National Real Estate Market Update for 202
When the Bank of Canada announced in early March that it would put additional interest rate hikes on hold, the country's once-frozen housing market began to thaw. Since then, Canadian home sales have bounced higher than expected.
But though the market is clearly heating up, many homeowners are still putting off listing. After successfully riding out the past year's turbulence, some homeowners are waiting for prices to more fully recover. Others are holding back because they are unable to port their mortgages and feel beholden to their existing, lower mortgage rates. As a result, real estate activity isn't nearly as robust this year as it might have been had more sellers listed their homes.?
So what can we expect from the Canadian real estate market in the coming months and years? Here are several key indicators that help to paint a picture of the market and where it’s likely headed.
HOME SALES ARE PICKING UP FASTER THAN EXPECTED
Despite still-high mortgage rates and pinched affordability, a significant number of home buyers are showing up anyway and placing offers. As a result, home sales jumped by double digits in April, according to the Canadian Real Estate Association (CREA), climbing 11.3%. So far, that's the third monthly increase this year. Historically fast population growth and a sharp increase in rent prices are helping to push up sales.
What does it mean for you??With a warming market, it's important to start your home search prepared. We can help you evaluate your options, strengthen your offer, and make an informed purchase. And if you plan to sell, be sure to choose an agent who knows how to draw in qualified buyers. Reach out for a copy of our multi-step Property Marketing Plan.
PROPERTY VALUES ARE STABILIZING
Prices are down year-over-year, but they haven't fallen nearly as much as some analysts speculated. In April, the actual national average sale price was down just 12.3% from the same month last year. Even more significant: home values have moved higher, as more buyers emerge from the sidelines] A tight housing supply is putting upward pressure on prices, while sharply higher rents have helped make mortgage payments more attractive.
What does it mean for you??Prices have softened in certain market segments compared to last year. We can help you find your next home and negotiate a great price. If you’re a homeowner, property values are picking up again thanks to demand outpacing supply. Reach out for a free assessment to find out how much your home is currently worth.
LISTING INVENTORY IS LOW, BUT NEW CONSTRUCTION IS ON THE RISE
Tight inventory is one of the biggest factors impacting the housing market, agree experts. In fact, the CREA says that inventory is tighter now than it's been in decades. Reluctant sellers are a big reason, but sluggish home building is also a major factor. Housing starts have been weak for much of this past year. But a springtime burst in activity led to a 22% jump in April, according to the CMHC, renewing hopes that builders may still be able to overcome this year's higher rates.
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What does it mean for you??Inventory is tight, but less frenzied competition compared to last year means more choice and negotiating power for buyers. We can help you explore both new and existing homes in our area. Sellers are enjoying reduced competition right now, as well. However, the longer you wait to list, the more competition you’re likely to face. Reach out to discuss your options.
MORTGAGE RATES HAVE TRENDED DOWN
Average mortgage rates are still higher now than they have been in years, but they have generally trended down since the beginning of the year. As a result, buyers willing to commit to a three- or five-year fixed-rate mortgage are finding better deals. Those hoping to see rates fall more significantly though, are likely to be disappointed. The Bank of Canada has signalled that it is unlikely to cut its benchmark rate anytime soon.?
What does it mean for you??Mortgage rates have trended down, which is great news for buyers. We can help you negotiate a great deal and potential seller incentives. If you’re planning to sell, this is good news for you too. Reach out for a consultation so we can help you chart the best course.
WE’RE HERE TO GUIDE YOU
While national real estate forecasts can provide a “big picture” outlook, real estate is local. And as local market experts, we can guide you through the ins and outs of our market and the issues most likely to impact sales and drive home values in your particular neighbourhood. If you’re considering buying or selling a home, contact us now to schedule a free consultation.
The above references an opinion and is for informational purposes only.?It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs.
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