BuyingFinancialMarket Updates April 23, 2021

The Current Price of Lumber & Its Effect on the Real Estate Market

The coronavirus pandemic has caused problems with supply in just about every industry, not just lumber. Last summer, we saw a shortage in everything recreational, from ATVs to RV’s, batteries, and patio cushions. The computer industry is still trying to meet the demand of new home office and gaming PC needs, and doesn’t show signs of stopping. And if you’ve been considering any home renovations or woodworking project, you’re likely no stranger to the skyrocketing prices of lumber due to the higher demand. But how has this shortage of lumber affected home prices?

Home Improvements Leading to Short Supply of Lumber

When the COVID-19 pandemic hit, forced lockdowns resulted in closed lumber mills. Then those in lockdown started making improvements to their houses and backyards, as they looked forward to a summer stuck at home. Decks and fences were being built in record numbers as people renovated to accommodate their new work-from-home/stay-at-home lifestyles, swiftly leaving lumber mills in short supply and scrambling to catch up, leading to an increase in prices.

If you’re considering a backyard facelift this spring or summer, you can expect to pay as much as double pre-pandemic lumber pricing. And if you need to contract your work out, there again, you’ll likely pay even more, as contractors are straining to keep up with workloads.

The Shift to a Seller’s Market

If you’ve been paying attention to the real estate market in Saskatoon, you’ve no doubt noticed the shift to a seller’s market. The shortage of homes for sale has caused desperation in buyers who need to buy for many reasons. Perhaps they just sold their home to take advantage of rising prices. Or maybe low interest rates took them from being unable to afford a home to desperate to find one before their locked-in rates expire.

Whatever the reason, REALTORS®, like myself, are seeing more and more bidding wars and offering scenarios where the sellers have the upper hand. Buyers are offering at or above asking prices, causing prices to increase in every market across Canada, including Saskatoon.

The Cost of Lumber & Rising Home Prices

So how, you ask, does the cost of lumber indirectly affect rising home prices? Before COVID-19 hit, 1,000 board feet of 2’ x 4′ lengths cost approximately $550. As it stands now, that same amount costs more than $1,400. Now, take a typical 2,500 sq ft home, add in those rising lumber prices, and you are adding as much as $30K to the cost of building a new house!

Now, let’s consider a homebuyer weighing their options to build new or buy an existing home. With a new build home costing approximately $30,000 more now than it did before the COVID-19 pandemic, many are deciding to forgo building new and begin looking for an existing home for sale instead.

As we are in a seller’s market, there are not many available homes, especially in the most popular price ranges. But let’s say that they do manage to find one they would like to purchase. The scarcity of inventory right now has buyers right changing offer prices. There is no time to offer low and see what the counteroffer might be. In this market, the house will likely be sold to another buyer quite quickly. So they don’t take any chances and offer at or above asking, which is likely still a better deal than the new build they were considering.

From what we thought was a simple, short-term inventory issue to now a national crisi of rising real estate costs, this is how lumber prices affect the current home prices. So what can you do to best protect yourself as a buyer? Well, especially in a seller’s market, it is crucial to work with a local real estate professional who understands what is happening in today’s market—and that’s where I can help. Contact me today and let’s get your journey of buying a house off on the right foot today!

Market UpdatesSeasonal InterestSelling May 28, 2020

5 Reasons to Sell Your Home in Summer 2020

Earlier this year, with the statistics forecasting our best year yet, no one could have imagined the impact of COVID-19 on the Saskatoon real estate market. Self-isolation and social distancing were things we had never even dreamed of and they quickly became our reality without much warning. Soon after, the market slowed dramatically, leaving both buyers and sellers worried what the future would hold.

Luckily, though, the warmer weather brought with it a sunnier outlook, and as recoveries continue to rise, so do sales. This means, if you’ve been toying with the idea of selling your home in 2020, this summer is a fantastic time to do so—and here’s why:

#1 – Awesomely Low Interest Rates

With the current economic climate in the state that it is due to COVID-19, the current interest rates for mortgages are at a record low—some even reported to be as low as 1.99% on a 5-year fixed term! Because of these low interest rates, more home buyers are entering the market equipped with more buying power than they previously could have afforded. So, if you were to list your home today, there would be more potentially interested buyers to sell to—so you could kiss those worries of never-ending relists goodbye!

#2 – Fewer Listings, Less Competition

Saskatoon, as of today, is in what we’d call a seller’s market. While more and more buyers are flocking to the market with the low interest rates, the same is not being said for new listings. This lack of inventory in the Saskatoon market means those listings that do exist are getting more action than ever before, with quite a few of them pulling in competing offers. As a seller putting your home on the market today, you can expect to see more urgency from buyers and a shorter listing period. And why not turn your dreams of a new home into a reality much quicker!

