"Inventory levels are 17 per cent lower than levels recorded in 2012. These two factors are creating market conditions that favour the seller, causing stronger than expected price growth."
As many buyers have noted, it is getting harder and harder to get that amazing house at a great deal. There are just too many other buyers with their eyes on the daily listings to watch a gem slide by. The result is not just increased sale prices and quick turnover for some types of property but a new reality for some buyers in terms of how they prepare themselves. You must have your financing in place prior to offering. You will lose in a multiple offer situation if you are not ready to purchase. The one thing sellers can ask about is about a buyer's ability to purchase. If you are not preapproved you may lose out not just on pricing, but on the strength of your position to offer.
Also, buyers are finding they have to be realistic when it comes to home inspections. Sellers have more choices so haggling over minor issues is no longer accepted by many sellers. Of course, defects will always be raised, but the haggle over a $150 service item is now gone. This may be a great reason to check out homes under contract. You never know when a conditional sale falls apart and you will be ready to go should your dream home be again available.
From a seller's perspective, this activity is good news. But I have seen quite a few listings recently where sellers are pricing beyond the current market and not seeing the anticipated results. We are not in a period of overpricing and holding out offers for days expecting to see a dozen people lined up at the door. We are not seeing 2007 hype. We are seeing well presented, well priced homes get a lot of activity and sell quite quickly.
I've been to many showings lately where we have had to wait our turn to view a property. Does it create urgency? Yes. Do people get emotional? Yes. Are people willing to pay $40,000 over market even if they love it? Usually not when they wake up the next morning (and their bank won't like it either.)
Notable Numbers from the CREB Press Release:
The unadjusted benchmark single-family price totalled $456,900 in May, a seven per cent increase over 2012 and a one per cent increase over the previous month.
With less supply relative to demand in resale, condominium prices are on a path to recovery. In May, the benchmark price for condominium apartments totalled $263,600, a year-over-year increase of seven per cent. Condominium townhomes reached a benchmark price of $292,100, a five per cent increase over the previous year.