Its the question being asked by so many home buyers and sellers in the Peterborough area – have I missed the boat? It’s a great question and one that certainly warrants some careful examination. While no one can predict with certainty the market future, there may be some schools of thought that can perhaps shed some light.
Personally, I go back to my first year in University when we sat as eager students, ready to know it all. Economics 101. It wasn’t long before the professor drew his first supply and demand curve and began to introduce the equation that would consume so much of our time and energy. And while there was much discussion and learning geared towards the intricate relationships at work, the simple fact remained. When supply was low and demand high, there would be upward pressure on pricing. These market dynamics would also encourage supply increases as high prices attracted investment, and manufacturers scrambled to produce more and take advantage of strong demand….The theory was simple and it’s one I’ve turned to many times in my marketing career. In attempting to answer the “has the ship left” question of buying real estate, we can use this theory to speculate.
Its no secret housing supply is super low – talk to any real estate professional (and potential buyer) and they’ll confirm there isn’t much inventory on the market, especially in the entry level pricing segments. There is lots of demand as Peterborough is ‘on the map’ for buyers, both locally and those from the GTA, who desire to locate here. As a ‘born and raised Peterboroughian’, it shouldn’t have been a big gamble to bet that our beautiful region would eventually attract people from the city. Perhaps we secretly hoped it wouldn’t happen, but we all knew this region had so much to offer, with perhaps one exception – jobs. But as economies shift, and people are able to work online, employment is returning to the area – it just looks different. Its not in the big manufacturing plants but in the home offices and coffee shops.
Quality of life leads the way as many younger couples are seeking to raise families in a community with smaller town values. Of course, they want the larger retail experiences to go with it – Costco and Starbucks set the mark as some ‘must have’ options. Affordable housing is then the connecting factor, as it’s just not possible to find good real estate in the GTA below the $500K range.
Bidding wars have become common practice in Peterborough – whether by agents intentionally listing homes lower than market values and ‘holding’ offers, or with new product listings for hot product including residential listings with secondary suite/basement apartment potential. Its interesting to note that I am also getting a lot of interest for commercial space, as business follows the 407 East.
So the simple answer is – if you have a home to sell, you get to take advantage of the supply/demand situation and benefit from higher prices and demand with low supply. It takes considerable time to impact the inventory of homes – with permits and building, significant increases in inventory are often years away so supply can’t increase overnight. That said, developers are rushing to fill the void and subdivisions in neighbouring communities are also selling well. From Millbrook to Norwood, available inventory is getting the attention of buyers looking to enter a market they cannot afford in Toronto. We will see hundreds of new homes hit the local market over the next 12 months. But with the demand that is currently not being met, and recent interest rate drops, one might surmise that prices will remain strong this Spring and Summer.
The unknown is consumer confidence – remember the strong demand I spoke of? If consumers feel their employment is solid and the banks agree, the demand stays strong. The general state of the economy affects this confidence and its why the Government of Canada tries to support spending with lower interest rates.
Of course, needing to purchase a home after selling can present challenges – while its a spectacular time to move up, conversely, it’s a terrible time to downsize….with a few exemptions. There are strategies that can make this a win/win situation.
Have you missed the boat? The truth is the boat continue to sail but your destination will determine the best strategy to take advantage of this hot Peterborough real estate market.
If you would like to discuss how you can profit with the sale of your home or cottage in Peterborough or the Kawartha’s, or how to purchase successfully in a competitive market, feel free to reach out. I’d love to have a coffee and discuss.
Of course, this post is my personal opinion and available for your review. It’s also intended to solicit clients who are not currently under contract, to enable you the opportunity to benefit from my marketing experience and work ethic. If you are under contract, I wish you much success in working with your real estate professional.
