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    Friday
    Aug062010

    Oakville Housing Prices Are Falling – Strategize to Save Thousands

    A couple weeks ago, I wrote an article outlining my rationale on why I expected home prices to drop in July (read the related article here).  My analysis has proven to be right.  July statistics were released this week showing that prices, NOT number of sales but the actual value of homes dropped on average by a whopping 18% in July versus June.  The average sale price of a home is back near July 2009 numbers.  Relatively flat year over year numbers may not seem like a big deal but the fact that the prices fluctuated by 20% within this year should be extremely significant to anyone thinking of buying or selling. 

    Here are a couple examples illustrating how buyers and sellers are impacted by fluctuating housing cycles:

    Example 1: If you were a seller looking to list your home in June, you would have been better off to price it at June’s fair market value or slightly lower and actually selling your home in June, rather than list it above fair market value (which is often done) on the chance that someone will be willing to pay you more if you wait.  In this case, as the market declines, your home becomes even more over-priced relative to everyone else’s and you become less likely to sell at June’s original market value.  Incidentally, I recommend the inverse in times of increasing value.    

    Example 2: If you were a buyer who started looking in June, you could have saved thousands by insisting on holding out for what was below fair market value at the time and risk losing the home rather than pay above fair market value thinking that the market would continue to increase with time.  In times of increasing values, offering slightly more than what you think the home is worth at the time isn’t always a bad thing if it secures you the sale.  As many buyers will know, when the market is booming, you can get priced out of a home you could have afforded a few months earlier if you had taken action.  When the market drops sharply, you will be overpaying if you don’t bargain hard for the right price.

    My pricing and negotiation strategy varies widely based on the type of market we are in.  Approaching the market with the right strategy is absolutely vital to securing a great home (and investment) and it is something I discuss in detail with all my clients.  All buyers and sellers should seek out a local realtor to help them understand the nuances of the particular market they are interested in.  When hundreds of thousands of dollars are at stake, the knowledge of an expert can save you thousands of dollars and save you from making a costly mistake. 

    If you want to get my take on the future of real estate prices in Oakville, I would love to hear from you.  I can be reached at 905.484.5162 or emailed at lindsay@remaxaboutowne.com.

    All the best,

    Lindsay

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