Economic Uncertainty

My concern at this particular point in time is the economic uncertainty that has been created by the recent crisis in the USA, and prior to that in Europe. Back in the later part of 2007 and through 2008 we were just starting to move into a brutal global economic downturn. It would seem the outlook at the time was that the crisis was a short term issue and we would get over it in short order. The reality of it was that we were heading into a global recession. In October of 2008, the "sub-prime" issue was brought to a head south of the border and that really affected what was going on in our market until mid-2009. With that happening only three years ago, I believe we are all a bit jumpy with all that is going on around us and that is one of the reasons we have been seeing such low sales numbers for the past year.

Many are - once again - in a "wait and see" headspace. Whether that is warranted or not is up for debate, however, it may essentially lead to a self propelling prophecy.

Having said all of that, I do believe real estate needs to be listed to sell, there is little room to "feel out" the market. A current analysis of a specific property will recommend a certain price range (for example, a range between $448k and $465k would be an appropriate value) With the current uncertainty in the market and our economic outlook, I believe the best line of offence is to be placed as close to the proposed "end result" as possible. If we feel the home in the example above will most probably sell for $456,500, placing the listing price as close to that final sales figure would be appropriate.

I do believe we are going to see a trend to lower prices, meaning many that are overpriced when they first list will be playing "catch up" in trying to find that magic number that will sell their home. Essentially, when we are trying to catch up in a downward market, there is a great possibility that one will lose potential equity gains the longer they take to react to the market. The best strategy is to be proactive, and not reactive.

The current economic crisis may pass quickly, but I certainly would not put all my chips on that scenario. If you truly want to move forward and sell your home this year, being aggressive now would be your best strategy. I would be extremely surprised if we do not see fall out for the rest of the year in the real estate market - as well as most other markets - with the economic mess we are in the midst of. We will eventually get through all of this and our market will correct, the question is… when? I think many will have to bunker down for a few years…

If you would like to discuss your own real estate goals and needs, I would be happy to address any of your specific questions or concerns and assist you in putting together your own real estate strategies.