This is based on my market — Calgary — but the same theory applies to every Canadian market. Even if your market conditions are much more negative, there’s still a certain point where you pass the peak of the spring market. You just need to take the time to analyze your own numbers. (The change may actually be much more severe than it is here. Believe me, I’ve been through every different type of market. But the main point of this is that one of the keys to success is the ability to quickly adapt.)
Welcome to the late spring market, a significant transition point past the peak of the market in terms of sales volume.
Think you may be past the peak? The answer lies in the trend.
Looking at the weekly and daily stats, I can see that sales climbed steadily throughout April until mid-May, and they’ve been declining ever since. A detailed analysis allows me to accurately state that May 15 was the peak of the market for detached homes in Calgary.
What does this mean in practical terms?
It means that sellers need to adjust their expectations.
1. The available inventory has risen steadily since February 1 and is now about 50 per cent higher than it was then.
2. Sales have steadily declined since mid-May, as mentioned. This trend will continue, with little or no deviation from now until December or January. I can confidently state this, backed by two decades of diligent market observation and analysis.
3. Fewer multiple-offer scenarios are occurring now compared to a month or two ago. This trend will also continue, partly due to different market conditions with more listings and fewer sales, as already discussed. But there’s one more important caveat.
“Early spring” buyers are more willing to jump into multiple-offer scenarios and bid much higher than the list price to get a property. They’re early adopters with a different mindset than “late spring” buyers, who tend to be more conservative and less inclined to write much over asking. (This partly explains why they haven’t bought anything yet!)
Another significant factor your sellers should consider
At any given time, only a limited number of buyers might consider buying in your geographical area and price range. For the sake of simplicity, here’s a breakdown of when 50 theoretical buyers might buy a single-family detached home between March and August:
- March: 8
- April: 12
- May: 12
- June: 8
- July: 6
- August: 4
Based on this, if you wait until July to list a home, 80 per cent of potential buyers have already bought! AND, the remaining buyers have much more inventory to choose from! AND, these remaining buyers tend to be more conservative!
Can you see now why sellers need to adopt a different mindset in the late spring? Anyone can look back on what happened in March, April and May and assume it will be the same moving forward. That’s a huge mistake and one you can help your clients avoid.
Many other factors also affect the market, but “early spring vs late spring” is a significant one that must be considered to achieve success. The bottom line is that in “late spring” (now) it’s even more critical to:
- Price it right from the start (not too low and not too high), and
- Ensure that your property stands out from the crowd.
As a skilled and experienced agent, you’ll guide your clients in accomplishing both objectives. Even more importantly, you’ll constantly alter your mindset to adjust to changing trends and always tell your clients precisely what you believe to be true.
After Ted Greenhough’s first year as a Realtor, he earned between $590,000-$865,000 every year for 12 consecutive years, all as an individual agent, without ever once making a cold call, reciting a canned script or doing any other “salesy” stuff. Now he runs Agent Skills, an online learning program for agents across North America.
I thought I had everything covered with market statistics but this is an eye opener.