Many homeowners are understandably worried about all of the talk about the shifting market and houses dropping in value. For those that bought recently, when prices were at an all-time high, that worry can escalate into full-on panic, especially now that interest rates are on the rise.
The media has seized upon the changing market, causing a level of alarm that is simply not warranted.
If you bought a house in Guelph hoping to flip it for a quick profit, you might be in for a rough ride. Selling now means you will almost certainly take a loss, especially with the newest tax legislation regarding house flipping.
You will likely need to hold on to your investment for longer than you thought until conditions pick up. But if you plan on keeping the property for a few years at least, news of the shifting market should not cause you distress.
What’s Really Happening In The Market?
The rapid increase in real estate prices appears to be at an end. Values are down slightly but remain historically high. Even if your house dropped significantly, the market will rebound. It always does.
There is one group of people, however, that stand to benefit immensely from the shifting market. Downsizers are in an excellent position. Some homeowners have wanted to move to a smaller place for years. However, they were too afraid to sell for fear of getting priced out of the market.
A Justified Fear – But No Longer
A few months ago, buying a house was no easy feat. Home values shot up so quickly that a property that was affordable at the beginning of the month could be out of your price range a few weeks later.
As a result, many would-be downsizers decided to stay put until things stabilized.
And after a series of interest rate hikes by the Bank of Canada, the buying frenzy has slowed down. More listings have become available in Guelph, and houses are staying on the market for longer periods of time. Last month, the average number of days on the market reached 12 days.
That’s a far cry from January and February, when houses sold almost immediately after being listed!
Downsizing can be an exciting time in your life but is never an easy decision. Here are some other posts to guide you:
- When Is It The Right Time To Downsize?
- Buying An Older Home? Here Are The Red Flags To Watch Out For
- Preparing Your Home For Sale In 3 Steps
More Opportunities For Downsizers
As a current homeowner, you are far less impacted by price fluctuations and interest rates than a first-time buyer would be. Prices coming down mean you might get less when it is time to sell your house. But the home you buy will also cost less.
The equity you’ve built up over the years will help fund your next purchase, especially when buying a smaller, less expensive property.
The most significant advantage that downsizers have now is less competition. Although Guelph is still considered a seller’s market, it is nowhere near as competitive as it was earlier in the year. You’re no longer up against hordes of buyers vying for the same house, and bidding wars are much less frequent.
As a result, you can take your time searching for your new home and can afford to be more selective. Best of all, conditional offers are being accepted again, making it much safer and less stressful to make a purchase.
What does downsizing look like in this new reality?
Start With Clear Expectations
If you sell your existing home now, you simply will not get as much as you would have during the market peak. Housing values in Guelph have slipped 10% since the beginning of 2022. However, prices are still higher than in 2021, and it remains an excellent time to sell and buy a smaller house or condo.
What is the market like in Guelph at the moment? See our latest real estate update right here.
Why Sell First?
For the past two years, we would rarely recommend selling your home without first securing a new one. The market moved too quickly, and your closing date could happen before you found a new place to live. And in the meantime, the price of houses kept skyrocketing.
Today, we recommend selling first before searching for your new house. Since the market has stabilized, you no longer have to worry about skyrocketing prices after your sale.
Selling first is generally a much safer option. And since you know exactly how much you will earn from your house, budgeting becomes much easier.
Want more guidance as to whether to sell or buy first? We have a whole article on the topic here.
How A Local Real Estate Agent Can Help Downsizers
Even though the market has shifted, there are still ways to earn more from your sale. Thorough cleaning and decluttering is a great place to start. However, a local real estate agent can give you dozens of simple, low-cost ideas to increase the value of your home. Maximizing your sale now is essential because it gives you more options for your next step.
When buying a smaller home or condo, an experienced real estate agent is even more critical, especially if you are close to retirement age. Selling a larger home can leave you with extra funds that make it easy to spend too much on your next property.
While no one wants to overpay, you have more risk tolerance when you’re young. If you spend too much, you have your whole life to earn that money back. When you’re retiring, you can’t afford to risk your future or your comfort.
An expert who negotiates on your behalf will protect you at every turn, and help you obtain the best possible price and terms.
We have worked with downsizers in Guelph for years and are happy to answer any questions you have about the process. You can reach out to us right here.
