Navigating Real Estate Peaks and Valleys with Confidence

Fear is not new. Whether you're buying your first home in Guelph, selling a long-loved property, or investing for the future, fear often plays a significant role in the decisions we make. But here's the thing I’ve learned over my 38 years in the real estate industry- while fear is natural, it doesn’t have to control you. Markets fluctuate, tariffs come and go, and economic challenges arise, yet the long-term resilience of the real estate market is undeniable.

When you step back and look at over 50 years of real estate trends, there’s a clear pattern. Every market peak that seemed insurmountable has been surpassed, and every valley that felt intimidating has led to long-term growth. The Guelph housing market, much like other vibrant communities, has weathered its share of ups and downs but it remains a strong and stable investment for buyers, sellers, and investors alike.

I’ve been through some very interesting markets over the years. The most scary time in my opinion was early in my career during the 1990s. I had just started in the real estate business when the recession hit and pretty much overnight killed the market.

During the 1990s, the Canadian real estate market was a train wreck!

Starting with The Bank of Canada which increased interest rates significantly, peaking at over 14.75% in 1990 and contributing to a decline in housing demand and prices. By the mid-1990s, interest rates began to decrease but this did not immediately reverse the housing market downturn because there was still such a high level of economic uncertainty and lack of consumer confidence.

Unemployment in Ontario surged from 4% to 11% between mid-1990 and mid-1991which kept consumer confidence low. People were hesitant to make large financial commitments like home purchases during this period. A lack of confidence in job security further stifled demand for housing, even as interest rates began to decline later in the decade. Yet houses were still bought and sold.

The final contributing factor was a huge oversupply of homes. Builders had ramped up construction during the late-1980s housing boom, resulting in a surplus of homes when demand collapsed during the recession. We literally had 12 very motivated sellers for every buyer out there. This was our version of what the US went through in 2007.

Now look at the above through the lens of today.

Interest rates have spiked and have been trending down for the past 6 months and all indications are that this trend will continue (for those of you that want to see the 2% rates back, you may get your wish). The downside is that those rates were the result of a sudden hit to the economy by the pandemic. We may have another sudden hit to our economy with the tariff war. The upside on this is that the massive number of mortgages coming up for renewal in the next 12 months may find the rates have come down significantly and are now more affordable. A big fear in 2024 was that these renewals would result in a massive number of people not being able to afford their homes. This fear has been tempered somewhat for the time being.

The last few months of Trump have certainly helped spike economic uncertainty and drown consumer confidence. If we have heard one consistent theme from our clients, it’s been uncertainty and confidence in the economy is approaching new lows. If the tariffs take effect, there will no doubt be an impact on employment rates and job security. There will be short term pain for the economy- both nationally and locally.

Oversupply from a building boom exists in the high rise condo market, particularly in the large urban markets like Toronto and Vancouver. Builders have been far more conservative these past few years and let’s not forget that our current housing stock has not kept pace with our population growth.

We can treat this fear as existential and panic, or we can own our fears and figure out how to survive and hold on through this time period, because at the end of this latest crisis there will be new economic growth. There will be a return to the long-term growth in the housing market.

From 1990- 1997 the national average resale price increased by about 8%, from $142,091 to $154,768. This translates to an average annual increase of approximately 0.8%. According to the Canadian Real Estate Association (CREA) the average house price from the late 1990s has grown at an annual rate of 6.3% to $827,100 by December 2023. If you bought during the 1990s and hung on, your economic future was much brighter than those that sat on the sidelines and avoided the housing market.

The Key to Real Estate Success? Playing the Long Game.

One of the greatest lessons I’ve learned in my decades of experience is that time is your ally in real estate. Markets are living, breathing entities with peaks and valleys and patience rewards those who make informed, long-term decisions. If you are currently in the market, have reasonable job security and most importantly can afford your mortgage, hang in there. This storm will pass!

For Buyers: If you're buying your first home, consider the next five years instead of getting lost in short-term fears. Real estate isn’t just a purchase; it’s an investment in your future stability. This isn’t the time to be looking for your “forever” home. This is about getting into the market and using the ensuing years to climb the property ladder to get to that forever home.
For Sellers: The Guelph real estate market remains a place where homes hold their value. Selling amid uncertainty can still yield excellent outcomes with the right strategy. Over the long term our local real estate market has not been as volatile as the neighbouring communities. Less peaks and valleys means less stress over time.
For Investors: Real estate continues to be one of the most resilient investments you can make. By focusing on key neighbourhoods and long-term growth potential, you can thrive even in changing markets. We’re a university town which means there’s constant demand for rental housing. Universities and Colleges are in the education business and will not be able to accommodate all the students on campus.

How Keller Williams Home Group Realty Can Make a Difference

Our advantage lies in understanding not just the data, but the people. Real estate isn’t just about buying and selling properties; it’s about helping people achieve their dreams, build wealth, and feel at home. With over 35 years of local expertise, we’ve developed strategies to guide our clients through all kinds of market conditions. From explaining the complexities of tariffs to providing expert advice on when and where to buy or sell, we’re committed to serving Guelph residents with integrity and trust.

Fear can dominate decisions, but it can also be used as a tool for thoughtful reflection and smarter choices. Whether you're navigating the unpredictability of tariffs, analyzing potential investments, or choosing the right moment to sell, remember that no valley lasts forever.

At Keller Williams Home Group Realty, we’re not just here to facilitate transactions; we’re here to guide you through the real estate process with clarity and confidence. Whether you're a first-time buyer, a seasoned investor, or someone looking to sell, our experience and community commitment ensure you'll have the support you need every step of the way.

Thanks for reading and being part of our community.

Paul

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

Want to search for opportunities in your area?

Search for Homes Here

LISTING OF THE WEEK

02-34 Douglas Crescent, Cambridge, ON N1R 6B8-12.jpg

09-34 Douglas Crescent, Cambridge, ON N1R 6B8-19.jpg

34 Douglas Crescent, Cambridge

$799,000

Detached 5-Level Backsplit
3 + 1 Bedrooms
2 Full Baths
1,739 Above Grade Sqft
11 Parking Spaces

Welcome Home!
This fabulous, HUGE FIVE-LEVEL backsplit offers over 2,700 sq. ft. of living space, pretty stone curb appeal, and is thoughtfully laid out across multiple levels to provide incredible versatility. Whether you're a growing family, navigating a multigenerational living arrangement, or looking for a significant mortgage helper, this home is a perfect fit. With 4 bedrooms, 2 bathrooms, 2 kitchens, 2 living rooms, and a bonus family room, and games room in the lower basement. This lovely home just keeps going and going! Situated in a desirable East Cambridge neighbourhood, on a quiet court, with private fenced backyard and a driveway big enough for the kids to play on. You'll love the proximity to schools, parks, the Grand River, shops, restaurants, and so much more. Outside, you'll find ample parking, plus an oversized 1.5-car garage with dedicated workshop space ideal for hobbies or storage, or can be converted to double car garage. The double wide, extra long driveway allows for parking for 10 vehicles!

Listing Courtesy of Keller Williams Home Group Realty Brokerage

Learn more