Fall Market Finally Picks Up

Home prices jumped up 3% in September and another 2.5% in October, gaining back most of the losses from the summer (now down 2.4%). Perhaps more encouraging in October was that sales volume finally picked up. While Septembers numbers were in line with the summer which was very concerning, October sales increased by 33% vs. September and 44.4% vs. last October. Those are both very encouraging signs which hopefully begin to bring some balance to the market.

Why the sudden pickup in activity? The truth is that Canadians still want to own homes. Many have been sitting on the sidelines patiently waiting for prices and/or rates to drop. With the anticipation of and the actual announcement of the .50 basis cut, some took that as a sign of the bottom of the market. That still remains to be seen as inventory levels are still much higher than last year and we are heading into the slower months of the year.

Something to be a little weary of is that these rate cuts directly only impact variable mortgages. Variable rates are dropping BUT when you factor in fixed rates were hovering in the low 4s, this literally does nothing for purchasing power and affordability. Yes, it's heading in the right direction and yes, it's good for buyer sentiment. In fact, bond yields which fixed rates are based off, are actually up since the last rate announcement. Regardless, we are headed for another .25 or .50 cut in December and possibly January. This should bode well for the spring market which has been fairly healthy the past few years.

The other major thing to watch will be if inventory begins to contract. In October, active listings and new listings started to trend down. Typically, in November and December inventory contracts as fewer people list their homes and many on the market take their homes off.

Things could be lining up nicely for a stronger spring but that doesn't mean the craziness of 2022! If anything it should mean moderate growth coupled with a more liquid market! In other words, a healthy and balanced market!