Phil Collins recorded a song years ago that I love. “In the air tonight.” This song has never been more relevant than where we are currently with Real Estate in Durham Region. Or maybe the song “What a feeling” from Flashdance. Both of these songs share a similar message. There is a feeling that is hard to put your finger on, but your instinct knows what is about to happen.

What I feel is about to happen is that the Real Estate market is about to take off. Why? I have a few reasons, beyond what my “gut” tells me.

Let’s start with what Simon Sinek calls “early adopters and laggards.” He describes early adopters as the group of risk takers who can see the beginnings of a trend and they take action. Laggards are those who wait for the trends to be front and centre before they make a move.

Early adopters in Real Estate tend to be investors. People who are investors in Real Estate tend to slow down activity when it is popular to buy homes. They get in early and are the ones who get the most increases from their investments. They tend to rely on instinct, gut feeling and reading statistical trends.

The rewards can be shocking. A few examples in Durham Region would be:

• After the slowdown in 2017 a Buyer who purchased a property at the end of the year would have paid on average $575,000. By the end of 2020, the same home was selling for $778,000 – an increase of value of over $200,000!
• The downturn in the USA economy affected us in Canada a few years later. In November 2012 a home in Oshawa was selling on average for $264,000 and 2 years later it had increased to  $315,000. An increase of $51,000.

Investors are interested in 3 specific outcomes. First, they want to be able to find a tenant to cover the costs of the property, Next, they are hoping that the values over time increase and third, they know that over time the mortgage will be paid down. In the 2^nd example about a Buyer securing a property for $264,000 would have needed to have a 20% down payment meaning the mortgage would have been $211,000 and at the current rates over the fist two years the investor would have paid $9,000 off of the principal increasing their return to $60,000.

Investors are returning to the Real Estate market here in Durham Region. One thing a seasoned investor understands is that markets rarely stay flat for a long time. Our market has been sluggish for about 8 months, and the Buyers who chose to purchase bought in the first “Buyers’ market” we have had in years. Many of these Buyers have been investors and we are seeing investors returning with the shortage of rentals on the market and the fact that rents have increased making it easier to pay for the carrying costs. Over the past two years in Canada rents have increased over 22%.  The average rent for a 2-bedroom apartment is $2,200 which is encouraging investors to get into the market.

We are still in an amazing buying window, however that opportunity may be over soon as we move from a Buyers’ market to one favouring Sellers. We are feeling this shift happening and my intuition tells me that as we move into the spring that window of opportunity for Buyers may become narrower and narrower. If you are planning on buying a home, my advice is to move prior to the spring rush which will bring higher values.

If you are interested in exploring buying a home in this market, or if you would like to discuss investment opportunities I can be reached at lindsay@buyselllove.ca or 905-743-5555

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