Prices Continue to Slide

Talk about a slow summer! Sales have been very low and that is an understatement. Compared to the past 10 years, sales were down apx. 32%! Prices fell another 3% this past month and are now down 7.6% ($87K) since June.

It is now taking almost 1.5 months before a property sells. This is a far cry from the week it used to take at the height of the market. Sold prices on average are now less than asking which means buyers are able to negotiate more.

One small positive for sellers...August finally saw some slowing down of inventory growth as active inventory trended towards 22,000. However, two weeks into September, we are back to over 25,000 in active inventory. The gap between active inventory and sales will likely influence which way prices move.

A few notable positives for sellers and sentiment in general:

• Inflation hit the 2% target this past month and perhaps just as important, the US Fed cut by 0.5%. This is important as it should give the Bank of Canada more confidence to continue cutting, and perhaps faster than anticipated as devaluing our dollar is less of a concern.
• The Federal Government announced two new measures to improve 'affordability' today - 1) increasing amortization for first time home buyers to 30 years amortization on an insured mortgage and 2) increasing the purchase price cap from $1M to $1.5M on insured purchases. While making news headlines, I'm not sure if these will have a significant impact to the market. They do however improve affordability to some degree and the hope is they improve buyer sentiment.

The fall market has seen an increased number of showings with buyers beginning to dip their toes back in the market. Investors for the most part remained sidelined as the numbers don't make sense. Sales should pick up but inventory will likely continue to grow for the next little while. My guess is that prices remain relatively flat but only time will tell...