Thinking of selling your Owen Sound/Grey Bruce home in 2023? Here’s what to expect: Updated March 7, 2023

As we enter into the spring market of 2023, what should I expect if I am thinking about putting my home up for sale in the Owen Sound and Grey Bruce Area? That’s a great question, and to answer it we need to look at the stats. I want to start off by saying there are A LOT of fear mongering headlines, and while some of them may be true, oftentimes they focus on Average Statistics for a general area,  based on a snapshot in time. Statistics are good to determine a trend of where things are going, but each house can vary and it’s important to have an updated comparative market analysis done before you go to sell.

How long will it take?

Let’s begin with days on market. How long should you expect it to take to sell your home? Right now the median days on the market is about 79 days in Grey Bruce.  BUT where you are matters. In reality, a well priced home should take around 1 month, higher end homes will take a bit longer. We are seeing good movement in homes under $500,000.

According to data from ShowingTime, showings are down 73% from this time last year. The days where there were 20+ showings in the first few days are gone, and now you can expect 1-2 per week, depending on what price point your home is in. If you are priced under 400k, you may get more.

How much will it sell for?

How much money should I expect my home to sell for? Well, no one can know for certain what you will get, but the average home seems to be selling for 95-96% of its listing price. In Grey Bruce the median sale price currently sits at $600,000 for a single family home, this is down about 18.1% from a year ago today. Looking at Owen Sound the median sale price sits at $422,500.  This may sound pretty dreary, but keep in mind that prices are still up 25%-50% from 2019/2020. 

Why has the market changed so quickly?

Why has the market changed so quickly? In 2022 Canada has seen the BoC raise rates from .25% up to 4.50%. The speed at which this has happened has flattened the market. 

In summary, you can expect your home to take a bit longer to sell, and because sales are down so much, your home will have to be priced and presented right to be in the 80% range of homes that sell and you should be prepared to reduce the price if the feedback is negative or you are not getting any showings. If you do get an offer you should be prepared for there to be multiple conditions to work through. 

Thinking of selling? download our seller guide! click below:

SELLER GUIDE

Curious what your home is worth? request a home valuation:

HOME VALUATION

If you’d like to discuss the market, we’d be happy to chat. I can be reached at tim.matthews@c21.ca or 519.375.7153

Source: RAGBOS Feb Market Stats

Do I have to pay capital gains tax if I sell my house before living there one year?

If you’ve sold Real Estate recently you’ll need to make sure you report it on your upcoming taxes. If the property you sold was your principal residence, you won’t have to pay capital gains tax on it as you will be exempt based on the Principal residence exemption (PRE).  What defines principal residence? You can have one principal residence a year that you must have generally lived in over the year. Many people think you have to live in your principal residence for a full year to avoid paying capital gains tax, this is not true and there is no set time frame for which you must occupy the residence. It’s called the ordinary inhabited rule.

Now, if you’ve been buying properties and flipping them every year all while claiming the principal residence exemption, you might have something to be concerned about. An article by the Financial Post talks about how a couple bought and sold real estate in 5 consecutive years. In each case they made improvements to the home and sold them for a significant profit. They were found guilty of not properly using the PRE. You can read about it here.

For someone who has decided to sell for personal reasons, employment change, or simply wanted to rent, you don’t need to worry about this. However, if you frequently buy and sell real estate while claiming the PRE, it’s possible that the CRA could question your motives. 

Need to connect with an accountant? Contact Adam here.

Want to talk Real Estate? Let’s Connect! 

*This is for educational purposes only and should not be taking as tax or financial advise, talk to an accountant.

Six trends to predict the housing market

Here are six things we can keep on eye on to try and determine which direction the housing market could be heading.

1. The news – News companies thrive on trying to predict the future and while they sometimes over state things, oftentimes it can be a good indicator of what is to come. If buyers are overly fearful of what the news is saying, it can cause them to wait it out and see what happens. 

Google “Canadian Real Estate market crash”  and you’ll see headlines like

The news is certainly indicating that a correction is on the horizon, but doesn’t that sound familiar?

2. Employment Rates – Low unemployment levels typically point towards an increase in prices as more people look to purchase and high rates would decrease as people cannot afford to buy. Canada’s unemployment rate has been trending down for the last 6 months, but It is higher than pre pandemic years. Will Vaccine Mandates affect this? 

https://tradingeconomics.com/canada/unemployment-rate#:~:text=Unemployment%20Rate%20in%20Canada%20averaged,percent%20in%20June%20of%201966.

