Kawartha Lakes Real Estate Market Report October 2022

October was a tough time to be in the market as a buyer and seller. With yet another 50 basis point rise in interest rates, buyers decided to sit on the sidelines and wait until prices come down further. The Kawartha Lakes real estate market saw a massive slide in sales with both non-waterfront and waterfront properties.

With more and more properties going without showings and traffic, price decreases are on the rise as sellers tangle with the reality that money isn’t very easy to attain for the average buyer. The toughest decision is whether or not sellers should reduce their ask by a larger margin and take their home off the market and hope for a better outcome in the spring. Unfortunately, nobody can say for sure when this down cycle will end but with the Bank of Canada’s most recent announcement, this is not the last of the interest rate hikes we will see. The likelihood of them coming back down in the short term is even more unlikely with rampant inflation and global supply chain instability.

In a market like this, sellers with large equity are the ones who will come out on top. Home prices are still way up from a decade ago, and as long as your leverage is low (debts) and the right upgrades have been completed, you’re still very likely to sell with a healthy return on investment and then in turn, take advantage of a market where home prices are dropping, conditions are being accepted, and competition seems non-existent. Keep in mind, you can’t take your current lower interest rate with you, so be sure your new mortgage isn’t going to break the bank with current borrowing rates.

What about buyers who are first time buyers or over leveraged in their current mortgage? If you’re lucky to have an affordable rental or still live with relatives, it might be still wise to keep saving and setting yourself up for the right property that doesn’t stretch you too thin if rates continue to rise. If you are a recent home buyer locked in to a low interest rate, my advice would be to be aggressive with paying down the principle and build up your nest egg. Whether you have 2 years, 3 years, or even 1 year left on your current rate, take advantage of it while you can. As your renewal approaches, you’ll feel more confident in your decision making if you’ve strategized and planned ahead. Don’t make any frivolous purchases, buy a new car, or increase credit purchases to keep yourself in the best position to succeed.

Every situation is different, so regardless of what you’re dealing with, it’s best to speak with financial and real estate propfessionals to strategize and plan your next steps.