Hi *|FNAME|*,
January has come and gone, and the market has not shown any signs of slowing down. For the fifth month in a row January 2021 broke all previous records for total number of sales in any January with 72% more sales than the 10 year average for the month; that is 28% higher than the previous record in January 2016.
The continued imbalance of the number of homes for sale compared to buyers ready to buy is still the main factor in the increased level of activity that we have seen lately. There are several reasons as to why this is likely the case, many of which we have discussed in the past months.
Buyers are being motivated by historically low interest rates, and a recent shift in lifestyle with much more time spent at home due to the pandemic. Speaking of the pandemic, I believe that is also playing a very large role in the ratio of buyers to sellers. Now that social distancing has become somewhat of a “normal thing” for us, most buyers feel as comfortable going through someone else’s home as they would going to the grocery store, so it appears that the pandemic is having very little effect on the total number of buyers. Sellers on the other hand are also adjust to the new “Social Norms”, which means that you are not often inviting people into your home for social visits, let alone allowing a parade of buyers all of whom are complete strangers to the seller through their home. Through my own conversations with many of my clients and colleagues this seems to be the main reason why many would be sellers are not putting their homes up for sale.
Throughout January we saw a huge surge in new buyer activity about half way through the month. This combined with 30% fewer homes for sale compared to the 10 year average have caused a huge price spike with some homes getting as many 40 or 50 offers with less than 1 week on the market. It can be an extremely frustrating situation for buyers as what would have been considered a very strong offer less than a month ago is now being outbid by over 20% in some cases in my own experience.
It is difficult to predict what will happen in the next several months, but it does not look as if things will be slowing down anytime soon. I don’t think the market can sustain the kind of price jumps we saw on detached homes in the last 2 weeks of January for a long time, so if the trend continues to increase prices sharply, I suspect that the market will correct at some point, the question is when will this happen?
With less homes for sale than we have buyers the market will likely continue to increase until many potential buyers simply can no longer afford anything and we will then see prices stagnate for a while before coming back down to a reasonable amount. I do not believe that they will dip down lower than December 2020 prices at any point, but it really depends on how long this current surge upwards continues. The sharply increasing prices is prevalent in detached homes, and is beginning to be felt in townhomes as well, while condos remain relatively stable, though I am beginning to see more buyers starting to look at condos now and I would not be surprised if condo prices follow the trend.
So, is now a good time to buy a home? It really depends on what you are looking for. If your goal is a detached home in North Delta, Surrey or Langley, you will almost certainly be competing with several buyers for that home. If you are looking for a townhouse, there is still competition, but about half the amount of competition as detached homes. Condos are still a reasonable market at this point to take a look at, so if your plan is to get in a condo, the sooner you take action, likely the better you will be.
If you are thinking of selling your detached home and downsizing or moving out of town, now is a great time to do so. Detached home prices are higher than they have ever been and are continuing to increase daily. With proper safety protocols in place, we can work to limit the number of potential buyers coming through your home to minimize risk as much as possible.
If you have had any thoughts about making a move in the next year, be sure to get in touch sooner than later!
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