are considerable.
As a buyer, you might have pause, thinking; “Well, that great. Sellers are being told to raise their prices!” That’s true, but I’m also suggesting to that group, as above, to list now. If my advice is followed, these homes may not be as costly as they could be in 90 days. If you’re one of the fast-acting buyers, you could get better pricing than in the coming months.
Both parties share risk. The seller, who might not get a whopper number later, takes a gamble. The buyer does too, as the market could turn down again, due to any number of factors. Again, none of us can predict the future, but it’s a whole lot easier to have an idea of what might happen in the coming week, than the coming months. Our tea leaves say that the market will be strong in the short term, so get into it while you can.
We are always excited to answer questions you may have about this topic or any others from the real estate market today. Let’s talk more! Contact us HERE.
Photo: Craig Douce RMO photo
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