Market Watch September 2023
Much talk about the economy, interest rates, and immigration lately and how it affects the housing market.
Yesterday interest rates were held but according to multiple sources the possibility of further increases is on the table. There are several factors affecting the housing market and much of the ranting and media in my opinion is misinformation and campaign marketing. Politicians want to sell their narratives.
The Toronto Real Estate Board has an interesting statement in their release, “uncertainty about the economy and Bank of Canada decision making”. Key words being B of C decision making” It’s not just the B of C but every level of Government. All one has to do is look at Doug Ford. A lame narrative for the greenbelt fiasco which I quote, “When we have a housing crisis, I have two options,” Mr. Ford said. “I sit back … and let the whole province fall apart, or we move forward and we build homes.” Doug Ford.
There are more options than this. As result Ontario’s Housing Minister resigned and rightly so! Bottom line, the Ontario Government can’t build homes and is not looking at all the options, they are looking at the narrative and other suspect agendas.
Several problems exist. First we have 3 levels of Government working their own agenda. The Feds have increased immigration levels based on assumed benefits to the economy with no thought on where to put the new comers, not to mention infrastructure. Side note evidence suggests this is not helping the economy.
We have the Ontario government using greenbelts as a marketing narrative for building homes. (Suggestion, how about using golf courses!)
All while municipalities are following their Official plan, and communities and voters appear to be out of the loop.
These three levels of Government need to be in complete communication about the needs and future development of communities. Currently they are not.
There is not a housing crisis. Government policy and affordability is the problem attributed to all of the above.
On another note. Now that we have come through summer you will see below home prices have continued to fall in August. This is not a surprise. Summer has many buyers and sellers distracted on holidays. Uncertainty is also likely playing a role. September and October will be interesting to see where the market goes. As always as we get into December the market drops off again until the New Year.
If you are considering selling, contact me for a FREE market evaluation of your home. Referrals are always welcome and received with gratitude.
Doing Real Estate Right!
Lance Nielsen, Realtor
Below are August’s Market Reports for Waterloo Region and the GTA…
WATERLOO REGION, ON (September 6, 2023) — In August, there were 568 homes sold through the Multiple Listing Service® (MLS®) System of the Waterloo Region Association of REALTORS® (WRAR), representing a decrease of 14.2 per cent compared to the previous year and a decline of 23.5 per cent compared to the previous 5-year average for the month.
“For the first time in a decade we saw August’s home sales slip under the 600-unit mark,” says Megan Bell, president of WRAR.” “Home sales were softer than normal last month, which is not surprising given the current borrowing environment.”
Total residential sales in August included 315 detached (down 24.1 per cent from August 2022), and 134 townhouses (up 12.6 per cent). Sales also included 74 condominium units (up 10.4 per cent) and 44 semi-detached homes (down 27.9 per cent).
In August, the average sale price for all residential properties in Waterloo Region was $761,377. This represents a 1.4 per cent increase compared to August 2022 and a 4.4 per cent decrease compared to July 2023.
- The average price of a detached home was $884,390. This represents a 3.9 per cent increase from August 2022 and a decrease of 3.9 per cent compared to July 2023.
• The average sale price for a townhouse was $659,704. This represents a 8.0 per cent increase from August 2022 and a decrease of 1.7 per cent compared to July 2023. - The average sale price for an apartment-style condominium was $485,205. This represents an increase of 4.1 per cent from August 2022 and a decrease of 2.3 per cent compared to July 2023.
- The average sale price for a semi was $669,044. This represents an increase of 2.0 per cent compared to August 2022 and a decrease of 0.3 per cent compared to July 2023.
“Home buyers had the advantage of strong listing activity in August, which helped to provide a little more choice and temper prices,” says Bell. “But affordability remains a top concern for many who are looking to get into the market and finding it a challenge to resolve what they want with what they can afford.”
WRAR’s President points out that while market-wide, inventory levels were up 7.6 per cent in August, this was mainly due to the Townhouse/Condo segment, where inventory increased by 35.3 per cent. The property type with the most supply in the market is the condo segment with 3.3 months supply, compared to 1.8 months supply in the detached home category.
