A lot happened last year: we transitioned from one of the hottest real estate markets in history to one of the slowest. We also saw at the end of last year and
this month, various legal changes designed to assist renters and home buyers. Please see last month's newsletter for information on those legal changes HERE
December housing numbers
Interest rates and lack of buyer confidence continue to push sales and prices down. While interest rates are still very low historically speaking, many buyers have not yet adjusted to the rapid increases. We are
likely to see another rate increase coming up and potentially more to come given what is happening with inflation.
We will see this month what happens with the provincial Buyer Rescission Period (allowing buyers to back out of otherwise binding contracts) and the federal Foreign Buyers ban. Both of these measures are now in place.
Most predictions for our market are not optimistic right now. However, there are still significant gains to be made for sellers who have not bought in the past few years AND right now buyers can actually find a home much more easily than has been the case up until mid 2022.
As far as the stats go, in December we saw:
-sales were down 51.8% from December 2021
-sales were down 19.8% from a month earlier, November 2022
-sales were 37.7% lower than the 10-year average for December
-the number of homes listed for sale was up 41% when compared with December 2021
-the number of homes listed for sale was down 19.6% when compared to a month earlier, November 2022
-there were 28.5% more homes on the market at the end of December 2022 than there were in December 2021
-detached home sales were down 50.8% from December 2021
Annual Numbers 2021 vs. 2022
If we compare the entire years, 2021 and 2022, the sales in 2022 (even factoring in the very hot market in the first quarter) were down 34.3% from those in 2021. AND sales for 2022 were down 13.4% below the 10 year average. Prices are down an average of 9.8% over the past 6 months BUT this varies based on home type, location and price point. Detached homes are faring the worst with only 12.3% of detached homes selling as compared to just over 20% of apartments selling.
The Benchmark price for detached homes is down 11.4% over the past 6 months whereas it is down 6.9% for apartments. Again these numbers vary based on location and other factors.
When you look at the last six months sales and price numbers, obviously things are getting progressively worse for sellers and better for buyers and investors. However, as I mentioned at the outset, most sellers are still doing very well on the tax free gains they can achieve if selling their principal residences. It is impossible to accurately time the top or the bottom of the market; all we know is that the most recent peak has passed and the bottom is not likely here yet.
As I have said before:
-those who are upsizing should do very well now as the best values are in the higher price points. So even if you sell for less than expected, moving up you will be buying for even less-the gap is key.
-if you are downsizing, at this point your price has not gone down as much as it is likely to-so time probably is not your friend (i.e. if you plan to sell in the next 2-3 years, sooner is probably better if you are downsizing or cashing out).
-for those doing a somewhat lateral move, if you are buying and selling in the same market, it usually all balances out.
As always, I am happy to discuss your individual circumstances. Everyone's location, type of home and personal situation needs to be considered for real estate planning. If you have friends or family struggling with what to do in this
market, please tell them to call me to discuss. Advice is free-you/they need not be currently buying or selling!
Happy New Year!