STILL CRAZY AFTER ALL THESE YEARS

When the Bank of Canada announced on April 16 that the interest rates would hold firm, it marked the first time in many outings that the status quo was held. Following a series of increases in 23/24 and then a series of rate cuts ‘24 to now this marked the first time in many months that there would be no change. Don’t expect it to last. Next rate announcement is June 4^th and at that time it is widely expected the rates will be cut another quarter to half point. For now the policy rate stays at 2.75% but expect that to change. Inflation decreased from 2.6 to 2.3 % in March but it’s anybody’s guess where that will go with all the antics coming out of the U.S. Canada should have a new leader by the time this story is printed and the government can get back to fighting the Orange Menace to the south of us. While all this goes on, the housing market is staying as kooky as ever. All three major parties announced plans to battle the housing crisis. While they all made sense on one level or another, the one thing needed more than anything now is some common sense. Prices are up and sales are down. HUH? Yes, you read that right. Things are really crazy and unpredictable these days. Believe me, I just went through this first-hand with new clients. I was referred a lovely young couple wanting to get into the market. We spent a Saturday looking at 5 different homes in the Ajax and Whitby areas. They saw two in particular they liked and after much deliberation decided to offer on a Whitby listing. Great idea. Except 12 other buyers had the same idea. Modest townhouse in a nice area drew 13 offers!! They held back offers and ended up with a selling price some 60K over ask. At the same time, one of the other 5 places we saw, but had no interest in, drew 22 offers on presentation day and sold for a whopping 170K over ask. Now I know they set asking price low to stimulate the appetite for a bidding war, but this craziness was what was going on 4-6 years ago. We reloaded and went back to the first place we looked at. Attractive semi in a nice area. They, too, were holding back offers. I recommended that we wait and see what happened with the hold back offer date. As it turned out I got a call from listing agent asking if we were interested. I said yes but not interested in a bidding war. So the date came and went and surprise of surprises. No offers. So, we regrouped and put an offer in at the exact asking price. This is where it got silly. Seller wanted 60K more than we were offering. Yes, you read that right. So I had to explain to listing agent that , once again, the market determines the value of the home. Seller was stubborn so we basically put our absolute best foot forward at 11K over ask. That was it – no more. And we were prepared to walk and made that abundantly clear. So seller capitulated and accepted our “disappointing” offer of 11K over ask. See what I mean? Crazy times. Let’s hope common sense creeps back into the equation going forward so this kind of nonsense goes away. I’m thinking that won’t be happening too soon, but we can always hold out hope.