Buying a house may be the biggest investment people make. So, is it surprising then, with the uncertainty of 2020, the global pandemic has only had a positive impact on Guelph’s real estate market – especially for sellers. What was already a strong market in 2019 was only amplified going through 2020. If early indications stay true, it may be even stronger in 2021 according to local real estate professional, Hudson Smith.
“I think many of the reasons we thought the market would slow down are the very reasons it got stronger,” said Hudson Smith, 16 year Guelph realtor.
According to Hudson, there are three primary reasons for the ongoing strength of the real estate market in Guelph and surrounding area.
1) Historically low interest rates
“Rates are at record lows,” said Smith. “There has never been a better time to borrow money. The low rates really help people in deciding what they can afford. You’re borrowing right now with many rates under two percent.” Smith said the low mortgage rates mean buyers hoping to get into the market are more comfortable taking on large mortgages at those rates.
2) A captive audience thanks to COVID-19
Hudson says he’s always believed that people make most of their major real estate decisions after spending lengthy periods of time at home, especially in the two weeks after Labour Day and the period marked by various holiday celebrations in December. “The reason for this is, people have spent time at home and have identified everything they want to change in their house or living environment,” he said. Given the realities of ongoing lockdowns and social distancing requirements caused by COVID-19, Hudson says real estate agents are dealing with clients who have nothing but time to focus on their real estate goals and changes they want to make about where and how they live.
“COVID has certainly given us a concentrated audience. People have been forced to spend more time than they may want at home. Also, no one’s leaving the house. Clients used to tell me they were flying to Mexico on vacation and would call me when they got back. That doesn’t happen anymore. They’re not even going out to dinner with friends.”
3) Flexible employment situations
In more and more businesses, employers are adjusting to the realities of COVID-19 and giving people the ability to work from home for both the short term, and in some cases, permanently. As a result, Smith says, “it’s given families, singles and couples the opportunity to get out of tighter urban centres and buy in more affordable areas, or just in areas that they feel are better suited for their lifestyle or to raise a family.” The simple fact is, people don’t have to stay as connected to where they work as they did prior to the arrival of COVID-19.
Although the effects of the pandemic have increased property value making it more of a sellers market, it has created a very competitive environment for buyers The lack of supply has both buyers and real estate agents trying to make sense of where the market is headed in terms of prices. Compounding the issue in a market like Guelph is the fact more out of town buyers are targeting our city as the place they want to be.
“I think that Guelph was always considered an affordable option just down the highway a number of years ago,” said Hudson. “But then the secret got out that we weren’t just the next affordable city, we were an amazing community and a great place to raise your family. It seems everyone knows Guelph is just a wonderful place to live.”
Given the competitive realities of trying to buy a home in a strong seller’s market, Hudson has some advice for people hoping to buy locally or move to Guelph.
“Keep a list of your goals and try to stay objective. Too often we can get swept up in the competitiveness, and the ‘fear of missing out’ can lead to a bad decision. Think about it, in a market like this people often buy on a street that may be busier than they like, a single garage when they know they need a double, or 1 less bedroom than they think they need, just because they feel the next house won't be there. In short, they settle. Making an offer in a multiple offer scenario, the best decision you can make is on an offer where you are happy if you get the home, and happy if you lose it, too. This will always lead to good decisions that you feel secure about, and excited moving forward.”