It is no surprise that the 2023 real estate market has been a roller coaster, but we’re starting to believe that we’ve reached the bottom of the dip, and deals are to be had! If you’ve been watching the real estate market, you’ll know there’s a lot of inventory. But do you know the root cause of the increase in inventory? Have you been searching for deals? Here’s my two cents on what’s going on and where the great deals are lurking –I thought a scary word was appropriate given that this is being published on Halloween.
Who’s listing for sale?
Everyone! As always, there’s a long list of motivations out there. Babies are being born, divorces are happening, job transfers, you name it. And, if you’re among the many people considering a move, don’t be afraid to do it now; it’s a great time, especially if you’re upsizing, just getting into the market or looking for an investment property. The key is understanding the market and whether to buy or sell first. However, while there are many common reasons that people are choosing to sell, there are a number of uncommon ones, which you can read about below.
How to get a deal when buying real estate in 2023
Real estate hasn’t been this cheap in a long time, and options haven’t been this abundant. Here’s where to focus your attention if you want a deal:
Power of Sale: Commercial and Residential real estate is seeing a surge of power of sale property as property owners default on mortgages. Banks are required to try and get fair market value in the sale of a property, so don’t assume you’re going to get a great deal, but as these continue to sit on the market for extended periods, you may find opportunities. Remember that power of sale properties come with greater risks as banks will typically sell them “As-Is” with no guarantee or warranty; they have little to no knowledge of the house, and you’re assuming greater risk. Real estate agents can quickly determine if a property is in power of sale by reading private remarks on the real estate board listing or by confirming who the listed seller is (i.e. is it a bank or an individual?)
Assignment Sales: We’re seeing more assignment sales than ever. This is when a buyer, generally of new-construction real estate, attempts to sell their contract to close on a property. This was a rare occurrence in the past, and if it did occur, it was for different reasons. Somebody may have tried to ‘flip’ their new construction condo to make a quick buck before ever closing on the property, but today, people are doing it because they can’t afford to close –those are two VERY different scenarios.
New Constructions: In over a decade in the industry, I have NEVER seen so many builders throwing money and incentives at buyers and real estate agents. If you prefer new construction, contact a realtor to take advantage of some huge savings and incentives in this segment. New construction properties can be an excellent fit for those wanting a long closing, especially first-time buyers who want to save a larger downpayment.
Rental Properties: The rental market is already in dire need of repair. Rental prices are astronomical and rising by the day. The rise in interest rates has made it cost-prohibitive for many real estate investors (landlords), so they’re unloading their properties. Sometimes, this is because the cost to carry that particular property is too high, or they’re over-leveraged on their primary residence and need to free up capital. This means fewer properties will be available for tenants to rent, further straining the rental market.
As of today, October 26th, 2023, in Milton, Ontario, of the 75 condo apartments for sale, 24 are owner-occupied, 37 are vacant, and 14 are tenanted. It’s safe to assume the vast majority of the 37 vacant properties were previously rented, potentially meaning there will be 51 fewer condos available to rent.
Read the Remarks: We now see many listings with private remarks on real estate boards saying “Motivated Seller” or “Send All Offers.” This could be a strategy to get more people through the property, and then they hold firm to the price, but it could also be legit, and they’ll be willing to sell for significantly less than the listed price and perhaps much less than market value.
Whether you’re looking for a primary residence or a long-term investment, there are deals to be had if you’re patient and open-minded. If you’re in the market to buy real estate, one of our real estate agents can walk you through the process of finding a great deal. It all starts with a quick message.