JANUARY MARKET ON FIRE… WHY?

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According to many media outlets, what we were expected to experience this year is a slow start, and a progressive acceleration of activity, in the real estate market… coming this summer when rates are expected to drop.
However, reality doesn’t always follow prediction, and we’ve witnessed this in a big way this year!
Since our return to the office, on January 8th, we’ve experienced more activity than we’ve ever seen in a January… ever! Initially, I thought this might be a coincidence, and might only be happening to my team; but, after consulting with many other brokers here in Montréal, and in other parts of Canada, it seems to be the case across the board.

So, how is this possible?
Several hypotheses could be applicable; and, here are a few of my own: 

1. Buyers and sellers who had postponed their plans, to buy or sell, are now moving forward, taking advantage of the beginning of the year. 

2. Although the number of buyers able to purchase with higher rates is fewer; the shortage of listings, and the stubbornness of sellers in maintaining high prices, have made transactions more challenging. Perhaps the extended standoff has motivated buyers to push their prices a bit higher, and sellers are more willing to come to terms with less money for their properties than they would have anticipated.

3. Perhaps buyers believe that lower rates will put them back into a stronger sellers’ market. Maybe not as wild as during COVID, but one where they’ll have to compete much more for their new homes than they do now.

4. Some savvy buyers may be making offers in today’s market and requesting an extended closing during the summer or fall, to have the chance to buy at today’s prices but with tomorrow’s rates.

Although it could be a combination of factors, let’s not forget that we have just come out of a rather turbulent few year. 
At the onset of COVID-19, everyone, including major banks, believed that the real estate market would crash. However, real estate began climbing like never seen before. Then, interest rates had to be significantly adjusted to cool down the market; and, once again, everyone, including major banks, feared an unprecedented real estate crash.
Now that none of those predictions have materialized, it appears that we might simply be in a stable market in which buyers and sellers can proceed without undue concern.

Regardless of the granular details and interpretations, things are heating up, and we’re excited! 

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