Market Watch January 2024

Waterloo Region’s Housing Market Shows Signs of Improvement in January

WATERLOO REGION, ON (February 2, 2024) — In January, there were 375 homes sold through the Multiple Listing Service® (MLS®) System of the Waterloo Region Association of REALTORS® (WRAR), representing an increase of 25.4 per cent compared to the previous year and a decline of 7.4 per cent compared to the previous 10-year average for the month.

“January is traditionally a slower time of year for home sales, but it’s reassuring to see the increase compared to last year,” says Christal Moura, president of WRAR. “This time last year, we hit an all-time low in January home sales, and while this year has begun with sales below the historical average, the market is showing signs of improvement.”         

Total residential sales in January included 206 detached (up 15.7 per cent from January 2023), and 85 townhouses (up 39.3 per cent). Sales also included 56 condominium units (up 30.2 per cent) and 19 semi-detached homes (up 11.8 per cent).

In January, the average sale price for all residential properties in Waterloo Region was $762,174. This represents a 0.1 per cent decrease compared to January 2023 and a 3.2 per cent increase compared to December 2023.

  • The average price of a detached home was $911,262. This represents a 2.9 per cent increase from January 2023 and an increase of 7.5 per cent compared to December 2023.
  • The average sale price for a townhouse was $638,162. This represents a 2.0 per cent increase from January 2023 and an increase of 2.7 per cent compared to December 2023.
  • The average sale price for an apartment-style condominium was $446,146. This represents a decrease of 10.0 per cent from January 2023 and a decrease of 8.7 per cent compared to December 2023.
  • The average sale price for a semi was $631,995. This represents a decrease of 2.9 per cent compared to January 2023 and an increase of 3.1 per cent compared to December 2023.

“We are optimistic that this year will have more stability than last,” says Moura. “With the Bank of Canada holding steady at a 5.0% benchmark interest rate, they recognize the overall economy has slowed down. However, housing is a key metric, and we expect the Bank to maintain a balanced response so long as housing continues with moderate growth in 2024 rather than any dramatic increases.”

President Moura points out that navigating shifting markets is a challenge and encourages consumers to work with a local REALTOR to ensure they receive the depth of local market knowledge required to protect their interests.

There was 720 new listings added to the MLS® System in Waterloo Region last month, an increase of 23.5 per cent compared to January last year and a 3.9 per cent decrease compared to the previous ten-year average for January.

The total number of homes available for sale in active status at the end of January was 855 an increase of 33.4 per cent compared to January of last year and 1.2 per cent below the previous ten-year average of 865 listings for January.

At the end of January, there were 1.5 months of inventory, a 50.0 percent increase compared to last year and 15.4 percent above the previous 10-year average. The number of months of inventory represents how long it would take to sell off current inventories at the current sales rate.  

“With the exception of condo apartment property types, we saw mostly yearly and monthly price gains across the housing types,” says Moura. “This is because there is more supply in the condo segment (2.8 months) compared to the other property types.”

The average number of days to sell in January was 33, compared to 25 days in January 2023. The previous 5-year average is 20 days. 

These statistics provide a snapshot of the real estate market in the Waterloo Region in January, showing both positive and challenging aspects for buyers and sellers.

TRREB: Tighter Market Conditions in January 2024 When Compared to the Previous Year

TORONTO, ONTARIO, February 6, 2024 – Home sales were up in January 2024 in comparison to January 2023. This annual increase came as some homebuyers started to benefit from lower borrowing costs associated with fixed rate mortgage products. New listings were also up year-over-year but by a lesser annual rate compared to sales. The resulting tighter market conditions when compared to the same period a year earlier, potentially points toward renewed price growth as we move into the spring market.

“We had a positive start to 2024. The Bank of Canada expects the rate of inflation to recede as we move through the year. This would support lower interest rates which would bolster home buyers’ confidence to move back into the market. First-time buyers currently facing high average rents would benefit from lower mortgage rates, making the move to homeownership more affordable,” said TRREB President Jennifer Pearce.

There were 4,223 sales reported through TRREB’s MLS® System in January 2024 – an increase of more than one-third compared to January 2023. The number of new listings was also up year-over-year but by a lesser annual rate of approximately six per cent. Stronger sales growth relative to listings suggests buyers experienced tighter market conditions compared to a year ago.

On a month-over-month seasonally adjusted basis, both sales and new listings were up. Sales increased more than listings which means market conditions tightened relative to December 2023.

“Once the Bank of Canada actually starts cutting its policy rate, likely in the second half of 2024, expect home sales to pick up even further. There will be more competition between buyers in 2024 as demand picks up and the supply of listings remains constrained. The end result will be upward pressure on selling prices over the next two years,” said TRREB Chief Market Analyst Jason Mercer.

The MLS® Home Price Index Composite in January 2024 was down by less than one per cent year-over-year in January. The average selling price was down by one per cent year-over-year to $1,026,703. On a month-over-month seasonally adjusted basis, both the MLS® HPI Composite and the average selling price also trended lower.

“While housing market conditions are expected to improve with lower borrowing costs, there are still a number of policy issues that need to be addressed. At the federal level, more reflection on the Office of the Superintendent of Financial Institution (OSFI) mortgage stress test is required, especially to its application at different points in the interest rate cycle. The focus for the Province needs to remain on building 1.5 million new homes. At the municipal level, raising property taxes without consistent support from the federal and provincial governments won’t eliminate Toronto’s structural deficit. Helping first-time homebuyers get into the ownership

If you are considering buying or selling, contact me anytime to answer your questions, big or small. I’m here to help!

Move forward with confidence!

Lance Nielsen

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