2024 Real Estate Market Update
As we enter the final quarter of 2024, we’ve experienced several rate reductions, upcoming mortgage qualification changes, and mortgage rule adjustments, resulting in a more predictable and competitive market on select houses (the nice ones). We’re also seeing the return of bidding wars; let’s look at why bidding wars are making a comeback:
The real estate market changes constantly, sometimes drastically in short intervals. Interest rates, the economy, new home starts, and government policies are just some of the factors that can affect it.
Some segments are seeing inventory dips, certainly of quality and well-priced listings, while others –condos most recently, still have higher inventory levels and less buyer activity. Another challenge for the average consumer is that pricing is all over. List prices often mean very little relative to selling prices. Many homes are overpriced and will sell for much less, or not at all, while others are having success with pricing perfectly or slightly low and coming out ahead –It’s essential to work with a real estate agent whose pulse is on the market.
The current changes happened relatively quickly. Buyer confidence is up as they become comfortable with the steady decline in rates and forecasted mortgage improvements.
2025 Real Estate Predictions
Based on the forecast of further rate reductions, inflation being at target, an upcoming election, mortgage rule improvements on the horizon, and general positive conversations we’re having with buyers, my opinion is that the 2024-2025 winter season will be busier than previous, leading into a more active February with modest increases in real estate values across most segments.
I still foresee condos struggling until the second half of 2025. It’s likely that many of the current investor-owned condos will come off the market by then. Investors will accept that they can’t get what they want (err, need), and inventory levels will return to balanced market levels.
When to Buy Real Estate in Q4 2024 and 2025?
If prices increase, even modestly, the following people will benefit from buying sooner than later:
- Upsizing: If you want to get into a larger home or a more expensive neighbourhood, now’s the time. If prices go up five percent next year, which is feasible IMO, It’s reasonable to think you will save $15,000 to $35,000 on average homes across the GTA and surrounding areas–more if you’ve got deeper pockets.
- First-Time Buyers: If you’re on the fence about when to buy, get off the fence now. Screw it, just do it, says Richard Branson, and it couldn’t be more relative in real estate for first-time buyers than it is now. Don’t bother saving a 20% downpayment to avoid insurance. The perceived savings will be eaten up by increased prices. In some cases, you may even be priced out of the market. Accept that this is not your forever home, and you may not be there for more than a few years. I believe we’re heading into a market where appreciation will outpace the above-average person’s ability to save.
- Investors: Similarly to first-time buyers, your money will go further today than in six or three months. Let’s go!
Who Shouldn’t Sell Their Real Estate?
- Downsizers: Hold onto your nest egg a little bit longer. It’s reasonable to think that your home will be worth more in February than it is today, so why not hold out for an extra $10,000 to $30,000? Also, if you’re purchasing a smaller home, not only will your home become more valuable, it’s appreciation will likely outpace the smaller property.
- Investors: I know it’s expensive to carry your real estate investments right now, but it’s not the time to cash in, THAT time is just around the corner. The only exception being if you have other opportunities that make sense to capitalize on sooner than later.
If my predictions are right, we’ll see a modest but steady increase in values, which from week to week and house to house could be substantial, but on average, reasonable. And multiple offers will be more common, so prepare yourself for a shift, and make sure that you’re working with a great REALTOR® who can navigate the process on route to a successful purchase and sale.
Quick Tips
- Remember that an asking price is just that. Anyone can price their home at whatever they want. It does not necessarily have a correlation to what it will sell for.
- Know the actual value of the property before making an offer. That means having a well-educated realtor who understands the market in your corner.
- Consider offering shorter condition timeframes, such as a property inspection that concludes in a day and having a solid mortgage approval in place before shopping.
- If you’re competing against other offers with no conditions, you may have to put in a higher bid than other offers. Sometimes the accepted offer isn’t the one with the highest price; it’s the one with the best terms and conditions for the seller.
- When many buyers cannot fulfill their financing needs, having no condition on financing puts you in a great position right now. Consider providing a solid mortgage approval letter from the bank.
If you’re looking for more real estate advice, check out our youtube channel for a weekly Real Estate Podcast episode or reach out to one of our real estate agents for a discussion, even if you’re in the very early stages of buying or selling.
