June 24, 2022

BIG PICTURE

Recently, I’ve given up watching the news and reading most newspapers. And before you think it, I’m not some conspiracy theorist going on about fake news and the pending zombie apocalypse.

I believe in journalism, and after 6 years of weekly posts for this blog, I can fully appreciate the effort it takes to produce timely and relevant content. In my opinion, the endless news cycles and intense competition for eyeballs means that most headlines and articles have to be sensational and intense in order to get your attention in the first place. As they say in the news business, if it bleeds, it leads.

The news surrounding the economy and the real estate market in particular is pretty bloody these days. If you just caught the headlines and the soundbites, you’d think the housing market was in a massive meltdown and that interest rates would soon exceed credit card rates.

Let’s get real.

Like any market, the real estate market has peaks and valleys – yet over time, the overall value continues to increase. Market conditions are shifting. We've written on that extensively over the past few weeks. Interest rates are going up, too. There is no question that these changes have had a direct and immediate impact on what home sellers are getting when they sell today, and what buyers can afford as interest rates impact monthly payments and affordability. The important piece is that market conditions are not as extreme as some in the media might proclaim.

What I find interesting about the hysteria in the real estate market is that it is usually grounded in short-term thinking and the assumption that there is impending doom.

The hot market we’ve just experienced was driven by the fear of missing out, that prices will never stop rising and inventory levels will never increase… you saw the headlines and the photos!

In a shifting market like today's, the fear is based on rising interest rates making homes even more unaffordable. The challenge with this negativity and fear is that it’s usually based upon a single factor, and doesn’t take a holistic approach. Rarely is one factor – interest rates or inventory levels – the singular influence on a market. People can and will always find an excuse not to take action. I challenge you to find someone that will admit to having made the right decision by sitting on the sidelines.

Life doesn’t reward indecision.

People move for all kinds of reasons. Growing families, divorce, new jobs, and increased savings are just a few of the reasons people will move up and down the property ladder. Sometimes these moves are part of a long-term plan, but often they are unpredictable and generally don’t allow the luxury of waiting for ideal market conditions.

Buying or selling real estate is not a short-term decision – so that decision should not be based upon short-term thinking, like isolating one factor in a complex environment.

Focus tightly and you’ll see the peaks and valleys in any market. Expand your horizon over a longer time period and the inevitable gradual rise in values will be obvious.

The number one piece of advice we give our clients is: stop trying to time the market. Get clear on your current needs and your long-term goals, and when you find the perfect home for you and your family, the timing will be obvious.

Don’t forget this is the Tour de Guelph weekend! I’ll be in Ottawa for my son’s convocation from Carleton University, so I got my 110km ride in last weekend. Ride if you can and support the Hospital and Rotary charities.