Drummond Real Estate Group

Dear friends —

Don’t Try to Time the Market 📢

The market is changing. Again. And that’s exactly why I don’t believe you should try to time it.

If you’ve been wondering why the market has felt slower this year, the latest numbers confirm what many of us have been experiencing.

August sales across Metro Vancouver were down 👇 4.6% from last year and more than 20% below the 10-year average. There are still nearly 15,800 homes available for sale, giving buyers considerably more choice than we’ve been accustomed to. The overall benchmark price is now $1.082M, down 5.6% from a year ago.

But for me, the more interesting story isn’t the number of sales or even where prices are today.

**It’s how quickly expectations can change**

**Just last week, we’ve seen another reversal in mortgage and economic confidence. Expectations can shift quickly in response to inflation, bond yields, borrowing costs, global events and a long list of factors that none of us can reliably predict.** Where the experts were predicting steady rates through into 2027, there is now a near consensus that rates will rise, and perhaps 2 or 3 times prior to the end of this year.

And that brings me back to something I say often:

Trying to time the real estate market is a very difficult game to win.

There will always be another rate announcement, another economic forecast, another prediction about where prices are headed and another reason to wait.

The problem is that while you’re waiting for certainty, your own life is still happening.
So instead of asking:

“Is this the bottom?” or “Will rates be lower next year?”

I think there are better questions to ask.

Does the home I’m in work for me today? And perhaps even more importantly:
Will it still work for me 1, 2, 3 — or even 5 years from now?

Your family may grow. Your kids may leave. Your work situation may change. You may want more space, less space, a different location, a shorter commute or simply a different lifestyle.

Those things are real.

And they are often much easier to understand than trying to predict where mortgage rates or home prices will be several years from now.

We are living in a period where economic certainty can change quickly. This week’s outlook can look very different from next month’s. Even the professionals whose job it is to forecast these things regularly revise their expectations.

That doesn’t mean you should ignore the market.

It means you should make decisions with the market in mind — but not make your entire decision based on trying to predict it.

For buyers, today’s conditions may offer more selection and more room to negotiate than we’ve seen in recent years.

For sellers, buyers have choices, which makes pricing, preparation and strategy increasingly important.

But ultimately, the right decision comes down to more than a market statistic.
If your current home works beautifully for your life today and you can see it working for you five years from now, waiting may make perfect sense.

But if your home no longer fits your life, waiting indefinitely for the “perfect” market may not solve the problem either.

Real estate is ultimately about the life you’re building — not just the market you’re buying or selling in.

The market will keep changing.

The question is whether your home is changing with you.

If you’re wondering what today’s market means for your particular situation, We are always happy to have that conversation.

Because the right decision isn’t necessarily about predicting what happens next.

It’s about making a decision that makes sense for you now, while giving yourself confidence that it can still make sense years from now.

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“Fixed rates have come under renewed upward pressure as Canadian bond yields have climbed, with several lenders already raising rates.”🫷

A Note From Shannon💭
"We’re in a very different real estate market than we were a few years ago.

The Bank of Canada has brought its policy rate down significantly from its peak and has held it at 2.25%. At the same time, the housing market has settled into a much slower and more balanced environment. There is still uncertainty around inflation, bond yields, the economy and global events, all of which can influence mortgage rates and housing activity.

There is still plenty of uncertainty.

But there is another side to this market that I think is worth talking about.

Opportunity.

We are seeing more clients take advantage of the changing price relationships between different types of properties.

For some, that means moving from a condo into a townhome. For others, it means moving from a townhome into a detached home. In some cases, the gap between these property types has narrowed enough that a move that once seemed out of reach is now much more achievable.

And that’s an important distinction.

Rather than simply asking, “Are prices going up or down?”, it can be more useful to ask:

“What can I move into today that I couldn’t afford a few years ago?”

We’re seeing the same thing happen geographically.

There are communities that were once outside a buyer’s budget that are becoming more accessible. For some clients, that means getting closer to Vancouver. For others, it means moving into a community with more space, a different lifestyle or amenities that previously came with a much higher price tag.

We’re also seeing buyers look at acreages and rural properties where prices have adjusted and demand is softer. For the right buyer, that can create an opportunity to get considerably more land and living space without taking on the same price premium that existed when demand was stronger.

If you're thinking about selling, timing matters too
For sellers who are already considering a move, I would be paying particular attention to the weeks ahead.

