Exchange overheard at a dentist’s office
recently. Dentist: So, how’s business.
Realtor: What business? I haven’t got any
business. I’ve never seen it this slow.
This could be a lament heard often in the days
ahead. This is, after all, the time of the year when
new listings always decline to their lowest level.
But there’s another factor now at play beyond the
approach of Christmas: The reluctance of home
sellers to put their home up for sale in a market that
has turned colder than the weather.
After several years of solid growth in sales and
home values, 2009 will likely be a year of declines
in both listings and sales on the Winnipeg resale
market. Both buyers and sellers will be inclined to
sit on the fence to see how the worst financial crisis
in 75 years impacts us.
Realtors here are predicting “modest gains” in
Manitoba home prices next year. We at ComFree
hope they are right. But we are not an island and
the coming recession has yet to impact us. Wait
until it does. Consumer confidence, the engine of
any real estate market, is shaken. We will be lucky
if prices merely flatline.
Listings will be limited to those who really have
to sell. Gone will be those discretionary forays into
the market of the last few years by homeowners
who just wanted to see what crazy price someone
would offer them. They won’t bother in 2009.
Crazy will be out; cautious will be in.
And sales may be down because buyers who can
wait will look for signs of a bottom in the market
before making an offer. Bye bye multiple offers.
This market hasn’t even started a price decline
yet, and there may not be one. But common sense
says that with the financial mayhem that surrounds
us, prices here cannot maintain the gains we’ve
come to consider routine. So many discretionary
buyers can be expected to sit on the sidelines. Why
buy today if a bargain lies ahead tomorrow?
But you may have to buy and/or sell in 2009.
What do you do?
If you’re buying, you can be more selective and
place conditions on your offer. Remember home
inspections and 48-hour clauses? They’ll be back
because fewer offers will force sellers to be more
obliging than they’ve had to be the past few years.
If you’re selling, even “modest gains” may mean
that any commission paid to an agent will cause a
more significant loss in the equity you’ve built up
in your home. And, if you’ve only bought the home
recently, you may actually lose money on the sale if
you pay commission.
ComFree’s low-cost marketplace will become
even more important in the days ahead. Eliminating
the commission will give you more room to
negotiate a price that sells your home in a more
competitive market, without it coming out of your
pocket.
You don’t want the agent to be the only one to
make money on your home sale. Doing the math
will tell you whether listing on ComFree or the
MLS makes more sense for you.
