Ryan Out Loud - This Week in Housing (June 6th, 2022)
We're going to be talking today about investing in real estate through REITs. We're going to look at how many months of inventory we have coming on right now. What's the new interest rate doing to people looking to buy? We'll also talk a little about the municipal election we had. That's This Week in Housing on Ryan Out Loud.
REITs
So the first thing we talk about, a lot of people talk about getting into real estate investing. And it's really scary for a lot of people, especially looking to get into real estate, into the commercial side of investment. And there's a good thing you guys could talk about. And it's a great article about the pros and cons about investing through real estate, through a REIT.
So there's a lot of public funds for this. It's another way to get into real estate investment without any risk or sorry, not any risk, but as much risk and at a lot less of a threshold for how much capital is going to be required as well for you to get into that.
Temperatures are Rising... so is Home Demand
So a great way Money Sense Magazine, great article they dropped here that you could read into as well. So, you know, last month we looked at this article from Blackburn News and says an increase in real estate listings wanted as temperatures rise. If you're looking to list your home shoot me a call today: (226) 778-0747.
Months of Inventory
You know, we looked at the month of April, we saw four months of inventory. For the month of May, we saw three months of inventory. And just for a bit more perspective for people with that means; zero to three months of inventory is a seller's market. Three to six months is a balanced market. And we're seeing that 6+ months is a buyer's market.
So we're seeing right now with that inventory and we talked about this early as market update is, you know, not every home is going into that wild bidding war and seeing prices go over, it's a bit less predictable on what's creating a bidding war as well.
Pro tip right now with the more inventory: say your budget is $400,000, you can't find anything in it, you know. Ask your realtor. Look, for listings that have been on the market for 30, 60 days now and maybe they're priced at $410,000 for $420,000. There's a possibility that you can maybe negotiate that price down.
Provincial Election
So we had an election last night and conservatives got in but it was kind of interesting because it was the fewest amount of voter turnout I think they've ever historically seen.
I think it was only a 40% voter turnout So the question is what's that going to do for housing in the province of Ontario? Are we going to see any changes, any changes to the Landlord Tenant Act? Is there any changes maybe into the building process? You know, as I can tell, that's going to filter down to the municipality level of getting building permits and all that great stuff as well.
Interest Rates
And, you know, it's interesting, you know, so home sales dropped in April. Here's another great article by CREA. That's the Canadian Real Estate Association. And they as rates go up, I think the big thing right now, people need to realize this. You know, if you're under maybe 30, you don't know anything else but these cheaper rates. But let's just look at, you know, the history of over the decades of interest rates.
In the seventies the average rate was 8.86. The eighties 12.7 was the average rate nineties, 8.2%, 8.12%. From 2000 to 2010, the average rate in North America was 6.2% and then for the tens, the average rate was 4.1%. So, in perspective rates aren't too bad right now. You know, I mean, if someone's waiting to get in the market because you think the prices might drop a little bit, just know we can't predict where pricing is going to go. But we can predict a bit more is that most likely rates are going to go up. And if you're waiting to get in the market right now for pricing to go down, if pricing does go down, I can almost guarantee you that rates are going to be higher.
And the money that you're saving on the house price being lower ain't going to save any money. Actually, it cost you more because rates are going to cost more. Your monthly payments could be more than you saved on the house and your cost of borrowing over the time that loan. It's going to skyrocket compared to if you just want to go into the housing market as well.
Fire Safety
So a couple of things right now, too, is this is fire. You know, I put this article here. It's it's very sad it happened. But, you know, fire safety right now, you know, especially that we could be barbecuing more having those more bonfires you know, make sure your house has working smoke detectors. Check those batteries. Do you have a fire extinguisher where you're cooking food? And make sure you're using proper safety around the stove, especially the kids?
You know, simple thing of just turn the handles in. And that's why I put this article here was, you know, it's a sad story, but it's a good reminder of what could happen to your house as well if you're not practicing proper fire safety.
References:
https://www.moneysense.ca/s/InvestingWithReits
https://blackburnnews.com/sarnia/listings-wanted-temperatures-rise
https://blackburnnews.com/sarnia-lambton-ontario-election
