Market Update

There has been a significant shift in global events that could lead to a marked improvement in the real estate market. After months of global financial upheaval due to the conflict with Iran and the U.S., the two countries have signed an agreement to cease hostilities and open the Strait of Hormuz, thereby releasing the chokehold on global economies.

The opportunity currently presented may be long-lasting or temporary. Either way, however long the peace lasts in the window, we have increased inventory and pent-up demand released, meaning a sudden increase in active demand.

With increased inventory and demand, we will be in a balanced market, however long the peace remains. Therefore, a balanced market means there is room to negotiate on both the buyer and seller sides to secure fair and reasonable prices and terms. Released demand tends to drive property values higher.

For those who must purchase or sell, now is a good time to proceed. For those who can wait a while, it may be prudent to see if global conditions remain the same or fall apart.

However, increased inventory makes negotiations more balanced, meaning there are not 15 buyers for every property, creating a seller’s market, and there are not 15 houses for every buyer, creating a buyer’s market. A balanced market is very healthy for the economy and provides true negotiation without desperation.

Caution is still required, and mitigating risk through various strategies and tools is a must. If the peace becomes permanent, then the market can be more predictable, and buyers do not have to worry as much about sudden interest spikes and increased carrying costs. However, if the war resumes and oil shortages persist, the property purchased today at a low interest rate may suddenly be much more expensive to maintain.

There are ways to avoid inflation and credit risk. For those who must purchase or sell, now is a good time to proceed. For those who can wait a while, it may be prudent to see if global conditions remain the same or fall apart.

The information in these articles is a summary. Should you have questions or comments, or wish to discuss further, please feel free to contact me directly at (514) 825-8771 or email josephmarovitch@gmail.com.

Joseph Marovitch has been a weekly columnist for Westmount Magazine since 2016

Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children ages 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep-away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible for, Joseph applies this to his present real estate broker career.