You’ve probably seen the “for sale” signs all over Virden in front of houses that have been on the market for months, some of them even years.
The housing market seems to have slowed to a crawl - what realtors call a “buyers market”. And in the Oil Capital of Manitoba, home values fluctuate along with petroleum prices.
Virden real estate agent Kelsey Gerrand says, “We did see a large influx of workers with the oilfield who had purchased properties in town.
“Now that oil has slowed, many of those homes have gone back up on the market for sale.”
In fact, as of mid-July, Gerrand says there were 96 homes listed for sale in Virden. For a town with only about 1,400 private dwellings, that’s a lot of real estate competing for fewer buyers.
Buying high, selling low
If you bought a house in a resource-producing region like southwest Manitoba at the peak of the market, say 2013 or 14, you may lose money by selling now. On the other hand, if you try to get what you paid, the property can languish for a long time.
The average selling price this year on Virden homes, says Gerrand, is almost a quarter of a million dollars.
“When a home is overpriced, buyers will look past it as it doesn't compare to other homes that are priced lower,” she says. “This can lead to some properties sitting on the market for some time.”
And there’s another challenge.
Gerrand says one of the biggest problems facing home buyers right now is their ability to get a mortgage.
Banks and other lenders use something called a benchmark rate to decide who qualifies for a variable-rate mortgage. At press time, that rate was at 5.34 per cent (it fluctuates).
A borrower has to prove to the lender they can afford a mortgage payment at that benchmark rate, even if the rate of the actual mortgage is only 2.25 per cent.
People denied a mortgage might have to consider renting, and with all these empty homes up for sale it shouldn’t be hard finding a place to rent, right?
If you’re lucky, you might find a seller willing to rent just to get some revenue flowing. But, Gerrand says, “some sellers have had negative experiences with tenants or they have high-end finishes in the home like bamboo floors and would hate to see them damaged.”
And with rents in Virden being priced relative to the home’s boom-time value, even renting can be costlier in a resource-driven market.
How to sell in a slump
In a highly competitive market, there are things sellers can do to give their property an edge, says Gerrand.
“My best advice for sellers is take the time to have your home market ready, it can make such a huge difference!
“That means de-cluttered, de-personalized (hide the trinkets) and complete all of those little projects. Touch up paint or scuffs on walls, make sure the lawn is mowed and the yard cleaned.
“The look and feel of a well maintained home is something buyers appreciate.
It starts before the buyer even gets out of the car. If your home makes a positive first impression from the curb, potential homebuyers will want to see inside, according to Gerrand.
“Remove weeds, clean up garbage cans and recycling bins, re-seed or lay sod in dead patches of grass.
“Remember to clean the windows and siding, and have a bright and inviting entry way.”
Gerrand says simple, inexpensive fixes can go a long way to boost curb appeal and attract more attention, even in a competitive market that has more sellers than buyers.