Episode 22 - What should London, Ontario real estate buyers and sellers think about this fall?

Are you curious to see what my general advice is for my buyers and sellers right now in the London, Ontario real estate market?  Tune in to get the inside scoop from a local real estate agent this fall of 2022. 

If you are thinking about buying or selling a home or condo in London, Ontario and area, please feel free to reach out to Phil with any questions at any time via email or by text (226-977-2348).  Always here to help with your real estate questions.

Learn more about London real estate from Phil and search local listings here - www.philbailey.ca

Phil Bailey is a Sales Representative with HouseSigma Inc. Brokerage in London, Ontario, Canada.

Disclaimer - This podcast should not be taken for any legal or professional advice and is just my opinion based on working as a real estate agent in London, Ontario, and area.  I always recommend speaking to professionals about your specific situation before making any big decisions.

Transcript

Speaker 1: 0:00

Hey friends, Phil Bailey here from the London Ontario Real Estate Podcast. We're on episode 22 of the podcast. If you're curious on what, uh, listing agents and buyers agents are thinking about right now in London, stay tuned in the episode and I'll tell y'all about it. I know it's been a little while since we last did a podcast episode. So things have changed in the market quite substantially. In 2022, we went from what I would consider an extreme seller's market to now much more of a balanced or even buyer's market. Some people will say, this guy is falling, but if you look at the average prices over the last little while, things do seem to be evening out a little bit. But that said, uh, showing activity, uh, when I am listing properties is down substantially over what, what it was in January and February. So, firstly, let me talk about what we're doing with listings right now in London. I'd say about half my business is listings and half my business is buyers. So I think I have a bit of a unique perspective on this. Uh, compared to some other agents in the market in London, when the, when we're listing right now, we're definitely doing everything we should have done before when the market was hot. We're doing good marketing, we're taking good photos, good video, doing all the same things. The difference and the big difference right now is pricing needs to be closer to what you actually want to get for the house. In my perspective, there's obviously different ways to price, but in January and February, almost always, we were listing at a certain price holding offers, getting multiple offers and trying to drive that price up as much as we possibly could for the clients that hired us, which were our sellers. In addition to that, when I'm talking to clients right now that are selling properties, I have to talk about one measure, and that's called days on Market. We've seen days on market rise all year round here really since I'd say about February. I look at March as really the transition month that we saw in London, uh, but days on market really rose substantially, and now I'm starting to see it maybe even off. So I think on average, like average wise right now, we're probably in the low 20 days on market. If you look at overall stats for the whole city, I'm usually saying expect your house to be there for, you know, a month. If you price correctly, if you want to swing for the fences, what you did in January and February, you're gonna have some big disappointment, uh, to deal with. And I, I wouldn't recommend doing that. I would really recommend pricing close to where you want to be. Open yourself up for maybe some negotiation. Understand that you're gonna be dealing with conditions on almost every single offer. Uh, and just be ready for that because you do not want to be thinking that multiple offers are the norm, cuz they're just simply not anymore. You probably are gonna be dealing with one or two buyers that really want to buy the property that you have, depending on where you're pricing it. So that would be my recommendation on the listing side and, and obviously showing activity has been down substantially. I think there's a few factors for this, but I, I definitely don't have a crystal ball to see where things are going. So don't, uh, don't blame me for this, but one of the things I am noticing is that really interest rates have impacted things for sure. Affordability, when I talk to mortgage brokers in town, I mean, affordability of clients has just gone down substantially. So when someone was able to afford say, a$600,000 house, that same person now maybe is at, I dunno, 500,000. That makes a huge difference to what is selling and what prices they're selling at. In addition to that, I think with the pandemic being on its way out, um, or really not something we're thinking about as much anymore, I think that that has had, had a huge impact on making people want to make decisions very quickly when it came to buying. And there was a lot of pent up demand, uh, from even a lot of places outside of London to be able to move to London. So work from home arrangements changed. Uh, people were able to, uh, maybe retire, uh, and move to London and sell their properties. Uh, but what I saw with the pandemic in particular is that people just wanted to spend more time at home. So they really made a huge effort to be able to purchase homes and get into the market when they could. Obviously now I think things have shifted. I know some people are definitely back in the office. I'm not seeing the same demand from the GTA that I was before. Uh, but there definitely is some agents that are still, uh, working around that. That said, overall, you know, I am a real estate agent. I'm very biased here, but you know, I purchased a house this year, so just so you understand, I've been in this with the rest of you. I'm not just sitting on my hands. Uh, what I think is really important here to note is that I think London's in a very unique position overall. London, Ontario, we're very close to Toronto. We have that behemoth of Toronto that has money that's definitely going in in, in putting their money into the London market. When you look at price comparisons, it's not even really a question. Uh, we also have a lot of unique opportunities for real estate investors in London. So when we're listing properties, we have to pay attention to that. We have obviously a lot of doctors in town. We have a lot of nurses in town that need to work in our hospitals. We also have two large post-secondary institutions with Western and Shaw being right there and close by. What's interesting on the listing side is that for my investor clients, even with interest rates up, I'm seeing a substantial increase in the rents in London right now. I know that this is a huge inflationary, uh, thing that's happening right now in the area, but we're talking substantial difference in, in rent