Real Estate Outlook for Atlantic Canada in 2022
Despite the raging global pandemic of COVID-19, the Atlantic Canadian real estate market saw a significant boom over 2021. As a Maritime province, New Brunswick was at the center of the action for this past year, with house prices soaring and seemingly no signs of slowing down. What will 2022 bring to New Brunswick and, more specifically, Fredericton? To better understand that, let’s review what has already happened. We sat down with one of our veteran REALTORS®, Dave Watt, to hear his real estate outlook for Atlantic Canada in 2022.
Before 2020, we could examine five years of data to forecast where the housing market would go in the next five years. But, the pandemic has changed the forecasting length. For a more accurate idea of what will transpire in 2022, we should only go as far back as March 2020, when the first signs of the pandemic affecting housing sales and prices first hit Canadian shores.
What Was the Difference between 2020 to 2021?
The 2021 season was a game-changer in real estate. Dave recalls how at the beginning of 2021, REALTORS® received a report stating that nationally Canada was in a housing crisis with about a two-month supply of housing. If REALTORS® stopped listing houses, there would be no inventory within two months. New Brunswick was higher than the national average, beginning the year with a three-month supply that has dropped to about a month and a half, creating what REALTORS® call a “seller’s market.”
What is a Seller’s Market?
A seller’s market is defined as when the seller of the home holds all the cards. For example, ten parties are submitting offers on one property. The seller then has the power to request the highest and best offer enabling them to drive the price up over their initial asking price. As REALTORS®, both on the buying and selling sides of the transaction, we give the best advice possible in these situations. It’s all a matter of keeping up with the market and the rate that homes are selling. For example, in March of 2021, a house could have sold for $200,000, but in November, it would reasonably sell at $230,000 – that’s how fast the market is changing. Agents are constantly working on researching current trends, speaking with other agents, and gathering their information on what works to stay relevant and competitive in this fast-paced housing market.
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How Does This Impact Sales and Sale Prices?
2021 outsold the record 2020 sales year by over 500 homes in New Brunswick due to the high demand from people relocating from other provinces to the Maritimes. This is, in turn, driving up the sales prices of homes as buyers enter a multiple offers situation on almost every house on the market.
An Influx of Buyers
Interest from out-of-province buyers has never been higher. People from all over Canada are looking to move to New Brunswick, more specifically St. John and Fredericton, creating a massive surge in demand for properties in these areas. At this point, our brokerage invested in tech that would help buyers make more informed purchasing decisions without an in-person viewing. This allowed us to adhere to COVID guidelines during the first few months of 2020.
Over 50% of recent homebuyers in the area have been attributed to out-of-province buyers who are buying their new homes often without seeing them in person before moving in. This influx is making an already competitive market even more competitive, especially for those who reside in New Brunswick. With the current research available, we don’t see much of a change coming with the influx of buyers in 2022. The only way to combat the desire for buyers to purchase homes is to ramp up construction.
What Changes to Expect in 2022, if Any
Our real estate outlook for Atlantic Canada in 2022 predicts the market will continue to move at a fast pace until the demand slows and the supply increases. This means that prices will continue to rise until we get back to a stable market with at least a three to six-month inventory, something that’s increasingly difficult to achieve with the current pressure on the resale market and could take two to three years. We can expect the continued flood of professionals and families relocating to the province and continuing multiple offer situations.
What Advice Can We Give Those Looking to Buy or Sell in 2022
Sellers need to keep in mind that even though it is a seller’s market, you will be able to broker an even more advantageous offer on your home with a bit of forethought and presentation. This means making sure your home is tidy inside and out before showings by mowing your lawn, proper shovelling and plowing during the winter, fresh linens, and other personal touches that buyers love to see in a home such as fresh flowers and decorative pillows making the space feel like home to them, not just another house. Helping buyers see how they might live in your home sells the lifestyle that the buyer is looking to create. When in doubt about what you can do to prepare your home for the market, consult with a trusted REALTOR® for their advice and market expertise.
Buyers need to be prepared to get into the market competitively. Meet with a REALTOR® soon to understand your circumstances and how you can maximize the assets you have, and where you can potentially improve. Understand that waiting for the market to slow down might not be an option for you, with housing prices rising 10% on average since the pandemic. If you get your investment in now, you will reap a greater reward later. Don’t decide to wait too long. Buyers also need to be prepared to enter a multiple offer situation. Prepare a “love letter” to accompany your offer that tells the seller why you love their home and how your family will live there; this added a personal touch and connected the seller to you rather than the number on your offer; you’d be surprised how often this works!
If you go into the buying process thinking you will find a turn-key home with every feature imaginable, you could be overlooking many gems that only need a few tweaks before they achieve dream home status. If you have the budget, you could get a home for $230,000 and spend $20,000 to $30,000 on the necessary upgrades.
Real Estate Outlook for 2022
The housing market is changing daily; with new variants emerging, relocations, and rising interest rates, 2022 could look different from 2021. For now, though, we can sit back and enjoy the strong Fredericton and greater New Brunswick housing market while we speculate on our real estate outlook for Atlantic Canada in 2022. If you’re looking to buy a home, now is the time! Don’t wait until you are priced out of the area to plant your roots in beautiful New Brunswick! Buyers will do well by getting into the market buying a home that ticks the fundamental boxes with only a few changes.
As always, if you have any questions regarding buying or selling a home in the Fredericton area, you can consult with one of our REALTORS® by calling our office at 506-455-1980 or visiting our website; we will be happy to assist you on your homeownership journey.
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