5 Bullet Friday...Inventory is Dropping ??

Welcome back Sudbury! ??

Take a peak at the numbers from the last few weeks!

Here are my 5 takeaways this week:

??This week saw a market jump with 32 sales, indicating that last week's sales numbers were the anomaly. However, conditional deals were down, suggesting that there are more unconditional offers in the market rather than a slowdown. The % of competing offers supports this, with 66% of deals happening this week in multiple offers. Despite historically having a decent number of total listings available, we continue to see fewer new listings every week, which is surprising. Last year at this time, we were closing in on 70 new listings, and the year before we were getting close to 90. This could be a result of the late winter we had this year, pushing the spring market rush for sellers to list their home back a month or so. Alternatively, we could be following the patterns of the rest of the country, where we are seeing record lows for inventory.

??Why is the inventory dropping across Canada? It's a question that's been on many people's minds, and I've been preaching the message for a while. To summarize my thoughts, early 2022 prices peaked as interest rates started their historical run-up. Most buyers didn't buy at the peak, but they would have felt wealthier if they owned a house and saw prices increasing dramatically as they did over the pandemic. However, when the market pulled back, people started feeling that their net worth has declined, even though the bulk of it is in equity. Moreover, rising interest rates have made things more complicated for homeowners preparing to renew their mortgages in the next couple of months or years. This is making move-up buyers less likely to list their homes as they don't have the equity to step up to the next size of family home. All these factors are playing out in fewer homes for sale and less supply in the markets, and it's becoming clear that the cost of rising rates and the preparation buyers must do to renew their mortgages are other significant reasons for the shortage of sellers.

??One of the biggest shocks this week was the # of offers on some of the properties we have competed on.?There was one place in Minnow Lake that had 17 offers on it this week! Just last night we were one of 7 offers in Lively; and this seems to be the norm for properties across Sudbury. If it's a new listing and its priced well, it's getting a crazy amount of activity.?With this much demand, it makes me truly believe we are going to see a pretty significant shift pushing prices up in the short term. I’ve said it for months now that we are in a supply-driven marketplace, and with supply decreasing and demand currently at the level we are seeing on the various listings, all signs point to an increase in values.?

??The latest news on inflation is that it fell close to 4% this week, marking the smallest increase since August 2021. It's a win for Tiff Macklem who decided to halt rate increases in the past few meetings, and it seems like the right call as inflation continues to cool down. However, getting inflation down to the Bank of Canada's target rate of 2% may still be a challenge, especially with the rising wages to keep up with the cost of living. The recent strike by federal workers is a clear example of this. As the cost of living continues to rise, more money is in circulation, leading to increased asset prices like homes. Despite the chaos in the marketplace over the past year, we seem to be headed for a soft-landing, which is the best-case scenario for the economy.

??Where does the market go from here? In the short to mid-term, low listings and high demand will cause prices to rise even further. Recently, we have seen new records set for sale prices on offer dates, which will lead to higher sold values for sellers who are comparing their homes to those in their neighbourhood. As long as buyers continue to support these higher asking prices, we can expect the average sale price of around 425k to move towards the $half-a-million mark. This was a bold prediction I made a few weeks ago, based on the current supply and demand shift in the market, and one that I still firmly believe will come to fruition as we progress through 2023.

Those are my thoughts on the market this week. Let's connect next week to see my thoughts!