05 Jul 2019

Will Houses for Sale in Sarnia Drop in Price?

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Will Houses for Sale in Sarnia Drop in Price?

The question anyone in the Sarnia real estate market is wondering is, will houses for sale in Sarnia drop in price soon? That’s because month after month, record numbers are being reported across Sarnia-Lambton. So, prices remain high, inventory is low, and buyers are finding it difficult to enter the market. Everyone, from buyers to sellers to Sarnia real estate agents, is wondering if the prices will start to fall. And that has people thinking differently about leaving or entering the market.

The short answer is, it doesn’t appear that houses for sale in Sarnia will see any price drops in the near future. Barring some unforeseen change in the Sarnia real estate market, prices should remain the same. That’s because as said, there is a shortage of houses for sale in Sarnia and too many buyers.

Sellers Can’t Become Buyers

That’s music the ears of sellers. However, if they are also looking to move, it creates a circular problem.

Sellers are afraid to enter the Sarnia real estate market for one main reason – where would they move? Sellers have to go somewhere unless they are leaving town. So, the problem is, if they need to upgrade or downgrade, they need to also become a buyer in a hot market. Many sellers aren’t listing until they buy first. That’s because they don’t want to get into a situation where they don’t have a place to live as their house closes, but they haven’t found somewhere to live.

So, on top of the first-time homebuyers, you have established homeowners looking first before listing their house. And with low inventory, it creates a lot of competition in the Sarnia real estate market. With not a lot of houses for sale in Sarnia, it can take some time before a homeowner becomes a seller. And when they do, there are plenty of people waiting to view that house and get a quick sale done.

New Residents Looking for Houses for Sale in Sarnia

Sarnia-Lambton is becoming a hotbed for homebuyers and families who are looking to escape the higher prices of the GTA. In fact, despite higher prices, GTA residents see Sarnia’s hot real estate market as a cheaper alternative. So, many people are considering living in small communities such as Sarnia to become homeowners, rather than paying incredibly high prices in Canada’s largest cities. And that is creating more buyers and driving the prices of the houses for sale in Sarnia up. Again, it’s all back to the number of houses on the Sarnia real estate market versus the number of buyers looking.

So far, the average sale price in Sarnia is $329,000, much lower than any GTA homebuyer could expect. And the type of house someone could buy for that in Sarnia versus the GTA is widely different. Basically, we’re talking houses versus small condo units. So, many GTA residents are looking at smaller communities as a way to get the white fence and backyard and away from being surrounded by concrete.

How Could Prices Drop?

With new lending regulations put in place, it has become more of a challenge for buyers to get large mortgages. Coupled with higher interest rates across Canada, homebuyers could find it difficult to get a lender to give them the money they need. And that has some sellers scared that the hot Sarnia real estate market could dry up. However, currently, Sarnia is seeing a lot of movement in the $200,000 to $300,000 price range, which is more affordable. Whereas in the GTA and other major cities around Canada, buyers who need over $500,000 to get into the market are struggling to get the mortgage they need.

If, however, there are more changes to lending rules, and Ottawa decides to add more regulations, things could change. Places like Vancouver and Toronto have struggled with foreign investment. But regulations have helped to cool the market off and give local buyers a chance. That means fewer people would be looking to move to a smaller community if something is available in their own city. And there is an election this year, so changes could be coming depending on how Ottawa looks after everyone has cast their ballot.

Municipalities Looking to Develop

Much like how residents from the GTA are moving to smaller communities, residents in Sarnia are looking to do the same. So, that means, looking at places like Petrolia, Mooretown, Lambton Shores and Oil Springs. That’s because some of these communities have struggled with low populations. So, some have taken a page out of Watford’s playbook and decided to start buying up land and selling them to developers.

They serviced the residential land upfront and cut costs for developers, before getting them back later. Firstly, it’s risky for these small towns and rural areas to take on the expense. Secondly, there is no guarantee a builder will be found. However, it’s a risk many small towns are taking to increase their population. That’s because the only way to increase the population is to increase the number of homes in the town. And then entice people to move away from places like Sarnia, for an even smaller town feel. It’s worked for some communities, and with house prices in Sarnia being high, it’s another option for people looking to get into the market.

What Can Buyers and Sellers Do?

With prices still high, depending on what side of the transaction you are on, you can either wait or enter it quickly.

If you’re waiting for the right time to get the best price, the Sarnia real estate market is primed to give you the best return. Of course, that’s based on the quality of your house and many factors, but market-wise, it’s strong for listing.

For buyers, it comes down to your own situation. There are listings available and a strong Sarnia real estate agent will be on the lookout for your home. You just need to be ready to view on a moment’s notice and be prepared to come in with a strong offer. You may only get one shot at making an offer, so you have to make it count. However, it still should be an educated offer, and we are Price & Associates realty will help you with making the right offer through proper research and our years of experience. Prices for the houses for sale in Sarnia will drop, but while the Sarnia real estate market is hot, go into any transaction with the right knowledge and real estate agent behind you.