Winnipeg's Real Estate Blog

The U.S. Housing Crisis: How will it effect Winnipeg Buyers?

It seems that we have no choice but to watch and listen to the news report, as the U.S. stock- and housing-markets fall.  First of all, let me repeat what I had said in an earlier article:  Manitoba (and Winnipeg) housing markets are NOT subject to the same problems that are plaguing the U.S. now.  For reasons, please read:Housing Market in Winnipeg

Will their turmoil effect us?  To some extent, that is inevitable.  As consumer spending tightens, so does the need for exporting our goods.  As exports dry up, job losses follow.  Job losses means (in some cases)  home-losses etc etc.  This is a very condensed version of what could happen.

However, our housing market is NOT subject to the bad loans and poor building practices which occurred in the U.S.

Having said that, we will most likely see a 'levelling off' of the market.  THIS IS A GOOD THING.  Up until now, we have had an extreme "Sellers Market", with some sellers enjoying 10 to 20 offers on a house.  This may come to a stop and I repeat THAT IS A GOOD THING. 

What will this mean for the average buyer:

First Time Buyers:  NOW is a great time to buy.  Especially if you only have that 5% down payment, and were up against 10 other offers in the past, (many of which were unconditional), NOW is an excellent time to shop.  I've seen a couple of real 'gems' on the market, which only about a month ago would have received multiple offers, but are now sitting on the market, waiting for an offer.  At this time, there are over 1200 listings available in Winnipeg, well up from the 500 to 600 available thruout the spring.  Work with a Realtor who is a trained and certified Buyer Representative, and who can show you ALL of the listings on the market.  And yes.....I am a certified A.B.R.  (Accredited Buyer Representative)  For more info, contact me: bokauffmann@remax.net

Downsizing?:  Again, NOW might be a great time to do that.  If you are selling a higher-end home and looking to purchase something cheaper, by waiting to see if the market drops, you could actually loose.....(if the lower price home drops 10%, and your home also looses 10%, you loose more than you can save on that smaller home)

Selling Your Home?  A more level market will demand 2 things: more 'accurate pricing' and more 'involved marketing'.  Here is what I mean: in the past, setting an unrealistically low asking price for a home was an accepted practice....after all, with so many buyers, the homeowner could (and often did) receive a multitude of offers, and the house would sell for well above the asking price.  However, with fewer buyers, the chance of getting that 'bidding war' is diminished, and sellers (and their agents) who underprice a listing may end up with just one offer....at asking price. 

In addition, selling homes will now require a marketing plan which goes beyond simply 'listing it on the M.L.S.'   A little more effort needs to be invested to find the buyers, wherever they may be.  Here is where the Realtors who have invested in websites, Internet marketing, magazine advertising and other forms of marketing will be most successful.  For a look at my marketing plan, click on: Marketing Plan 

Selling Privately:  The days of selling a home by simply "plunking a colorful sign in the ground' may be coming to an end.  NOW more than ever, buyers will turn to a Real Estate professional for proper advice and guidance.  This advice they CAN NOT receive from the home owner directly, but only from a qualified Real Estate Agent.

In the end, a more balanced market (IF that is what is happening)  is a GOOD THING.

Please keep in mind that the above is simply MY take on the situation........certainly not officially endorsed by any Real Estate Broker, Organization or Company.

Selling your Home on your own? The Market IS Changing!

Update for October, 2008

"The Market IS Changing!"

By now everyone has heard about the US market and housing melt-down.  While we here in Manitoba are somewhat insulated from this, we are beginning to feel a change in the market.

Houses which were getting multiple offers, are now selling at 'list price', and other are taking longer to sell.

The first ones to feel the pinch will be (and are) the Private Sellers, who for years have been told that its 'easy to sell your own home'....you don't need a Realtor." 

Well, for years it was easier, mainly because there were so many buyers out there.  Once the flood of buyers has started to slow down, the remaining buyers now have a choice of homes to look at, and are doing so WITH A REALTOR.   Having a choice means "Less Competition", and so these buyers are no longer forced to consider the often overpriced, always inconvenient alternative of "private sales".

The time of being able to sell a house by simply 'plunking a colorful sign in the ground' is coming to an end.  This may have worked for some homes in a market which was flooded with buyers.  But in a more level market, where buyers no longer outnumber sellers by 10-to-1, finding the right buyer for your home requires a little more than a spot on the internet and a color ad in a magazine.  It requires teamwork and an organization with a proven track-record of over 100 years of success and service.

That type of teamwork is available ONLY thru a Realtor.  By listing your home, you will immediately gain access to all 1400 Realtors in Winnipeg, and all of the buyers working with them.

So if you are considering spending $700 on a Do-It-Yourself kit, please think about this:  Buyers who are looking for a house on their own will ALWAYS look at a "Listed House" (listed with a Realtor), but buyers who are committed to working with a Realtor will almost NEVER look at a "Private Sale".  Get access to ALL THE BUYERS.........List with a Realtor!

