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Is there a pricing bubble in the Winnipeg real estate market? This is a common question right now, with good reason. In 2021, our market has seen a 15% growth, which is simply not sustainable.
However, I’m here to make the case that we aren’t going to see a crash any time soon, and leave you feeling confident in the future of Winnipeg’s real estate market. Looking back at historical data, from 1977 to 2021 our market has increased yearly by 5.3% on average. This kind of reliable growth shows that our market is very steady and stable.
You probably know at least one person who has made an offer on a house, and then become embroiled in an insane bidding war that results in the home selling far above asking price. Perhaps this is an experience you have had yourself. While this is a stressful thing to go through, we can clearly see that these bidding wars are driven by three main factors:
LOW INTEREST RATES
In Canada, interest rates are at an all time low, encouraging those who were on the fence about purchasing a home to pull the trigger.
LOW SUPPLY OF GOOD HOUSING
There just are not enough people willing to sell their homes right now, creating a short supply of good houses on the market. As more and more people become comfortable selling, we will see the market stabilize.
EXTREME HIGH DEMAND
Everyone wants to buy a home right now! As more and more of the workforce has had to set up home offices and conduct their business from their kitchen or living room, and people have had more time to invest in DIY projects, spacious houses are looking much more attractive than small apartments. This sudden lifestyle change–coupled with low interest rates–has caused a rush to buy, creating an intense demand in the market.
But we are not going to see a sudden crash or bubble burst in the future. Instead, we are going to see prices plateau. As we gather more data about what homes are selling for, homes will be priced more reasonably right out of the gate, discouraging bidding wars and massive spreads between list and sale prices.
For instance, right now a house that is priced at $399k will trigger a bidding war and sell for $485k, resulting in a price difference of $86k. As the market stabilizes, that same home may be priced at $460k instead. It may still go into multiple offers and sell for $485k, but we aren’t going to see the huge spreads that we are seeing now.
If you want to chat about how this information can relate to you, call or text me at 204.891.3083.