“Right now, buyers may find it easier to get into a condominium, which can be a great choice for both first time buyers, and anyone looking for a lifestyle change.
There were 1,025 new listings added to the MLS® System in Waterloo Region last month, an increase of 9.7 per cent compared to August of last year and a 11.7 per cent increase compared to the previous ten-year average for August.
The total number of homes available for sale in active status at the end of August was 1,094, an increase of 7.6 per cent compared to August of last year and 14.9 per cent below the previous ten-year average of 1431 listings for August.
There were 2.0 months of inventory at the end of August, unchanged from the end of July and in line with 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. The average number of days to sell in August was 19, compared to 23 days in August 2022. The previous 5-year average is 21 days.
TRREB: HIGHER BORROWING COSTS CONTINUE TO IMPACT HOUSING MARKET IN AUGUST
TORONTO, ONTARIO, September 6, 2023 – Higher borrowing costs, continued uncertainty about the economy and Bank of Canada decision making, and the constrained supply of listings resulted in fewer home sales in August 2023 compared to August 2022. The average selling price remained virtually unchanged over the same period. On a seasonally adjusted monthly basis, sales and average price edged lower.
“Looking forward, we know there will be solid demand for housing – both ownership and rental – in the Greater Toronto Area (GTA) and broader Greater Golden Horseshoe. Record immigration levels alone will assure this. In the short term, we will likely continue to see some volatility in terms of sales and home prices, as buyers and sellers wait for more certainty on the direction of borrowing costs and the overall economy,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
Greater Toronto Area REALTORS® reported 5,294 sales in August 2023 – down by 5.2 per cent compared to August 2022. New listings were up by 16.2 per cent year-over-over, providing some relief on the supply front, but year-to-date listings are still down substantially compared to the same period last year. Seasonally adjusted sales were down slightly by one per cent month-over-month compared to July 2023, while new listings were up slightly by 1.3 per cent compared to July.
“More balanced market conditions this summer compared to the tighter spring market resulted in selling prices hovering at last year’s levels and dipping slightly compared to July. As interest rates continued to increase in May, after a pause in the winter and early spring, many buyers have had to adjust their offers in order to qualify for higher monthly payments. Not all sellers have chosen to take lower than expected selling prices, resulting in fewer sales,” said TRREB Chief Market Analyst Jason Mercer.
The MLS® Home Price Index Composite benchmark for August 2023 was up by 2.5 per cent year-over-year. The average selling price was also up, but by less than one per cent to $1,082,496 over the same timeframe. On a month-over-month seasonally adjusted basis, the MLS® HPI Composite benchmark was virtually unchanged and the average price edged lower by 1.6 per cent.
“While higher interest rates have certainly impacted affordability, the prospect of higher taxes will also hit households’ balance sheets, especially younger buyers with limited savings. With the City of Toronto moving to raise the municipal land transfer tax (MLTT) rate on properties over $3 million as a revenue tool, it must also consider helping first-time home buyers struggling to enter the market by adjusting their tax rebate threshold to reflect today’s higher home prices,” said TRREB CEO John DiMichele.
“All three levels of government need to be focused on the key issue impacting affordability in the GTA: lack of supply. Right now, there continues to be a policy mismatch between population growth through immigration and temporary migration and bringing online enough housing to accommodate this population growth. If we can’t house newcomers, they will look elsewhere, and Canada and the GTA will lose its competitive edge on the global stage,” continued DiMichele.
Time is running out! Show off your lush green gardens.
If you’re considering selling your home in the fall or winter, it’s essential to plan ahead and book your photography session this summer. Summer provides the best natural lighting and showcases your property’s exterior at its finest. High-quality photographs captured during this season can significantly enhance your home’s appeal to potential buyers. With the real estate market showing positive growth and increased listing activity, having professional photos ready early ensures you’re prepared to make a strong impression when the time comes to list your property. Don’t miss the opportunity to present your home in its best light Schedule your photography session now and get a head start on your selling journey. Contact me to book your shoot!
If you are considering selling, contact me for a FREE market evaluation of your home.
Doing Real Estate Right!
Lance