Pent up Demand – and how it may affect your move

Pent up Demand – and how it may affect your move

I have always told clients that there are many reasons why people want to make real estate transactions:

  • Buying a first home
  • Family formation
  • Upsizing for a growing family
  • Getting closer to changing employment
  • Finding a more preferred physical and/or social environment
  • Investing
  • Downsizing
  • Splitting up
  • Getting together
  • Financial reasons – good and bad!
  • And the list goes on…

Within our domestic market there are myriad reasons why people want to buy and sell real estate. Sometimes the market is very fast, like 2016 and it is easy to sell but hard to buy, and sometimes it is slow like right now where it is more challenging to sell but there are many good opportunities to buy.

Every year there are a reasonably expected number of parties that will want to buy and/or sell for all these various reasons – this may be referred to as a random or stochastic process.

When sales levels drop below those expected numbers for whatever reasons it means some of these parties may not be making the moves they would like – deferring them to future periods, possibly when they perceive the real estate market will be ‘better’.

This behaviour suggests that potential transactions may be delayed temporarily, leading to a build up of latent or ‘pent up’ demand to make those moves.

Here is a link to an article by BC Real Estate Association Chief Economist Cameron Muir that addresses exactly this topic. In this example Muir demonstrates how the current ‘stress test’ for mortgages is may well be creating a pent up demand that will eventually want to be satisfied.

This may mean many different things to those of you in various life stages, financial positions across a wide scope of needs/wants preferences.

Understanding these concepts and their implications will most certainly help you to make better decisions for developing and implementing your future real estate strategies.

I make myself available to clients to give insightful advice and to add value to their individual real estate strategies.

Call me to bring professional and experienced ‘added value’ to your real estate needs.

call/text:  604.603.8538

or email:

Dean Bauck PREC - Company