#3 – You Have A Clearer Idea of Your Wants & Needs

After months of social distancing and staying home to stay safe, I can almost guarantee that you have gotten pretty familiar with your current home. More specifically, I’d say you’ve gotten pretty familiar with what it’s missing for you and your family. This means that you’ll have a clearer idea of what you’ll be looking for in your new property, helping to narrow down your choices to make finding your dream home simpler and less like digging through the clearance rack to find a gem!

#4 – No School Means Easier Moves

Summer is traditionally one of the best times for families to move, with kids out of school and summer vacation times more readily available. Not only will you have the extra free hands to help carry the boxes, but you also won’t have to worry about disrupting their learning process or moving them out of the school district before the year is through! Plus, a move earlier in the season gives them plenty of time to explore and fall in love with your new home just as much as you have!

#5 – Summer is the Best Time for Curb Appeal

Curb appeal is the first impression that buyers get of a home. And in the winter, when everything is coated in a blanket of wet and white, it’s hard for them to get an accurate read of what the curb appeal actually is. The trees are bare, the garden is covered, and they have no idea if there’s any grass under there at all.

In the summer, though, nature is in bloom, the weather is warm, and your home can truly be seen in its best light (mostly because there is still light after buyers get off work). This helps to reinforce a buyer’s impression of the house, giving them another determining factor to help them make their decision, rather than leaving them in the mysteries of the unknown.

 

With plenty of buyers on the market, eager to get out and get moving while the water’s warm, summer 2020 is really shaping out to be a great time to be a seller. And if you’ve been questioning whether or not to get started, take this as your sign from the heavens—your time is now. And I can help! Contact me to get your free custom market evaluation today and let’s get started!

LifestyleMarket UpdatesSeasonal Interest May 14, 2020

How COVID-19 is Affecting Saskatoon Real Estate

In the season of social distancing and staying at home, COVID-19 has impacted our economy harder than I believe any of us could have ever imagined. Stocks plummeted, gas prices reminded me of my teenage years, and travel is quickly becoming more and more of a distant memory. On the other hand, though, sports and fitness companies have seen more activity than ever and toilet paper has officially become a new currency!

With so many parts of the economy impacted in vastly different ways, it’s hard to know how every market is doing. So it only makes sense that one of the most common questions I’m getting right now is about how real estate has fared throughout all of this. And, let me tell you, it’s been a bit of a rollercoaster.

COVID-19’s Impact on Saskatchewan Real Estate

While many markets across the globe have seen a drastic decrease—some even shutting down entirely—the Saskatchewan real estate market has proved remarkably more resilient. True, we did see an initial decrease in activity in the preliminary phases of the provincial shutdown, but with the Re-Open Saskatchewan Plan now officially underway, the numbers continue to improve daily.

Part of Saskatchewan’s real estate resilience came particularly from the strongest start to the spring market we’ve seen in years. The March market started off with a “BOOM”, with new listings and sales busier than they have been in a long time, leading to a 7% increase in the market. Then…there was coronavirus, which slowed everything to a crawl with all the uncertainty it brought.

While the first couple weeks of pandemic pandemonium did cause about a 46% overall decrease in April, the trend did not last for too long. As restrictions slowly began easing, so did people’s wariness to continue their home search, and in the latter weeks of April we started to see the numbers going up—a trend we’re continuing to see as we move into May!

COVID-19 & Saskatoon’s Real Estate Market

While the province as a whole saw an overall decrease of about 46%, Saskatoon’s real estate market fared slightly better. In April, listings only saw a decrease of about 36%, while sales were down 34%—and both numbers continue to improve as the province continues to ease restrictions.

I believe this largely has to do with the fantastic and extensive precautions our Saskatoon REALTORS® have been doing to keep our clients safe throughout the real estate process.

How We Keep Saskatoon Real Estate Safe During COVID-19

With the privilege of being deemed an essential service since the beginning, we REALTORS® knew we had to do as much as we could to ensure we could still serve our clients to the best of our ability in the safest ways possible. Here are just some of the ways I’ve been able to pivot to provide safe real estate throughout the coronavirus pandemic so far:

Virtual Consultations allow me to still chat with you about your real estate needs and help you best define how we should move forward to achieve them.

Email Listings make it easy for me to share new listings with you as they come to market, so you never miss an opportunity, even when you may be self-isolating.

Virtual Tours & Live Open Houses are the newest ways we can show buyers your listings without them even having to set foot in your home. We can give them the opportunity to take a socially-distant tour around the house first to decide just how serious they are before requesting an in-person visit, limiting the foot traffic in your living space.

Waivers for Both Buyers and Sellers helps us to screen both parties invested in a viewing to ensure compliance with all isolation measures in place, helping to stop the spread.

Electronic Offers, Signatures, and Contracts give you the opportunity to take care of all the essential paperwork right from the comfort of your own couch!

Flexibility in Communication. I am here for you throughout your real estate journey, physically distant or not. That’s why you can always reach me by phone, email, or text, whichever is most convenient for you!

