Starting your own blog is hard enough with a busy schedule, but when you throw in the roller coaster that was 2017 for Real Estate, you better believe that even my best attempts were thwarted! So, while I am fashionably late at getting this blog post up … it is still technically January, and I will take that win. So, without further adieu, I present to you:
2017 – A Year in Review for the Peterborough Real Estate Market.
2017, what a year! It wasn’t just a crazy year for me in the Peterborough Real Estate Market, but for all agents – even veterans. No one has experienced anything like this past year before. The spring market started up real early last year, with bidding wars becoming common place, as early as the end of January. Home prices were hitting record numbers, and it seemed like there was a demand for every kind of house the county had to offer.
I remember a lot of people remarking on how great business must have been for agents, but, they were overlooking the big issue; the demand was created by a lack of inventory, compared to how many buyers were trying to purchase homes. During this time, listings would hold offers for a week or so, and come offer day, there would be 8, 20, 22 offers registered on a home. Only one buyer can buy a house, which left all those other buyers back at square one. Not a great feeling for buyers and agents alike.
By June, all bidding wars dissipated when Kathleen Wynne announced the foreign buyer tax, and the stress test imposed on buyers who had the intention of purchasing with less than a 20% down payment. For many first-time buyers, the stress test forced them into staying renters longer since they no longer qualified for a starter home in the Peterborough area. If my memory serves, a buyer who had previously qualified for a $250,000 mortgage, would only qualify for $190,000 with the test.
While some do attribute foreign buyers for driving up prices in Peterborough, I personally don’t think that was the sole reason for this area, it was more of a trickle-down effect. In the Toronto and GTA market? 100%. Foreign buyers pushed out Toronto buyers, who went to the Durham Region and pushed Durham residents out. You see where I am going with this … Durham came to Peterborough, and the influx in buyers from both Peterborough and those buying from Durham exceeded supply and that is where our bidding wars stemmed from. It simply came down to basic economics, supply and demand, and in our area, the demand exceeded the supply.
Fortunately for buyers in our area, the second half of the year provided a more level playing field. Despite it still being a sellers’ market, Peterborough and surrounding area experienced less and less bidding wars, and inflated sales prices. Shockingly, I heard very few accounts of deals not closing, and even fewer appraisals not working out.
Towards the end of the year, in November and December, the demand grew again with the anticipation of the new mortgage rules that came into effect on January 1, 2018. The scramble for people to purchase before these rules were implemented caused another spike in bidding wars to close out the year.
To put this all in perspective, the end of year average sale prices had increased to $392,317 from $319,77 in 2016. Which is an even bigger jump from 2014, where the average sale price was around $278,000. Crazy.
The big question now, is will 2018 mimic it’s predecessor? Only time will tell.
Let me know in the comments, if you think the Peterborough Real Estate Market will be booming again, or if we’re in for a slow down.
Signing off from the Electric City,
Linz Hunt
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