Navigating Appraisal Challenges in Today's Real Estate Market

Josh Perez • September 4, 2024

As an appraiser, one of the most frequent questions I receive in today's market is whether we're seeing a lot of purchase activity and how appraisal values are holding up against the prices buyers are paying. The truth is, it varies depending on the area and the type of property, but certain trends are becoming increasingly clear.

"I've seen a lot of issues with value, and I'm sure you've experienced some of those issues with me, where purchasers might've paid 1.3 million at the height of the market and now their appraisals coming in at 1.1 or even less sometimes."

One area where we're seeing consistent issues is with new builds. Homes that were purchased at the peak of the market, particularly in 2021 or early 2022, are now facing challenges when it comes to appraisal values. The market has shifted, and in some cases, the price that buyers paid a year or two ago simply doesn't align with the current appraised value.


This discrepancy is particularly pronounced in specific developments, especially in areas where housing developments have sprung up in less traditionally desirable locations, such as Caledonia or Paris. These are places where people might not have wanted to live a few years ago, but due to urban expansion, they found themselves purchasing homes. Unfortunately, these buyers are now finding that the homes they purchased for $1.3 million at the market's height are being appraised at $1.1 million or even less.


When it comes to appraisals, several factors come into play, such as proximity to comparable homes, square footage, and lot size. However, these elements can vary in importance depending on the type of property. For single-family homes, the lot size is often a significant factor, whereas for investor properties or multifamily homes, the number of rooms may take precedence over square footage or lot size.


Interestingly, while the specifics might vary, there's not much variation from lender to lender regarding how these factors are considered. Adjustments in appraisal values are based on open market evidence, and certain features, like in-ground pools, tend to have a consistent impact on value regardless of the individual circumstances. For example, a mid-range home with a pool might see a $50,000 difference compared to one without, while a luxury home could see a shift of $75,000 to $100,000.



In conclusion, navigating the current real estate market can be challenging, especially when it comes to understanding how appraisal values stack up against purchase prices. As we continue to see shifts in the market, it's essential for buyers and investors to stay informed and work closely with their appraisers to ensure they have a clear understanding of the factors that could impact their property's value.

Josh Perez
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Assigning A Construction Mortgage

By Josh Perez • June 11, 2025
One of the benefits of working with an independent mortgage professional is having lots of great financing options! Rather than dealing with a single lender with one set of products, independent mortgage professionals work with multiple lenders who offer a wide selection of mortgage financing options that provide more choice. Increased choice in mortgage products is beneficial when your situation isn’t “normal,” or you don’t quite fit the profile of a standard buyer. Purchasing a new construction home through an assignment contract would be a great example of this. Purchasing a new construction home through an assignment contract can be tricky as not every lender wants the added perceived risk of dealing with this type of transaction. Most of these lenders won’t come out and say it; instead, they add a significant list of qualifying conditions to make the process harder. The good news is, there are lenders available exclusively through the broker channel that have favourable policies for assignment purchases. Here are some of the highlights: All standard purchase qualifications apply, including applicable income verification, established credit, and required downpayment Assignments can be at the original purchase price or current market value Minimum 620 beacon score with no previous bankruptcies or consumer proposals The full downpayment must come from the purchaser and not include any incentives from the seller. As far as documentation goes, the lender will want to see the original purchase agreement signed by all parties, the MLS listing, the assignment agreement signed by the builder, the original purchaser, and the new buyer. The lender will also want to see the side agreement between the original purchaser and the new buyer, including the amended purchase price. The lender will want to substantiate the value through a full appraisal. Now, as every situation is different, this list of conditions is in no way exhaustive but meant to show that assigning a new construction purchase contract is doable while highlighting some of the terms necessary to secure financing. If you’re looking to purchase new construction through an assignment contract, or if you’d like to discuss purchasing a home through traditional means, please connect anytime! It would be a pleasure to outline the mortgage products on the market that won’t limit your financing options!

Bank of Canada Rate Announcement Jun 4th, 2025

By Josh Perez • June 4, 2025
Bank of Canada holds policy rate at 2¾%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario June 4, 2025 The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%. Since the April Monetary Policy Report, the US administration has continued to increase and decrease various tariffs. China and the United States have stepped back from extremely high tariffs and bilateral trade negotiations have begun with a number of countries. However, the outcomes of these negotiations are highly uncertain, tariff rates are well above their levels at the beginning of 2025, and new trade actions are still being threatened. Uncertainty remains high. While the global economy has shown resilience in recent months, this partly reflects a temporary surge in activity to get ahead of tariffs. In the United States, domestic demand remained relatively strong but higher imports pulled down first-quarter GDP. US inflation has ticked down but remains above 2%, with the price effects of tariffs still to come. In Europe, economic growth has been supported by exports, while defence spending is set to increase. China’s economy has slowed as the effects of past fiscal support fade. More recently, high tariffs have begun to curtail Chinese exports to the US. Since the financial market turmoil in April, risk assets have largely recovered and volatility has diminished, although markets remain sensitive to US policy announcements. Oil prices have fluctuated but remain close to their levels at the time of the April MPR. In Canada, economic growth in the first quarter came in at 2.2%, slightly stronger than the Bank had forecast, while the composition of GDP growth was largely as expected. The pull-forward of exports to the United States and inventory accumulation boosted activity, with final domestic demand roughly flat. Strong spending on machinery and equipment held up growth in business investment by more than expected. Consumption slowed from its very strong fourth-quarter pace, but continued to grow despite a large drop in consumer confidence. Housing activity was down, driven by a sharp contraction in resales. Government spending also declined. The labour market has weakened, particularly in trade-intensive sectors, and unemployment has risen to 6.9%. The economy is expected to be considerably weaker in the second quarter, with the strength in exports and inventories reversing and final domestic demand remaining subdued. CPI inflation eased to 1.7% in April, as the elimination of the federal consumer carbon tax reduced inflation by 0.6 percentage points. Excluding taxes, inflation rose 2.3% in April, slightly stronger than the Bank had expected. The Bank’s preferred measures of core inflation, as well as other measures of underlying inflation, moved up. Recent surveys indicate that households continue to expect that tariffs will raise prices and many businesses say they intend to pass on the costs of higher tariffs. The Bank will be watching all these indicators closely to gauge how inflationary pressures are evolving. With uncertainty about US tariffs still high, the Canadian economy softer but not sharply weaker, and some unexpected firmness in recent inflation data, Governing Council decided to hold the policy rate as we gain more information on US trade policy and its impacts. We will continue to assess the timing and strength of both the downward pressures on inflation from a weaker economy and the upward pressures on inflation from higher costs. Governing Council is proceeding carefully, with particular attention to the risks and uncertainties facing the Canadian economy. These include: the extent to which higher US tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve. We are focused on ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled. Information note The next scheduled date for announcing the overnight rate target is July 30, 2025. The Bank will publish its next MPR at the same time.