As I was waiting patiently for my 2nd caffeine injection of the day, in an outfit Adam Sandler would wear on the basketball court, an incredibly friendly and observant coffee sommelier asked if I had the day off. After I explained that behind this Athleisure, stood before her 1 of the best 12,500 realtors in the Greater Vancouver area, she asked me: “Is the market about to crash?” While a polarizing question, she trusted me – the sweatpant and shirted realtor – to answer her.
There’s no question that prices have lowered, and activity has slowed as compared to the COVID-era real estate market. The simple answer is that it was an incredibly unique time for home buyers. Typically interest rates decline during recessions as loan demand slows, but Buyers during 2020/2021 received the benefits of extremely low-interest rates without an actual recession. With an increase in activity, prices were increasing too. It is my estimation that we borrowed activity from the future. The exceptionally low-interest rates created a sense of almost panicked significance for those wanting to get into the market or cash in on their nest-egg. Suddenly, many people were able to afford homes that otherwise would have had to continue saving: a couple of years of real estate activity got crammed into one
Looking at today’s market, there’s not one bit of me that forecasts a crash. Rather, I see that the future from which we borrowed has come. A healthy reset that may endure for months to come as well, until the balance is resorted (which I feel is already beginning to happen).
The barista pondered what I had said as I simultaneously burnt the roof of my mouth on my coffee and considered burning my sweatpants as well.