Canadian home sales BROKE a RECORD! But in a bad way…

2022 was a record-breaking year. But in all of the bad ways, not only all the bad ways, but all the wrong ways, we were in an environment of rapidly rising interest rates. The cost of living has absolutely soared for everyone. And guess what? Good for us.

We Broke A Record

But unfortunately, it’s not a good one that you want to break. Before I tell you what that record is, I’m going to let you get a little squeamish.

Maybe go grab one of those air sick bags if you’ve got one around the house, and we’re going to dive into it in just a sec.

What’s good, everybody? It’s Darin Germyn from the Germyn Group, where we know you’ve only got one chance to neither buy or sell your next home, so we’re here to help you get it right.

So here we go. The benchmark price in Canada for a home fell 1.6% in December. Now, while that doesn’t seem like a lot, it was from a peak to a trough of about 13.2%. 13.2%. That is a lot of money.

We are putting that into a local perspective where we have townhomes in the Surrey south Surrey Whiterock area that may be worth about $850,000. So, 13.2% equates to about $112,000 of change in value from the very peak of the market.

Now, this was a number from across Canada, but the reason that this is relevant is that this is the most significant decline on record. And unfortunately, we might be in for some more rate hikes too. And we’ll know that by next week, won’t we?

But this isn’t good news…

This isn’t a record that anybody really wanted to break unless you’re looking at getting into the market to buy a home.

Home buyers are probably rejoicing because the prices are significantly lower across Canada to purchase a home. Albeit, a lot of that gain in terms of the price being down has been offset by increased mortgage rates.

So are you really winning? Hard to say.

What Is Recession?

This leads to another question about whether we’re headed into a recession. And you probably know what a recession is, but maybe you don’t. I’m going to explain it really simply. The rule of thumb is it’s two consecutive quarters of a decline in GDP or gross domestic product. Don’t you know what that is?

Look at that. We’re still determining who will come back to the market first, whether it’s buyers or sellers. Now, I’ll talk about a rescission. It’s been talked about many times, including on this channel. And if you’re interested in learning about previous recessions or, more so, previous dips in home prices, especially locally, we did an excellent post on that right here. You can read and check it out, and see how long these previous declines lasted.

So, does it really matter if a recession is coming up or not? Well, I don’t know. What do you think? Because a recession is like looking in the rearview mirror. It tells us what happened over the past two quarters.

Home Prices Decrease, Who Will Take Advantage?

It doesn’t necessarily reflect where we’ve been living for those past two quarters. Again, with real estate values being down and the cost of living, most people agree that the economy and general living have been tricky for about the last six months. And regardless of whether some person out there tells you we’re in a recession or not, it doesn’t really matter. It’s been challenging.

So the question is, who will come back to the market first? Is it home buyers or home sellers?

Of course, we don’t want to keep breaking records in the negative way. And one of the exciting things about this market you’ve heard me talk about on this channel is the lack of available inventory coming to the market, which is making for some very unique market conditions right now. But that’s for another post there.

So, we’ve broken this record, and it’s not necessarily a great one, but I don’t want you to leave this post.

I wanted to get you that update. But I don’t want you to leave this post with the impression that it’s all bad and the sky is falling because it’s not. If you’re looking at buying a home, guess what? Homes are absolutely on sale compared to where they were just about six to nine months ago, and prices are down, then they’re down a reasonably good chunk. Albeit, as mentioned, the mortgage rates are also higher.

Is Normalization on the Horizon?

So, some of the savings you’ve gained with the prices coming down will be offset by the rising mortgage rates. But don’t get into the market because of mortgage rates. Buy the house and refinance the mortgage later. Get that mortgage under your belt and get those payments done because you’ll own it sooner than later if you get in. For anybody that owns a home, it’s not all bad news either.

In Canada, home prices are still up 33% from about three years ago. So there is a lot of equity made by many people. In the Fraser Valley Board, we’re still up about 40% over the last three years. And the good news is the declines have really started to round out over the last few months. So they aren’t free-falling like they were in the past.

This is good because when they start rounding out, that usually means that the market is already beginning to normalize. This, of course, isn’t to say that we’re done, but are we close to the end? Well, one can only hold.

So, my question to you reading this post is, what do you think? You probably own a home if you’re reading this, or you’re paying attention to buying a home because you want to buy a home.

It’s about Time You Discover the Secrets to Success in Real Estate

We made a prediction post, my good friend Steve and I, a couple of weeks back that you can find on our channel if you’re interested in reading it. And we’re usually really good with our predictions, which is awesome.

But just as a bonus, I’ve added in the description below the projections from the British Columbia Real Estate Association. That comes from their economy team. It’s their sales forecast. So check it out because you’ll get some value before I let you go.

I also promised at the start of this post that there was something that you are definitely going to want to get your hands on, and that is a new publication that we just made available called Five Secrets that the Bank Doesn’t Want You to Know.

And I’m not kidding when I say this; they don’t want you to know these things. So this publication is packed with five incredible tips on when you will get a mortgage, the questions to ask, and what you need to know. Plus, a downloadable PDF is available with it as well, so you get it right the first time.

If you’re interested in that, check out the description below. I have put the link down there, and of course, you know there is a link to my calendar as well. So if you are someone locally in my marketplace of South Surrey, Whiterock Surrey, BC, generally, and you’re looking at either buying or selling a home, you can book time in my calendar and speak directly with me.

We’ll set you off on the right foot to ensure you get the information you need to succeed!

Hey guys, thank you for reading this post and subscribing below. I look forward to seeing you at the next one.

Thanks for reading. Cheers.

BCREA sales forecast 2023- https://www.bcrea.bc.ca/wp-content/uploads/2022-11-08-forecast.pdf

Watch the full video here: