Some buyers regret the outlandish bids they made during the early spring frenzy now that prices are sliding.
The rapid downturn in Canada’s housing market is restoring a sense of calm to buyers who no longer need to fear being sucked into the whirling vortex of bidding wars. But now that prices are sliding, some buyers regret the outlandish bids they made during the early spring frenzy.
In June, new listings remained fairly robust while demand plunged, Ms. Fan says, and that pushed the sales-to-new-listings ratio lower for all regions. Buyers these days are often making offers conditional on home inspections and financing. That gives them a few days to iron out wrinkles before the deal firms up – or back away entirely.“It’s just common sense. If something goes sideways, at least we’ve got counsel involved from the start.”
Now buyers approaching the closing date for a property they bought in the spring can see average prices in the area have tumbled. If they estimate the price of the house they agreed to purchase has dropped by $260,000, for example, they might be tempted to forfeit the $60,000 deposit they gave and walk away, Mr. Lackie says.
“You’ve got to come up with another $300,000 because the bank’s sure not going to front you,” Mr. Lackie says. “That’s when the scramble starts.”Mr. Lackie expects the market to remain fairly quiet over the summer, with another bump in listings in September. He predicts a portion of those will come from people who moved to the suburbs during the pandemic but no longer want to commute. Another fraction will be homeowners who are financially stressed with the rise in interest rates.
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