For a look at my marketing plan for YOUR home, click on  Marketing Plan

NOW is a very good time to buy!

The Winnipeg housing market has slowed somewhat from it's height of activity in the spring and early summer.

As evidence of this, we can see that currently there are over 1200 homes listed "For Sale" in the city, with another 245 Condos in addition to that number.

Compare this to the spring time when there were under 600 homes and under 175 condos at any one time.

Reasons for the 'blip' in activity:  it could be a number of things, such as pre-occupation with the federal election, or worries about the economy and the stock market fluctuation ("let's wait and see what happens" type of thinking).

No matter what the reasons, buyers have more choices right now than they have ever had during the year.  So NOW may be the best time to find a house and only have to compete against 1 or 2 other buyers.  But don't wait too long.....

"What's wrong with that basement floor?"

"Why is the basement floor all cracked? Is the house shifting?"  This seems to be a very common question these days.  By my count, nearly 25% of homes have basement floors which are heaving, cracking or breaking up.  This percentage is much higher in some areas, such as river Heights.  However, before we hit the panic button, or discount a potential home, lets take a look at what is really happening:

It is important to understand how homes are constructed.  After the hole is dug, the 'footings' are poured in place.

These footings are concrete and typically 16" to 24" wide by approx. 10" thick.  They basically follow the outline of the house (not including the garage).  In addition, you will find 3 or 4 square concrete blocks in the centre of the outline, which will hold future teleposts.  These footings serve to hold the weight of the house.  The next step in the constrution process is to pour the basement walls into these footings.  Following this, the entire house is built, up to and including the roof.  The last thing in the project is to pour the concrete basement floor.  This is poured on top of the footings, and not attached to them.  This is to allow the basement floor to float, much like a driveway.  The reason for this is simple:  As the ground underneath the house shifts and settles, it creates very high forces.  The 24" wide footings are able to deflect those forces sideways, however a large slab of concrete, perhaps 1400 sq ft in size, would not be able to deflect  this force, and must be allowed to move up or down.

What about piles?  A common mis-conception is that piles would prevent this from happening.  It is important to realize that the piles sit under the foundation (and footings) only, and have no impact on the basement floor.  An average home may take 20 or more piles, just to secure the foundation.

So if you see a house which has a rough and uneven basement floor, this does not mean it will ever affect the structure.  On the other hand, a pristine basement floor does not mean it will never shift or get worse, either. 

The bottom line: The basement floor does not form part of the structure of the house, and is designed to move and shift with the Manitoba Gumbo.

"WHEN" is the best time to buy a house (or condo)?

A common question among prospective home buyers is "when is the best time to buy a house"?  My (tongue-in-cheek) reply is "4 years ago".  But since we don't have a time-machine, and are forced to deal with the current reality, lets look at some realistic answers:

How about the spring-time?

While there are usually a flood of listings in the spring, this is also the most popular time for buyers.  After a long winter, home buyers come out to buy a home for early summer possession.  This means that there is usually a competition for the available homes.

So perhaps the middle of summer?

This used to be a case.  Most buyers take a break from home-shopping in the middle of summer, instead heading on vacation, the lake etc etc.  I have found there are 2 types of home-buyers:  Those who want a home, and those who really really want a home.  While in the spring time, both groups come out to look and shop, the second ground (the one who really really wants or needs a home) comes out all year long.  So where a home might receive 10 offers in May, it may only receive 3 in July, but those 3 are the really serious buyers.

Add to this the fact that there are generally fewer listings to choose from, and the end result is pretty much the same.

In the fall-time we usually see an increase in activity once again, as buyers want to get a home before christmas.  I see the fall market as a smaller version of the spring market:  more listings, but also more buyers.

So what then is the answer to the question:  I have found that perserverance and persistency pay off.  Don't give up, just because you lost 2 or 3 offers.  Many times I have had a buyer say "This is my last attempt" ....and then get the house they wanted. 

You may also be rewarded by occasional 'blips' in the market:  perhaps a listing has been just slightly overpriced, or a poor-weather weekend has kept other buyers away from the showings.  Any number of things can happen, but if you don't try, you won't succeed.

Perhaps the worst advice has been to wait until the market cools down:  I've known buyers who gave up their search for a home a couple of years ago.  The homes which sold for $125,000 at that time are now commanding $170,000 plus...   

As a real-life example I will leave you with this:  a young gentlemen bought a condo thru me in the fall of 2006.  At $79,000 I felt that the 2 BR condo was a very good value.  He lived in it for 18 months, and the only alteration he made to the condo was to allow his cat to destroy the carpeting.  We just sold that unit for $124,000, a 57% return.

While this type of increase is not typical, it does go to the point of this article:  the best time to buy....is right now!