Looking into selling your house, but unsure what the dynamics are in the Canmore real estate market right now? Considering the purchase of a property in Canmore, but not sure how things work here?
Choosing to sell your Canmore home or property is a big decision. Its very likely you’ve made some incredible memories with your friends & family there. Maybe you’ve seen a fabulous return on your investment. Now, though, you’ve made the choice to sell. Family goals, portfolios & real estate investments change over time, and moving on to a new phase is part of the magic of real estate ownership. Maybe changes to your real estate portfolio or lifestyle somewhere else is what is bringing you to Canmore, even.
In this article, let’s explore what dynamics effect the Canmore Real Estate market when it comes to pricing homes, fair value, and other forces in the marketplace. As always, I’m available via text, call or email whether you’re considering selling or buying in Canmore. No question is too small!
Recently, I was speaking with the Seller of a home. This gentleman had owned it for the better part of three decades, like any savvy real estate investor would. We dug into the comparable sales nearby, including 3 of the 4 neighbouring homes which were quite similar. This home needed a lot of restoration to be ready for a high-end buyer, but there was still a lot of demand. Looking at the data, and the appetite for the property, the market value of the property was determined to be around $1.4M to $1.6M. Not bad!
At this point, the Seller turned to me, and said, “Well, what about $2M? Isn’t there a way we could get multiple offers to drive up the price?”
There is a saying the the real estate industry – “The longer you talk about price, the higher it goes.”
Often, when people start to think about the price of their home, they start with a number based off of what maybe their neighbour had received for theirs. But then, as the hours wear on, and after a sleep or two, the number begins to grow and grow. In some cases, the price actually is higher than Sellers anticipate. But no matter what, the price will be dictated by the market. You can price your home extremely high if you wish (something For-Sale-By-Owners tend to do). Some agents may even go out on a limb (beyond ambition) to push the price for you – beyond reason.
If you’re working with a true professional, they should try for the highest price achievable because their goal is to help you maximize profit on the sale. But if you price your home at $2M, and then get six different offers at a price of $1.6M (or worse, no offers at all), then the market has determined the price of your home is $1.6M at the moment. It is, however, your choice whether to accept that or not…
This is another interesting piece of free market dynamics that applies to real estate (especially in Canmore). If our Seller above received six offers at $1.6M – they still have no reason to accept this.
Often, when I work with Buyers, we will look at comparable sales of similar properties before making an offer on one they like. We can look and see that perhaps a nearly identical unit sold, just a few doors down, mere months ago at a far lesser price than the unit on offer. Looking at the data Canmore-wide, the price for this property should be at least 10% less. “The Fair Value for this property should be 10% less than the asking price,” the Buyer will say, “so let’s offer that.”
So, as a professional, I will do exactly as my client demands I do. And sure enough: the seller says no. This can be so frazzling to Buyers!
Despite what the data tells you, the comparable property sales, and honestly – common sense – it will be up to the Seller what they choose to accept. I’ve written 5+ offers under asking on a single home, just to offer at the asking price in the end… simply because the Seller would not bend, and ultimately, the demand from the Buyer outweighed what the data said.
So let’s say the Buyer just paid the price the Seller was asking, and it was the highest price EVER paid for X property in Canmore. Wow! Congratulations to the Seller on setting a record! … And the Buyer?
Congratulations to them, too! Why?
In a free market, agreements are made for transactions that are deemed agreeable to both the Buyer and the Seller. So the Seller was happy with the price they got for their home. And the Buyer was happy with what they got for their money.
And how about the highest price ever paid for X home?
I’m personally sitting in a home that was the highest price ever sold for this townhome development. I’m sure people balked at the price when they saw it. This is because what I paid was 400% more than the first sale here, 22 years earlier. But guess what? There have since been sales to the tune of +20% on my value now, too.
Do you want to know how many all-time record highs the S&P 500 logged in 2021? Seventy.
Markets can go down as well as up, though – so always remember – the only people who get hurt on a roller coaster are the ones who jump off half-way through. Make a smart choice you’re happy with, and be ready to stick with it for at least 10 years.
OK – so you want a really high price for your Canmore home. Thats good! Who wouldn’t?
Canmore is a very interesting market for real estate, because we have a lot of natural boundaries that artificially constrain supply. We are bounded on all sides by gorgeous mountain scenery, wildlife, national & provincial parks. The amount of land that can or will be developed in Canmore is finite. Unlike communities like Calgary, Edmonton & Toronto, we can’t just continue expanding outwards. And unlike other places with suburbs, you can’t just “move down the road” and have the same experience.
How about demand? I receive calls daily from buyers who live outside of Canmore. They live outside of our community, province and sometimes even Canada – but they want to own a property here. They want to move here and live the amazing lifestyle we get to enjoy here! Unlike other places in Canada, the demand to live in Canmore is larger than just our community.
High Demand + Low Supply = upward pressure on prices. But how about Seasonality in the Canmore Market?
People love to buy and sell houses in the Spring! I don’t know why – but this seems to be a pervasive phenomenon in real estate. Personally, I think most people are ready to move in the spring, which means they will list their homes. Typically in Canmore, we will see around ~20 new listings per month, except from March through May, where we can see 80+ listings per month. Wow!
What if I told you Spring isn’t (always) the Best Time to List? In our discussion of supply and demand, we saw low supply and consistent demand puts upward pressure on prices. So when is supply lowest, even for Canmore? Winter & Fall.
Spring is a fine time to sell your Canmore home, but it is also the best time to be a Buyer; because Buyers have more choices. If they have more choices, they are less likely to buy your home. Thankfully there are also more buyers overall; but the decision become easier & quicker to make in off-seasons, when there are lots of Buyers scrambling for a handful of properties.
More than just supply & demand effect the Canmore real estate market, though.
How about interest rates? These aren’t as important as one might think. Lots of buyers tend to pay cash depending on the property; interest rate hikes affect the entry point / new buyers in the market the most (unfortunately).
Bidding Wars? While these can happen, especially for highly desirable nightly rentals & detached homes, they aren’t the norm. Buyers in Canmore aren’t “conditioned” like buyers in other hot markets (Toronto). In these places, buyers will go in hundreds of thousands over asking price, with no conditions at all. This isn’t typical in Canmore, thankfully.
New Developments? There are some new developments that trickle online each year. As a Seller though, these aren’t major competition for you. It’s important to note that the best areas for homes were developed first, in most cases. So new supply often doesn’t offer much more in terms of land or access.
If you have questions about the value of your home, your options as a buyer, or the Canmore real estate market in general – don’t hesitate to reach out to me. I’m always available via text, call or email to answer your questions – no matter how small. Making decisions in real estate can be hard! Having a qualified professional in your corner will always be the best way to ensure your interests are looked after in this important transaction.
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Feel free to call, text, or email Dan today for no-pressure advice,
tips and insights into the Canmore, Cochrane & Banff real estate market.