It’s been a bit of an odd year in the Guelph real estate market. We started off with a whimper and, for the first time in years, the investor Buyer season was basically a complete dud. The March rush… also almost non-existent, and probably most namely due to a seemingly-endless winter, capped off by a crazy Spring ice storm. All in all – a bit ‘off.’
It’s hard, coming off of a year like 2017, when – at least for the first half of the year – it felt like the Wild Wild West for Sellers. Everything was selling – even the stuff that probably shouldn’t have, or at least shouldn’t have for a premium. Mortgage rule changes were announced, Buyer remorse kicked in… the second half of the year was tough, to say the least.
And now? Well, for me the toughest price point when it comes to listing and selling a home in Guelph falls in the in-between detached resale homes. They’re not first-time Buyer homes, typically. But they’re not quite in that luxury territory, either. I’m talking about detached homes for sale in the $600,000 to $800,000 range.
What’s going on? Well… they’re just, for the most part, not really selling.
It’s a tough price point, and I will give you five quick reasons why:
- There’s actually quite a lot of inventory, relatively speaking, in this price range. Buyers have options.
- Those Buyers? Their expectations are high. They aren’t just trying to ‘get into the market.’ They’re looking to ‘buy up,’ and they want to get it right.
- Prices are high – honestly, too high, in many cases. This isn’t a year ago today. We’re in the midst of a market correction; in fact, a pretty significant one.
- In-migration from the GTA is down. It seemed like “everyone” buying a house in Guelph – especially in the South and West ends – last year was from out of the area. Not happening this time around.
- Mortgage rules and the stress test have impacted second-home Buyers and their purchasing power and ability to get approvals are diminished.
But, don’t worry – be happy!
We can focus on how unfair it is that your neighbours maybe sold for more last year than you will this year – and, of course, no one wants to hear that. But I have a message for you: Unless you bought your home in the midst of last year’s frenzy, and need to turn around and sell it today… you’ll be okay. More than okay.
Historically, you’re still making some of the best equity gains, over the course of a number of years, than you likely ever imagined when you bought your home. You can and will still sell your home and make terrific equity gains.
But, in market conditions like this, here is what is required:
Full Staging. If your Realtor walks through your house and says it’s great as-is and don’t do anything… let’s get a sign on the yard and sell this baby… run. Do not walk: run. Just – no. In the last 90 days, I have sold homes ranging from $399,900 to close to $1.6M. All have benefitted from Staging. This is no longer an ‘add on’ service – or shouldn’t be. We have a tough market and even tougher Buyer expectations. Stage it, if you want to sell it.
Get Real on Price. We are in a corrected market, and here’s the news for those in this mid-range $600,000 to $800,000 mark… we are very, very close to being in a Buyer’s Market. Sale-to-List ratio is down to numbers we have not seen in years. Inventory is up. So are Days on Market – especially when we factor in the number of cancelled and re-listed homes, which may ‘look’ like they sold in 20 days, but in actuality took more like 120 days. Again – be happy. Could you have made more last year? Maybe. That was then; this is now. With rare exceptions, Sellers are still walking away from their home sales with terrific gains in their pockets.
Market Like Crazy. This is key. Everyone complained last year about how Realtors must love just making easy money when homes ‘sold themselves.’ There was some truth to that – also a lot of non-truth. A blog post for another day…. Again, that was then. Today, Realtors need to truly up their game. Professional imagery, high-impact visuals, video – and no, I don’t mean a stitched-together series of photos (lame!) – I mean professional video, maybe even using a drone if warranted. Huge online advertising and social media outreach is a must. Honestly just… market a home. Market a home that is presented well and priced fairly and, even in this ‘dead zone’ of 600/800 homes – it will sell.
What’s to come in the next chapter in Guelph real estate? My predictions are that we are going to enter a season in which a lot of homes get re-listed. Sellers, having been led to believe that the market is flourishing and their home will sell itself, will wise up, and fire their Agents.
Next up, more price corrections. “Nothing is moving in the $650,000 range,” I hear people saying. To which I think… because it’s overpriced and under-marketed. Was it worth that last year? Yep. That was then, this is now. Try to remember what you paid for the house, and – when you did- if you ever imagined you’d walk away with the kind of cash in hand that would come from a “low-ball” offer today. It’s still an amazing return on your investment. Be happy.
Lastly, and a bit of a segue, but I think many people looking to ‘sell up’ and get more space are going to have to think seriously about the merits of paying to move and get a bit more space, vs. stay put and make purposeful renovations to add functionality or increase square footage of their existing homes. For those Selling in that ‘second or third home’ realm, you’re not just competing with other, similar houses – you’re probably also competing with Buyers who own homes and might just opt to stay put and build up/out/down, etc.
It’s a tough market, at least in that $600-$800k range, but take heart. We’re still considered one of the best places in Canada to live and to invest. Odds are, you’ll sell and do well on your home – with the right approach and with expectations that are in line with current market conditions.