Compared the the last quarter of 2018, when Lasalle, Ile Bizard and Ville Marie were still buyer’s markets, every single detached home market in Montreal now favours sellers, or is a balanced market.
Due to the market conditions of a seller’s market – heightened competition, rising prices and shorter selling times, home buyers this spring may find it even harder to secure an accepted offer without entering into a bidding war.
How are market conditions measured?
Sales-to-New-Listings-Ratio (SNLR) is a common metric used to determine whether a real estate market is advantageous to sellers or buyers. It compares the number of new properties listed for sale with the number of homes sold within the same timeframe.2
The Canadian real estate association classifies a market with an SNLR of 0-39% as a buyer’s market. In this scenario inventory exceeds demand, which typically increases buyers’ bargaining power. Sellers in these markets may find that it takes longer to sell their property, and price growth is likely to stall or even decrease.
- Top Buyer and Seller Markets for Condominiums, Q1 2019
- Top Buyer and Seller Markets for ‘Plexes, Q1 2019
A market with an SNLR between 40%-60% is considered a balanced market.
A high SNLR over 60% is indicative of a seller’s market. In this scenario, several buyers compete for limited inventory, which pushes up prices and increases the occurrence of bidding wars. In this type of market, sellers hold more bargaining power than buyers do.
Sales to new listing ratios can offer valuable insight into whether it is the right time to buy or sell a home in a particular area.
*All statistics are sourced from Centris data for the first quarter of 2019. Neighborhoods with insufficient statistics were excluded from the list.*
- Best market for buyers (least competitive): Kirkland (42.57%) *balanced market*
- Best market for sellers (most competitive): Mercier/Hochelaga-Maisonneuve (82.61%%)
|Municipality / Borough||SNLR||Average Sold Price||Average Asking Price|
|Rosemont/La Petite-Patrie (Montréal)||65.52%||$607,197.05||$876,301.98|
|Le Sud-Ouest (Montréal)||68.00%||$631,206.18||$729,713.31|
Tips for buying a home in a competitive market
- Start with a pre-approval: A pre-approval strengthens your offer by proving to the sellers that you have already been qualified for a mortgage loan by a bank. In a competitive market, having a pre-approval could mean the difference between winning or losing a bidding war.
- Set up an alert: In a hot market, good deals sell fast. Make sure you don’t miss the perfect opportunity by signing up for an automated property alert.
- Shop around for a mortgage: With interest rates on the rise, buyers are recommended to shop around for the best terms before signing on the dotted line. You can and should compare loan quotes across multiple lenders to find the best interest rates and terms. Over the course of a 25 year mortgage, a .1% decrease in your interest rate will save you $3,756 on a $300,000 home.
- Become a deal-hunter: When the market’s hot, buyers will need to take extra steps to find a good deal. Try signing up for an investor’s mailing list which handpicks properties listed below market value – such as repossessions, fixer uppers and pre-construction offers.
- Work with a broker: An experienced broker will save you plenty of money and time, by steering you away from risky investments, completing a fair market analysis for each considered property, and negotiating on your behalf with the selling agent.
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