In the past 3 months, headlines have constantly read that housing prices are falling and inventory is rising. Interest rates are increasing and the sky is falling. But is this all true? This month for Guelph Today, we talk about high versus low housing inventory and how long it takes to sell a house in Guelph.
If you’ve been reading our real estate blog or subscribed to our real estate newsletter, you’d likely notice that real estate prices have fallen from their highs. This is because we were in a constant low housing inventory situation and suddenly inventory started rising.
This doesn’t happen by accident; it’s a result of a shift in balance of buyers and sellers. In this case, the market became too expensive (and frustrating!) for many buyers. Interest rates started rising and sellers became panicked and started listing their homes.
Let’s go through the two myths in this market that we outline in the video:
Myth 1: The market is crashing
“Crashing” is an extreme word that is used to get you to read beyond the headline. And, “crashing” can mean a lot of things to a lot of people. As an example:
The NUMBER of houses sold has decreased dramatically. As we went from low housing inventory to high, buyers also disappeared. As a result, Guelph realized a decline of almost 50% in NUMBER of houses sold.
That is very different from AVERAGE PRICE of houses sold.
As the number of Guelph houses for sale increases, buyers have more choice. They don’t need to compete like in a low housing inventory market. So prices decline- but even then, it’s a 20% decline from the absolute high. But, it’s still the same average price as one year ago in September 2021!
The market in Guelph is not crashing, the entire housing market across Canada and even the US is changing.
At the time of this writing (Sept 25, 2022), there are 254 available houses in Guelph. Is this high? Well, it’s 10x higher than Jan 2022, but has been steadily declining since the peak inventory in July 2022 of 325 listings in Guelph.
Myth #2: There are a record number of houses for sale in Guelph
At the time of this writing (Sept 25, 2022), there are 254 available houses in Guelph. Is this high? Well, it’s 10x higher than Jan 2022, but that’s the absolute low housing inventory we’ve seen.
However, it’s low compared to July when has been steadily declining since the peak inventory in July 2022 of 325 listings in Guelph. In fact, we’re now on a 5 week declining inventory trend.
Regardless of whether we have low housing inventory or high, most people don’t time the market like that. But most people won’t just sell their house because they can get a high price. The other half of the equation is that you need to be buying a house, too.
If you’re moving within Guelph, many sellers debate whether it’s worth it to pack up just to make a lateral move.
Here are a few other reasons that houses go on the market:
Your family situation has changed:
Now that your children have moved out, you’ve outgrown your current home. Although 3 bedroom homes are the norm, perhaps you’re looking for two bedroom bungalows for sale in Guelph? Then, you could cash in some of the home equity you’ve built up for your retirement!
The other major change we’ve seen in an increase in those who have the flexibility to work from home. Home offices are back in style and they take many shapes: basement renovations, a converted garage, loft spaces and more.
You’ve got your eye on a different neighbourhood.
When you moved to Guelph, you had priorities that kept you in a specific Guelph neighbourhood. But after living in Guelph for a while you’ve realized you actually like another area more!
Many first time buyers are looking for that “forever home” in the perfect neighbourhood. But the reality is, they just need to get into the market. Having a 3-5 year plan may be the best option.
Moving to that area could be easy, or a challenge. Things like available listings, price points and homes styles are all major factors in determining a neighbourhood move. As an example, a house in Clairfields is not the same as a home in downtown Guelph. Prices may be similar, but downtown Guelph homes for sale may be fewer! (note many neighbourhoods are named based on realtor maps)
If you are considering such a move, get in touch with your Guelph real estate agents to help you get the right house for your changing situation.
Your priorities have changed
The West End Rec Centre was great when your kids were taking swimming lessons, but they’re 14 now. Guelph General Hospital proximity was great when you worked there, but you have a different job now.
Many homeowners had a motivation at a specific life moment. However, now this has changed and you don’t need to be in that location for a specific reason. As a result, you want to live closer to downtown, the highway, or a Guelph Public Library branch.
You should consider all the costs if the move is mostly lateral- moving can be very expensive. From land transfer tax, to legal fees and realtor commissions, it all adds up. Also consider the type of house you’re moving to: will it cost more on utilities and property tax? Are their condo fees?
You just want a change- and there’s nothing wrong with that!
Sometimes a homeowner just wants a change: new surroundings, a fresh start. Who says you need a “practical” reason to sell? If you’re looking to get into a new home just because you feel like it, that’s your choice. In fact, that may be the best reason of all to sell. You may simply want to move.
We’re noticing a trend. Area code 519 home sellers are deciding to sell in Guelph and move to smaller urban markets. Even though the population of Guelph is increasing, there are smaller Ontario towns of 30,000 people, as well as Atlantic Canada. Both of these options are popular these days!
You want to “unlock” some of that home equity
Let’s be honest- with COVID-19, some people have been hit hard with the unexpected pandemic of 2020. As a result, many have either been laid off or have decided it was time to reconsider their future.
At the same time, Guelph homes prices have increased double digits in 2020, now worth more than ever. Selling now and actually banking some of that equity may give you the financial boost you need at the moment.