prices going from paying, you know,$1,300 for a two bedroom apartment to now struggling to find a one bedroom for under say 1800, 2000. Um, we're having, if you're in a, a lease right now and you're going month to month and your owner and your the owner of the property can move in, sometimes they're doing that and I'm seeing that happening a lot. Um, not seeing, I agree with it, but you know, it, it is becoming a major, major issue. So when we're looking at the investor side, you're seeing lower prices. Obviously there's more of a payment though for that lower price sometimes because of the interest rate going up, but the way that the price have fallen, the interest rates haven't made up for the difference in my, in my opinion because you're not dealing with multiple offers anymore. Um, so if you're able to buy, say a home that was listed at 500,000, you buy it for 500,000. Even with interest rates being higher, that's substantially different than the same house, you know, that I was selling for say 700,$800,000 back in January. So that brings me to what I wanted to talk about on the buyer side as well. So when I'm a buyer's agent right now, I'm really giving some very clear advice to my clients. Make sure that you understand that there's inventory on the market so we want to be able to view that inventory and shop around a little bit. The best client right now that I'm able to work for and get the best deal for has a couple options of homes that they would consider. They will try an offer on the one if it doesn't work out, we're trying another one a couple days later, maybe even maybe even this the day after. I wouldn't recommend putting two offers on the same on different properties by the way, cuz that is can be a little, uh, tough if you get both of them. Um, but what I would say is act quickly if you can find some options that work for either your investment or for your family. I know real estate is always has an investor view to pretty much everyone I talk to. Um, but there's also just people that, you know, they need a place for their family. So if you're looking for somewhere to live in town, I would definitely take a look right now because of the inventory being so drastically high. Other point I'm saying right now is, and again, I bought a house this year, so you know, you can, you can say, oh I'm, I'm definitely biased and I am cuz I'm a real estate agent. Um, but I agree with what I'm saying. And if I wasn't real estate agent tomorrow, I would hire a real estate agent. Um, so what what is interesting on the buyer side right now is that I think a lot of people are, are worried because the market obviously has had such a shift in London, uh, but they're trying to time the, the market at the very, very, very bottom. And just like almost every investor that I talk to that invests in stocks and the general market will tell you most of the time, you're not gonna be able to time the bottom completely. My suggestion is to find a couple options, like I said, and make an offer that you think is fair based on what we're seeing with happening in the market. Now, when I'm working with buyers, I'm looking at comparables just like we always have. It was very difficult to look at comparables when the market was going up as much as it was<laugh>, but we also had to look at short-term data. So you know that now that I'm a House Sigma in London, I think that one of the biggest reasons, and I talked about it previously on the podcast that I wanted to work with House Sigma, is because they're so data driven in everything they do, they give you so much tools and they treat you like, you know, you are, you're, you're an adult and you can make your own decisions. Um, and then of course the real estate agent is there to guide you through that process. So, you know, we're giving you the data, we're helping you guide through that process. And what I've found with the data right now is that if I go back six months and look at comparables, it's not really a fair comparison what I need to be looking at, and it makes my job a little bit more difficult for sure, because I need to look at comparables that have happened in the last, say, 30 days, 60 days. If I'm looking at comparables from six months ago, I'm, I think I'm really doing my buyer clients a disservice and I'm doing my seller clients a disservice too because those, those numbers are just not around right now, and we're not expecting multiple offers on most properties that we're listing. So when you're a buyer right now, again, the advice that I would have is check out the inventory that's on the market, find options, make sure you get your criteria right from the start, which is something I've been telling my clients forever. Get that criteria right from the start and then when you find something that works, make a decision on it, see if you can, uh, see if you can move forward with it. If that offer doesn't work out, okay, cool, we'll try another one. If it doesn't work out, we'll try another one. But, you know, sitting on the hands and waiting for the market to change is something that I'll think a lot of people are doing right now, which I completely understand. And if you can, great. But if you need to buy a house because you're in a, you know, a small condo and you're having, uh, twins, well, you might want to make that move, uh, a little bit quicker on the investor side, you know what you're doing most of the time. But when I am working with new investors, all that matters is the numbers. Um, so we wanna look at those numbers and we want to make sure that we've factored all of that in. Um, I think right now in the market, we have the opportunity to be able to make more, uh, more money than we have in a long time. Um, but maybe we'll go back to the norm, you know, of, you know, 3%, 4% growth in the real estate market, um, which, you know, to me, I'll, I'll take every, I'll take, I'll still make my investment in, in real estate as much as I possibly can with that number being where it is, just because of the fact that it is a highly leveraged investment for almost everyone. And, uh, if the market does continue to go up over the very long term, I'm a happy camper. So this is Phil Bailey. I am at the House Sigma Brokerage in London, Ontario. You can text me if you have any ideas for future episodes or you just have a question on the market and maybe you have an idea of where you're seeing it going. I know I'm always curious about your particular area and what you are seeing because you know, I, as much as I do work throughout the city and in the surrounding cities and towns, you know, I'm always curious to see what's happening in a particular, uh, neighborhood and what your, what you're seeing. And maybe we can have a chat about that. So you can text me. My direct cell phone number is

Speaker 2: 11:57

(226) 977-2348 or you can always email me at phil bailey host sigma.com. Hope everyone has a wonderful October and I'll talk to y'all soon. Take care.