Reluctant sellers, hesitant buyers, higher interest rates and an uncertain economy has meant a slower start for the real estate market in 2023, but there are signs things are slowly coming to life as everyone adjusts to new realities. Inventory of homes for sale across most markets in Canada has been at record lows – and as I have said in previous articles, inventory will largely dictate how the market will develop as we get into prime selling season.
In Centre Wellington, both new listings and sales have picked up in the week before my article deadline, so April will probably be a telltale month as to where the market is heading. A spike in activity in larger markets has many realtors saying the market has hit bottom; I am a little more cautious.
There are downside risks to the market still, and preliminary information coming out of larger markets is now showing a steady increase in bank power of sales. Not a good thing. Yet, there are pockets where the market is more competitive and multiple offers are occurring. So, still mixed messages out there.
Pricing on homes continues to be all over the board – some houses selling for more than we expect, and other homes sitting on the market for extended periods not selling and requiring price reductions. Frankly, the market is a bit of a head scratcher at the moment. Some results don’t make sense and are confusing to realtors like us, never mind buyers and sellers.
Most of this is due to fairly low activity levels, and I fully expect things to become more clear as the market picks up. In the meantime, pricing in the market will continue to be volatile. I am a numbers guy, and I will continue to look at the numbers daily to pick up on trends in our local marketplace.
If you are watching or reading the news right now you will be totally confused, as different people are quoting different stats. The market is down, the market is up – both things could be right depending on if you are looking at year over year statistics or month over month stats. And each market could be totally different.
Even in larger markets, one part of the city may be seeing multiple offers and another part of the city could be slow. There are a lot of what I call “micro markets” right now. That’s why you need a local realtor who understands the market where you live.
Even in a smaller market like Centre Wellington, there are differences in demand for certain housing types and areas. Much of the demand continues to be under $800,000. As I write this article near the end of March, 87% of all sales were under $1 million for the month. Our market continues to be slower than markets around us like Kitchener-Waterloo and Guelph.
My recommendation continues to be if you are thinking of selling, get your home on the market sooner than later if you are ready. While buyers are taking their time to make offers and activity has been lower so far, they are out there looking. The risk moving forward is inventory for sale increases dramatically, leading to downward pressure on pricing.
Plus, there are a lot of mortgages coming due for renewal in a few months – where people will see their mortgage rate go from the 2% range to the 5% range. This may have an impact on the market if people have to sell or downsize. The fact is, there are so many unknowns in the market at the moment, it’s hard to make an accurate prediction.
To discuss your real estate needs, feel free to give me a call anytime at 519-766-3716.
Until next month,