The Bank of Canada’s next scheduled rate announcement is October 28, and it will also release its next Monetary Policy Report.

The Bank has recently highlighted increased upside risks to inflation, and the possibility of a rate increase later this year is back on the table. That doesn't mean a rate increase on October 28 is a certainty, but it does mean we could see expectations and conversations around rates build as we get closer to that date.

We've seen before how rising-rate expectations can cause buyers to pause. Even when rates haven't actually changed yet, the expectation that borrowing could become more expensive can cause some buyers to step back, reconsider their budget or simply wait for more clarity.

For sellers who are keen to make a move, that is something worth considering.

If you know you want to sell, don't necessarily wait for the next rate announcement to make your decision.

The market doesn't always change because rates actually change. Sometimes it changes because people's expectations change.

One thing I would encourage everyone to do right now
If your mortgage is coming up for renewal, don't wait until the last minute to start the conversation.

And if you have even a thought that you might move in the next year, it is worth looking at your financing options early.

Getting your mortgage reviewed and getting a rate approval in place can give you more certainty and, depending on the lender and product, may allow you to hold a rate for a period of time while you decide what you want to do.

It doesn't mean you have to move.

It doesn't mean you have to commit to a purchase.

It simply gives you information, options and some protection from being caught making a major decision at the last minute if borrowing costs change.

For anyone approaching a renewal, I would much rather see you start the conversation early and understand your options than wait until your renewal date is right in front of you.

Of course, every situation is different. Mortgage products, rate holds and qualification requirements vary by lender, so the right strategy depends on your circumstances.

But the broader point is this:

Don't let the perfect rate or the perfect market determine your timing.

Sometimes the opportunity isn't about buying at the absolute bottom or getting the lowest possible mortgage rate.

Sometimes it's about the gap.

The gap between your current home and the home you want.

The gap between a condo and a townhome.

The gap between a townhome and a detached home.

The gap between an urban property and an acreage.

Or the gap between a community that was once out of reach and one that is now becoming attainable.

Those gaps have changed, and we are seeing clients take advantage of them.

There will always be another rate announcement, another forecast and another reason to wait. None of us can know exactly where rates or prices will be several months from now.

What we can do is look at your situation today and determine whether the opportunity in front of you makes sense.

If you're curious about what that might look like for you, let's get a coffee. I'm always happy to talk through your options, run the numbers, provide some perspective or simply lend an ear."

Best,
Shannon
(604) 612-8687
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Mortgages & Borrowing Power -
Updated Canada Mortgage Market — Current Week

Interest Rate Outlook: The near-term rate outlook has become more cautious since July or even since early September. While the Bank of Canada continues to hold its policy rate at 2.25%, rising bond yields, renewed inflation concerns, elevated energy prices, increased government debt issuance and ongoing geopolitical uncertainty = upward pressure on fixed mortgage rates.

The interest-rate outlook has shifted noticeably over the past week.

While the Bank of Canada held its policy rate at 2.25% on September 2, the tone has become more cautious, with inflation risks now moving more clearly to the forefront.

The Bank’s latest deliberations, released September 16, highlighted that inflation has remained around 3% and that persistently elevated energy prices could begin to spill over into broader consumer prices. If that happens, the Bank indicated that a monetary-policy response could be necessary.

This has changed the conversation in the mortgage market. Rather than markets focusing primarily on the possibility of further Bank of Canada cuts, there is now increasing attention on the possibility that rates could remain higher for longer — and, depending on how inflation develops, potentially move higher.

Variable Rates🆙: Variable mortgage rates remain tied closely to the Bank of Canada’s overnight rate and have not moved materially since the September 2 decision. However, borrowers should be aware that the risk profile has changed: further cuts are no longer the clear expectation, and a Bank of Canada increase would put upward pressure on variable mortgage payments.

Fixed Rates🆙: Fixed mortgage rates are influenced more by Government of Canada bond yields than directly by the Bank of Canada. Bond yields have been moving higher, which is creating upward pressure on fixed mortgage rates even while the Bank’s policy rate remains unchanged.

Bottom line 🟰 The key takeaway right now is that the rate outlook is considerably less certain than it was a few weeks ago. With inflation risks rising and bond yields moving higher, buyers and homeowners should not assume that rates will continue to fall.

The Bank of Canada’s next scheduled rate decision is October 28, when its next Monetary Policy Report will also be released.

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We always offer an obligation free comparative market analysis of your homes current value, advice or just a face to face check in on your goals in the years between selling.

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