July 2021 Market Update

About 25 years ago we noticed trends that seemed predictable in the Real Estate Market. I had a theory about what was happening so I hired a wonderful lady who was a retired librarian to do some research for me to see if my theory was correct. We discovered that there are 5 statistics that are all interconnected. Those statistics are Sales, Inventory, Absorption, Days on market to sell (DOM) and Prices. We investigated and tracked those 5 statistics in 8 major centers across Canada. Some cities had better historical data than others. In Toronto we could go back 30 years.

What we discovered was ubiquitous in every set of data that we looked at. There were a lot of other less absolute discoveries but in every case and in every marketplace we found the following. If there was a period of 4 months or more of increasing inventory and DOM and falling absorption it would be followed by a statistically corresponding downward pressure on sales and prices. Sometimes the downward pressure on prices was simply that the rate at which they were rising was reduced. Corollary, we found that if there was a period of 4 months or more of decreasing inventory and DOM and increasing absorption it would be followed by a statistically corresponding upward pressure in sales and prices. For years following this research this allowed us to accurately predict the markets at least one year in advance.

This so-called “algorithm” was always true and verifiable with one exception: if there was a major negative world event, everything fell apart for a period of time. For instance after 9/11 the fear of the world apocalypse made people pull back from virtually everything for a short period of time. Conspiracy theorists came out of the woodwork just like they have now. About a year after 9/11 the markets fell back into their regular cycles. The reason I bring this up is that the pandemic was the next major, negative world event. In April and May of 2020 it looked like the Real Estate world was going to end. The top economists in the country were predicting a major drop in prices that would not recover for at least 2 years. They were predicting a 20% drop in prices. I was one of the people that was in that mindset. The only people who thought the markets would maintain were uninformed optimists that were hoping. We now know that the rebounding market was miraculous with record breaking statistics. We have seen more price increases and multiple offers than ever in history. And now we see the markets settling down. The absorption is down to 70% in the North and Central and 50% in the Shuswap. This is high but not ridiculously high.

Traditionally June has higher sales than any other month of the year. This year, in all 3 zones June sales are down. However, make no mistake, the market is not collapsing and no bubble is bursting nor is it going to burst. The market is and will continue to “settle into” the regular cycle. The cycle will be different because there are new forces pushing it like interest rates and the exodus from cities and office buildings to less populated areas. But it is settling. We will see a continued strong market till at least the end of 2021 and likely through 2022.

Warmer weather and longer days means you’re spending more time outside, so spend some time making your backyard into your dream oasis. Since the pandemic, the backyard has been a place to relax, exercise, explore new hobbies, connect with friends and family, and much more. Elevate your space, whether it is a tiny balcony or abundant garden, with these 2021 backyard trends so you can enjoy your private area all summer long.

1. Flexible Furnishings

With social gatherings being mainly held outside, multipurpose furniture has been a big trend in 2021. These pieces may have hidden features, such as storage or coolers, or can be converted into another use, like stools transforming into a side table. Multipurpose furniture makes hosting socially distance gatherings easy. You can store commonly used items, drinks and blankets to have ready whenever your guests need them without even needing to get up!

2. Private Retreats

Backyard privacy is an increasing priority in 2021; however, not every home comes with the luxury of built-in seclusion. There are many ways you can add privacy to your outdoor space, from extra greenery to umbrellas, screens or pergolas. Depending on your space any of those covers will help provide privacy from your neighbors, shade you from the hot sun, and shelter you on the colder days.

3.  Social Curb Appeal

Although this may not be an addition to your outdoor space, 2021 has made front yards the popular hangout spot for social-distanced gatherings and quick hellos. The front area is a perfect space to sustain social connections while staying safe. Try adding a comfortable bench, a bistro set, or a porch swing to make your front yard warm and inviting.

4. Outdoor Cooking

With everyone spending more time outside, outdoor kitchens are also a rising trend. From a portable BBQ to a full independent kitchen, these outdoor cooking facilities increase convenience and allow you to enjoy the sunshine for longer. And don’t forget about outdoor dining! Add furniture so you can savor the meal in your outdoor space as well.

5. Tasty Gardens

Gardening began to be very common last year with people looking for new hobbies and ways to get outside. This year, we see that trend increase with more people who are climate conscious. Edible gardens can come in all shapes and sizes, so they are perfect for any backyard or patio no matter the size.

6. Outdoor Entertainment

Incorporating technology into the outdoor living area increases in popularity every year. People continue to find ways to bring the entertainment outdoors with music, tv, and even work from home stations. Try adding portable speakers to play your favorite album and compact projector to stream the latest movie outside. Be sure to include a Wi-Fi booster so your connection stays strong while entertaining in your backyard.

7. Season Extending Solutions

Canadian summers can be very short-lived. Fire pits and heaters are the perfect solution to keeping you and your guests warm even when the sun goes down, or as the days get colder. If you are looking for a less-costly investment, use outdoor rugs and throw blankets to add extra warmth.

8. Ambiance Lighting

Another great way to extend your time outside is through lighting and this is a trend we never want to see go away. It lights up pathways for safety, accents your favorite garden piece, and sets a beautiful ambiance. Adding outdoor lighting will expand your backyard living and entertaining. When choosing your lighting opt for lower-watt, golden bulbs for a peaceful atmosphere.