We’ve been looking for a house since last fall. We thought we had a lot of time and were probably a little too picky early on in our search. We passed on some nice houses for minor reasons and have come to regret it. We have tried to buy three different properties without success and are feeling frustrated. Will the market ever get better? – LOSING HOPE
DEAR HOPE: Waterloo Region has been a seller’s market for much of the past five years. That said, this winter is setting a whole new standard in terms of high prices and low inventory. The demand for real estate is far outpacing the supply, and many buyers are having a hard time even finding homes to look at.
Statistics tell the tale. Prior to 2016, the real estate board in K-W typically carried between 1200 and 1500 listings through the winter quadrant. From a buyers’ perspective, it was typically quieter than the spring market, and the relative lack of competition made it a friendlier time to shop.
But winter 2021 has shattered the mold in more ways than one. This year, our real estate market has less than half the number of listings we would typically expect in early February (there are only 283 properties listed for sale on the K-W Board as I write this), and we have many more buyers than available homes.
Inventory is like toilet paper in a pandemic.
Prior to COVID, stores had plenty of household paper in stock, and it was always available when we needed it. Then came the first wave, which sent buyers into a frenzy — and the shelves were suddenly bare. Toilet paper manufacturing continued, but it took a while for stocks to build back up, and many stores received their product just in time to sell it again.
Our local real estate market is a lot like that near-empty shelf of Cottonelle. We are blessed with a booming, stable and well-diversified economy, which has helped a growing number of buyers to “discover” Waterloo Region as a more affordable GTA alternative — and people are flocking here in droves. Builders can’t to keep up with the current demand, and new inventory is being absorbed as soon as it becomes available. Meanwhile, the flow of resale homes is at a trickle, since homeowners who don’t need to move in the dead of winter will generally put things off until spring, summer and fall, when the weather is nicer.
But there is light at the end of the tunnel. As we shift into the spring market, I fully expect inventory levels to rise. Sellers will list their homes in greater numbers, and some locals will depart for smaller towns, where a lateral move can get them a more extravagant house. I don’t foresee a return to pre-2016 conditions, when there were two-to-three-months’ worth of inventory in stock, but I do expect we’ll be better equipped to satisfy buyer demand in the near future.
PRO TIP: When competition is steep and choices are limited, buyers need to recognize an ideal home right away. If you’re currently on the hunt, keep your wish list of “top ten” features updated, since most of us tend to adjust our wants and needs as the reality of shopping sets in. Most importantly, be patient. Options will emerge with the spring market, just as they always do. #AskDavid #Advice