Reading a book by Simon Sinek, he goes deep into a subject that has always fascinated me. About how human nature can be mapped out on a graph and how the media, conversations with friends and the general public can influence buying habits. If you think of a line graph that starts out low and quickly rises, peaks and then drops back to where it started, the visual is what happens when people encounter a sales cycle or trend.

If we look at this cycle as it relates to entertainment, it would be like a hot band coming to a popular venue. The tickets went on sale, and I decided to buy a pair, knowing the show is still months away. What happens is that as the sales ramp up, the ticket sellers (we all know who sells tickets) start to increase the prices then releasing them on different platforms as “resale tickets.” The resale prices, which are not really resale they are just tickets at much higher prices in some cases can be ten or twenty times higher than the first offering. The early buyers (adopters) paid the lowest price for the tickets.

Simon describes the curve of interest by identifying the first people who see a trend starting and jumping in early. These are called “early adopters.” Once mainstream start to see these early adopters and their buying frenzy, the next phase of buying starts. This next group being labeled the “early majority” followed by the “late majority.” The final group are called “laggards.”

How this applies in Real Estate is when the market stumbles, as it did from the spring of 2022 to December 2023, When people move during a market shift typically it is due to necessary circumstances. Divorce, financial issues and job transfers are some of the reasons for necessary moves. These moves take place independent of the state of the market. However, as the market begins to recover, the early adopters see opportunities and get into the market while sales are still soft. They have more leverage in a soft market and believe that the risk of investing will pay off in the long term. Once this group becomes active, the early majority who are watching closely feel that the market is shifting, and they start to buy. This is when you read online headlines about bidding wars and multiple bids. Late adopters and laggards come in toward the end of the sales cycle and tend to buy when prices are higher.

We are currently mid-February, and I can see that the early adopters are out in full force. Not only that, but the groundswell of activity is also ramping up quickly. We are seeing more Buyers touring homes, open houses are busier, and the online activity is more active that it has been in months. The average home in Oshawa has so far this month sold for 5% over asking price. Both Whitby and Clarington have averaged 3% over. Along with this, all three communities have had 63% of all homes sold for full price or over.

Typically, what happens when the early majority start buying in large volumes, the prices increase. The average detached home in Oshawa increased by $89,000 in January alone. If the market continues strong it will repeat what we have seen in strong markets;  increasing prices due to low inventory and short selling periods.

Following the instincts of the early adopters, if a Buyer purchases a home today, they may save tens of thousands of dollars over the next year and potentially over $100,000 in savings.

Another interesting group are those living in the past. These are Buyers, Sellers and some Agents. When the market shifts quickly to a strong, robust market such as the one we currently are experiencing, some Buyers feel that they have the same leverage they had during the slowdown of 2023. I have also noticed the same line of thinking with Agents. In the past week I received an offer on a property we are marketing that was $230,000 under the asking price. The successful Agents and Buyers are the ones who have a grasp on how our market is right now. These are the Buyers who end up doing the “happy dance.”

If you are in the market to buy or sell a home, it has never been more important to use a full time, local, experienced Agent. Experience is the best characteristic a Buyer or Seller can hire to move seamlessly.

If you are interested in making a move, I can be reached at lindasy@buyselllove.ca or 905-743-5555.

Connect with us on Facebook, Instagram, LinkedIn and YouTube.