3. Months Of Inventory – This market stat is one of the best indicators of where the market is going. Month of inventory means this: If no new listings came on the market, how long would it take for everything currently for sale to sell. Currently in Grey Bruce it is 1.8 months and in Canada it is 2.1. We remain in a tight sellers market. 

Sellers Market <4 months 

Balanced Market 4-6 months

Buyers Market >6 months

4. Affordability – This includes the cost of the home, cost to maintain the home, and the level of income to support the home. If income rises with home prices, then things will not change, however if income stays equal and home prices go up then we have a problem. Low interest rates have been key to keeping homes affordable. An increase in interest rates combined with an increase in gas, electricity, property tax would take a toll on housing prices. 

5. Showing Request – Showing request on listings tracked over time can indicate buyer confidence in the market. In Ontario showing requests have been trending down since May, but look to be starting on an upward trend, more data is needed. 

How are builders feeling about the market? An increase in housing starts indicates confidence, lower starts indicate skepticism. Since the pandemic began Canada has been trending upwards in housing starts, peaking in March. Since then it has been trending down, however we are still significantly higher then pre pandemic. 

How about Lumber? We all know how bad that got during the winter, it has fallen, taken a sharp turn and fallen back down. 

So what can we conclude with all this information? Right now the news is predicting a crash, and affordability is dwindling with the cost of housing and living going up. However, inventory remains low, unemployment is low, and builders are still building. I believe we are in an unknown territory. 

Want to talk Real Estate? Connect with me here, I’d love to chat.

Source: https://www.revrealestateschool.com/tips/how-to-predict-real-estate-prices

Do you have to pay tax on vacant land sales in Ontario?

To answer this question it has to be broken down into two categories, Capital gains tax and HST.  In general you do have to pay a capital gains tax, however HST is not often applicable. Watch the video below as local accountant Adam Vander Duim explains the answer to this question.

According to the Gov of Canada there are 3 scenarios where your vacant land sale would be subject to HST:

• capital property that you have used primarily for a business
• the sale of land through the course of a business
• selling land after the original parcel has been subdivided 2 or more times.

For more information on tax of vacant land sales check out the Government of Canada’s website. 

Need to connect with an accountant? you can contact Adam here.

Want to talk Real Estate? Connect with me here, I’d love to chat.

What does blind bidding mean?

The Federal Liberal Government recently announced its plan to put forth a buyer’s bill of rights that would ban the practice of blind bidding in real estate. On the Surface eliminating blind bidding would probably seem like a good thing but would it really be? In this blog I’ll explain what blind bidding is, and the pros and cons for each side. 

In Ontario sellers can opt to sell their home however they choose, through blind or open bidding, with the majority of sellers choosing to sell with the blind bidding method. With the blind bidding process nobody is allowed to know anything about the other parties’ offer, this includes price, terms and conditions. The only thing that a buyer can know is the amount of offers they are competing against. So buyers will put out their best bid on a home and hope that it is higher than the other offers. A buyer could pay 200k more than the next best offer and they would never know it; so the reason why there is much talk of banning the practice is to avoid buyers from drastically overpaying for a home which in turn should cool off home prices.  

Is this really a good idea?

Privacy concerns – from a strategic standpoint the price is not always everything that will win an offer. There are so many other factors that can affect what offer a seller will choose; conditions, deposit, closing date. There are a lot of grey areas here. Does the seller have to pick the highest price or will they be able to choose whatever offer they want? What about an offer that has a condition upon selling their home and wants to pay more? 

Seller rights – We live in a free country and sellers should not be told how they can and cannot sell their homes. What is being proposed is to amend the criminal code so that you must sell through an open bid strategy. 

Will it actually help cool prices? Most advocates for this think that opening it up would create an even playing field, however could it do the opposite? In parts of the world where they do open auctions it often creates a frenzic chaotic environment that is easy to overspend in. Australia uses an open bidding process and often holds auctions on the front lawn of the home. Australia is currently in the middle of a huge housing price boom and also sees homes go over the asking price. It’s arguable that a blind bidding system allows buyers a calm environment to determine what they are willing to pay for the home. 

Finally, not every home gets multiple offers, in fact prior to COVID hitting the majority of homes outside the GTA did not get multiple offers. We have a housing supply problem in Canada that has been accelerated during COVID. The only 2 things that are going to slow prices down are building more supply and raising interest rates. In my opinion opening up the offer prices is not in the best interest of the buyer or the seller. 

For more info check out my video below: