A Change in Spending Habits
Aug 13, 2021 | Buying Real Estate Trends Selling
Lifting Pandemic Restrictions Causes a Change in Spending Habits
I’m often asked how the pandemic has affected the Calgary Real Estate market. As restrictions lift, I’m noticing some new trends among buyers and sellers. the following three factors have really changed the way people are thinking about Real Estate.
YOLO & MUFLT Spending
During the pandemic many home owners decided it was time to purchase a larger home or one with upgrades. They found themselves wondering “what are we waiting for?” The idea that you only live once, or YOLO, drove the housing market to new heights as these buyers decided to move up in the market.
For the last year spending on on travel, socializing, clothing and luxury goods have been put on hold for many people. Since then, we have seen a major increase in these purchases as restrictions lift. People are in a sense “making up for lost time” (or MUFLT spending as I like to call it).
These two trains of thought will continue to keep the real estate market active in the coming months but will also stabilize its intensity. I predict fewer competing offers and less instances of paying over list price as other expenses on luxury items, home improvements and travel increase. However, the price of homes will be maintained throughout the rest of the year.
Staying in Canada
Many Canadians who owned second properties in the U.S. decided to take advantage of the hot real estate market and sell since they were unable to spend any time south of the border. As they cashed in on their investments there was an influx in wealth and now they are more likely to spend it locally. This equity is staying in Canada, and home owners are using the money to move up in the market.
Low Interest Rates
The low interest rates allowed buyers to bump up their budgets. The cost to own a larger or upgraded home is now less than it was a few years ago. In fact, I’ve seen interest rates as low at 1.5% for some of our clients! These low rates help people spend more money.
However, the lower interest rates have had a negative effect on the condo market. After calculating monthly mortgage payments plus condo fees, many first time buyers who might have started with condo ownership are now directly jumping into purchasing a detached home. Their monthly costs are less because of the low mortgage fees.