Market Update: No more bidding wars?

What you’re hearing is true. After a stunning start to 2022, we are finally seeing the market settle down. 
Between November of 2021 and February 2022 house prices in the Burlington area rose an alarming 26.5%. Not only were house prices rising faster than anyone could keep up with, but Buyers were faced with listings that were fully booked for appointments after only a day on the market. In some cases, Listing agents were reducing showing times to 15 minutes to allow for everyone to see the property before offer day. 

The inventory levels were so low and demand was so high that it seemed the frenzy may never end. But, then March came along and we started to see little signs of a possible turn… Fewer offers on offer day… Houses selling for less than 200k over the list price (which had become standard). And when the numbers came out at the end of the month we could all see what we felt had happened. The average price for a property in the city had fallen $100,000.

By April, the turn had become more apparent. Many homes were not selling at all on their offer date. Throughout the month, agents were consistently relisting properties at higher prices after failing to meet Seller expectations using a “holdback” approach. With showings dwindling and prices sliding to mid December 2021 levels, everyone was just trying to recalibrate to determine fair market value. 

So what happened? And where will the market go from here?

The most likely reason for the cooling of the market was the interest rate increases, the first in March 2022 and the second (larger one) in April. Rising interest rates means affordability (in particular for first time home buyers) goes down. 

Additionally, after months of being outbid for properties, we suspect Buyers needed a break. They were simply overwhelmed and fatigued by the whole process.

The interest rate hikes and “Buyer Fatigue” coincided with an increase in inventory levels. Consequently, we now have what appears to be a market (this month anyway) that slightly favours Buyers. This doesn’t mean there are never multiple offers on a property. That can and does still happen. But Buyers no longer have to assume this is the case across the board. They can focus their attention on properties that have been sitting. They can negotiate. They can even get conditions accepted!

That said, while prices might not be climbing as they were in the first couple months of 2022, the average price for a property in Burlington is still up 16% on April of last year. While opinions differ greatly on this topic, the fundamental supply and demand issue in our area has not vanished and you’ll find many real estate professionals who believe that what we are seeing now is simply a recalibration that will be short lived.

If you, or someone you know is considering a move this year, please don’t hesitate to reach out. There is never any obligation. We are always more than happy to talk about the market in general or advise on individual situations more specifically. 

We look forward to hearing from you,
Erin, Julie and Kim