The Loser Market - Issue 393

There’s no doubt that the 2023 real estate market has been a challenging one. In a normal, read balanced, market when a deal is done everyone walks away from the table feeling somewhat miserable yet happy as a result of everyone having to have made some sort of compromise to get the deal done.

In the 2022 market there were clear winners and losers. The lack of inventory meant that most sellers clearly came out with the advantage in the deal. Buyers, unfortunately, typically felt like they were on the losing end, just trying to get into the market, let alone have any ability to negotiate on anything.

The 2023 market had everyone feeling like they were on the losing end of the deal! This was a first in my career!

Buyers had a limited supply of homes to choose from, higher mortgage rates and the lack of consistent inventory made the home buying experience more expensive than ever and it certainly felt less than a winning experience.

Sellers were kind of trapped. Prices have retreated from the recent peak levels and if they bought after 2017 chances are they would barely break even on the sale. If you bought prior to 2017, you had gained significant equity in your property and you promptly fell into the 2023 buyer’s dilemma. For a lot of sellers, this meant the best course of action was to sit on the sidelines and try to wait the market out.

Renters who are now paying sky high rents because of the lack of suitable rental inventory as well as suffering from economic long covid. No wonder they are feeling like losers in this market.

You’d think landlords would be a happy group. Not in Ontario. The landlord Tenant Tribunal is still months behind dealing with any disputes. Rent increases haven’t kept up with inflation let alone the market, especially if your rental unit falls under rent controls which is the majority of the rental stock.

Even builders have been feeling miserable in this market with many of them scaling back production because of interest rates, and material costs that have risen at multiples of inflation. Like many of our sellers, builders have been scaling back production waiting for the market to normalize.

Now the irony of this “loser” market is that these are the conditions so many of our clients have said they are waiting for.

Opportunity!

When the market is in turmoil is when opportunities surface.

Historically some of the biggest gains in real estate and wealth creation have come from markets like this one.

Will 2024 be your time to jump off the sidelines and take advantage?

Enjoy the New Year Weekend. We’re back next Friday with our 2024 predictions.

Paul Fitzpatrick

Appointment Calendar: https://calendly.com/homegrouprealty

Want to search for opportunities in your area?

Search for Homes Here