Discussing the highs and lows of the year as it draws to a close along with preparing plans of action for the next year's market are annual rituals of the Realtor. Another is attempting to forecast the Real Estate market for the coming year in so far as how it will financially enhance or impact on all of us. No one has the crystal ball (snow globe?) that can predict the next year's market with 100 % accuracy but some amongst us are better than others at reading the signs and interpreting the past and present to project on what is to come .
2008 in review
From early in 2008 a suspicion (at least amongst many Realtors) began to manifest itself that home prices which had risen with consistency for each of the previous eight years were beginning to look like they were hitting a plateau.
People moving to Barrie and continuing to work primarily in the GTA have always made up a significant portion of new buyers but prices had increased to a point where in addition to the dramatic increases in gas prices, many of these home buyers were opting to either buy a lesser home or condo within the GTA while others have stayed out of the market completely in 2008.
We also began to see an easing back on price increases for the first time since the early part of th
e "new millennium". As a result fewer existing home owners were seeing the year over year equity increases that has instilled the confidence in previous years to cash in and buy into a higher priced home now within reach. The trading up buzz was gone and people were instead sitting tight and the lure of the bigger home fell into remission.
Homes typically beyond the average 1st time buyer range ($275,000 and up) were starting to take longer to sell as a result and by early summer record numbers of listings in this price category were accumulating. With this, the shift from a seller controlled market to a buyer controlled market had taken hold. The gap between list price and final sale price on homes over $275000 was growing, further evidence that we were now into a buyer's market.
In spite of the signs, home owners were slow to accept that for the first time in a few years their home did not increase by a five figure amount over last year and in fact may have even decreased some in value over the past 12 months. It was also an adjustment period for many Realtors who got caught up in the whims of ambitious vendors and found themselves saddled with stagnant listings that languished on the market indefinitely only to expire, and often reappear under the banner of another overly anxious Realtor.
One of many examples of market denial amongst sellers this year occurred for me in a listing presentation this spring where a couple insisted on my listing their home for $25,000 more than I had determined it to be worth telling me they had talked to other agents and one of them was willing to list at the price they wanted.
I told them shopping around for a Realtor who agrees to take an over valued listing is much like shopping around for a doctor until you find one who tells you you are at your ideal weight.
It is only in the last quarter of 2008 that the realities of how the overall economy is affecting home values and sales volumes has started to take hold on the majority of Barrie area home owners.
Consumer confidence on the whole went for a slide in 2008 mainly due to uncertainly at a global level in the economy especially during this later half of 2008. We now live in an age of competing 24 hour cable news channels that have created killer bee like colonies of financial experts available to the news networks 24/7. In previous periods of economic challenge, a few minutes of the 30 minute evening news and a blurb in the morning paper kept us as aware as we needed to be on the economy. Today the constant drone of doom and gloom is hard to escape.
The good news is - good news is likely to become a marketable media commodity once again in the new year and the emergence of a fresh (and potentially intelligent) government in the US will certainly account for a major part of that mind shift.
