The pandemic created a housing market unlike anything we’ve ever seen before. Lockdowns and stay-at-home orders created not only uncertainty, but also a shift in where people wanted to live.
This included larger homes to accommodate homeschooling, gyms and home offices, and in communities that offered more greenspace. All of which resulted in a seller’s market that created inflated housing prices as people scrambled out of cities, and homeowners wanted to make a profit.
The current state of the market today looks vastly different, and after an early, but strong, spring market, by March break, everything began to change, said Peggy Hill, owner and operator of RE/MAX Hallmark Peggy Hill Group Realty in Orillia.
“We were in a very intense sellers market with very limited supply and now we have the reverse, now we have more of a buyer’s market… and homes are sitting on the market for longer than they were before…,” Hill said. “Unfortunately at this point, affordability hasn’t improved because interest rates have increased.”
Hill explains that when you compound high interest rates and high prices, you get the housing market we’re experiencing currently. She said the last time that rates were this high was in 2008 and 2009, and prices are much higher now than back then.
Currently, there’s a lot of supply on the market and the cost of a down payment is more affordable. However, Hill said it’s not about a down payment, and even if people could manage to get one together, the carrying costs per month is just unaffordable for the average person.
“For example, people that had the variable rate, say they purchased a home in the beginning of 2022, yes, housing prices were higher, however the rates were so cheap,” she said. “Now, if you’re in a variable rate, your mortgage payment would have tripled with the new interest rate.”
What buyers and sellers need to know about the current housing market
Because of the current state of the market, Hill said if you want to sell your home, there are some things you should consider. First, expect your home to sit on the market for longer than they were before because with all this supply, the days of Covid bidding wars and overnight sales are over.
“Houses are still selling but they have to be priced right and you have to adjust your expectations to reflect the current housing market,” she said. “Your house probably won’t sell the first week on the market like we were used to hearing about. Our average days on market are around 30 now, so it’s just taking longer to sell homes.”
Hill says that while this is a major shift, this isn’t an abnormal market if you compare it to previous years, “If you think back to the market after the 2017 rush, the days on market were about similar to where they are now in Orillia, at 27 days in August 2017, and 27 in August 2019.” She mentions these were both very healthy markets.
While we are in a more balanced market, Hill said proper marketing, staging and photography of your home is more important than ever so your home stands out amongst the sea of homes on the market.
That said, if you can afford the payments, Hill said this is a better market to buy a home in because people now have the time to do their due diligence such as get a home inspection, get their financing in order, as well, the prices have gone down.
In Simcoe County alone, Hill said they’ve seen a 25 per cent decrease in housing prices and they’ve had an almost 50 per cent decrease in activity since this time last year.
Supporting those in their community is always a priority for Peggy Hill and her team
Community is always important to Hill and her team, and they recognize that many are facing not only a housing crisis, but lack support in many areas as the cost of living has gone up. This is why they are always championing community initiatives and charities.
They recently donated a SaveStation AED to the Port of Orillia in partnership with Mortgage Wellness, in June, Stevenson Memorial Hospital in Alliston received a donation for their expansion, in July a portion of every sale was donated to Habitat for Humanity, in August they donated a portion of every sale to Autism Ontario, and this month will be the Canadian Cancer Society.
Hill said with housing and food insecurities, and mental health needs at an all-time high, organizations are in dire need of funding. People are angry, sad and feeling unsupported so it’s more important than ever to give back.
“Going out of your way to be kind to somebody is so important right now because you just don’t know the struggles that they’re facing,” she said. “Be kind to someone else today because you don’t know how much it could affect their world.”
Peggy Hill and her team offer real estate services from Toronto to Muskoka, so if you’re interested in buying or selling give them a call at 705-739-4455.