 

With the market now on an upswing and getting busier by the day, it seems the impact of the coronavirus on Saskatoon real estate is dwindling. Which means that if you’ve been thinking of buying or selling a house this year, now might just be the time to do it! Contact me today and let’s get started on reaching your real estate goals sooner.

BuyingSelling January 23, 2020

Seller’s Market vs Buyer’s Market: What’s the Difference?

One of the most common questions I get when working with new clients, especially first time home buyers, is “what’s the difference between a buyer’s market and a seller’s market?” These terms are commonly discussed when talking about real estate and have been particularly sensationalized on television. But while you may know them and have a general understanding of what they mean, the details of what makes these markets actually are may be a little less clear. So, let’s clarify that, shall we?

What is a Seller’s Market?

A seller’s market is when there are more buyers in the market than there are homes for sale. This means the demand for housing is higher than the actual supply of homes available, so sellers are at an advantage. They know that the need is there, so they can be more liberal with their pricing. The reality is that their house is going to sell—usually very quickly—and that there’s a higher chance they will receive multiple offers, giving them more power when it comes to negotiation, so it’s an excellent time for putting your house on the market.

Usually, you can tell when we’re in a seller’s market by looking at the trend in home prices and days on the market. When prices are up and the days on the market are low, it’s a great time to be a seller.

So what causes a seller’s market? Well, the most common driver for an increase in buyer’s is usually the local economy. When there are more jobs available, that will often attract more new residents, causing a surge in home buyers. But other influences toward a seller’s market include: lower interest rates attracting buyers or sudden spikes in interest rates pushing on-the-fence buyers to buy before prices go up even more.

What is a Buyer’s Market?

A buyer’s market is when there are more homes for sale than there are buyers in the market. The more selection the limited buyers have means a higher chance properties won’t be chosen, so sellers are forced to drive their pricing down to a more attractive number that can compete with the other properties available. This also gives buyers more power in negotiation, as they can always continue their home search elsewhere, so they can really get the most bang for their buck.

Signs of a buyer’s market can also be found by looking at the market trends for home prices and days on the market. When prices are down and the days on the market are high, it’s a great time to be a buyer.

A buyer’s market can be brought on by many different influences, including interest rate trends. Higher interest rates will limit the amount that lenders will offer buyers, thereby reducing the number of people in the market. New builds can also cause property prices to drop, increasing the supply before the demand is there, as well as natural disasters.

Tips for Working in the Opposite Markets

As much as it can be helpful to know what to look for to determine the type of market that your local real estate might be in, sometimes you don’t always have the option of waiting it out for when the market shifts. Financial or time constraints can often have you working in the opposite market—it happens! But that doesn’t have to mean you’ll be entirely out of luck. Here’s how to maximize your investment, even when the market isn’t quite in your favour:

Buying in a Seller’s Market

If you find yourself in need of buying in a seller’s market, you’ll be going up against a lot of other hungry home-seekers. Here’s how to stand out in the crowd:

  • Get pre-approved. While you might be anxious to start shopping before you miss out, I can’t stress enough how important it is to get pre-approved for a mortgage first. This shows sellers that a bank has already guaranteed you the lending amount you’ll need, so they won’t have to wait as long to hand over the keys!

  • Start with a strong offer. When the pickings are slim, there’s a much higher chance that any offer you give will be going up against at least one other, so you want it to be competitive. This is where working with a buyer’s agent can be extremely helpful, as we’ll be able to guide you on which offers will be most effective against the others.

  • If you like it, don’t wait. Houses in a seller’s market don’t last long, so if you’ve fallen in love with a house for sale, move quickly and don’t be shy about it.

  • Be responsive. Always be available to answer questions from the seller or your REALTOR® so you never miss out on an opportunity.

  • Be flexible. If a seller needs more time before move-in or is asking for other conditions, be willing to work with them.

Selling in a Buyer’s Market

If you’re stuck selling in a buyer’s market, your home is going to be compared to a lot of others. Here’s how to make your home stand out:

  • Know your competition. Have a good idea of what’s selling and look for common trends that you could apply to your home to make it more attractive.
  • Make sure the price is right. Money talks and when buyers have the power, you want to be the one offering them the best deal. Get a reliable home evaluation done and keep in mind that your home is only worth what someone is willing to pay.
  • Be flexible. If a buyer wants a quick possession or other reasonable conditions, do your best to work with them.
  • Consider every offer. It’s important to remember that every offer might be the only one you’ll see for a while, so take each one seriously. This is where an expert real estate agent can be a huge help in assisting you with weighing the pros and cons to make the decision to reject or accept.

 

If you’re considering entering the market as either a buyer or a seller, it’s important to know which kind of market you’re working with. Know the signs for each and keep your eye out so you can jump in at just the right time. And if you’re worried you won’t be able to tell when the time is right, don’t be afraid to reach out! I’m always more than happy to watch the trends for you and help you make the best decision in buying or selling any time of year!