Market Watch - Resale Market Stabilizes in February
While higher lending rates are impacting sales activity as expected, we are seeing a stronger pullback in new listings, keeping supply levels low and supporting some stronger-than-expected monthly price gains. Prices are still below the 2022 peak and it is still early in the year. However, if we do not see a shift in supply, we could see further upward pressure on prices over the near term.
Ontario - Resale Market Stabilizes in February with a Glimmer of Hope for Buyers and Sellers Alike!
Toronto, 02 March 2023 -- February sales in the Greater Toronto Area (GTA) were down substantially from the pre-rate hike levels of early 2022. However, the number of new listings also dropped substantially year-over-year. The result was that the average selling price and MLS® HPI continued to level off after trending lower through the spring and summer of last year.
“It has been almost a year since the Bank of Canada started raising interest rates. Home prices have dropped over the last year from the record peak in February 2022, mitigating the impact of higher borrowing costs. Many homebuyers have also decided to purchase a lower-priced home to help offset higher borrowing costs. The share of home purchases below one million dollars is up substantially compared to this time last year,” said Toronto Regional Real Estate Board (TRREB) President Paul Baron.
GTA REALTORS® reported 4,783 sales through TRREB’s MLS® System in February 2023 – down 47% compared to February 2022, the last full month before the onset of interest rate hikes. The number of new listings entered into the system was down by a similar annual rate of 40.9% to 8,367.
“New listings continued to drop year-over-year in the GTA. Recently released Ipsos polling suggests buying intentions have picked up for 2023. This increased demand will run up against a constrained supply of listings and lead to increased competition between buyers. This will eventually lead to renewed price growth in many segments of the market, especially those catering to first-time buyers facing increased rental costs,” said TRREB Chief Market Analyst Jason Mercer.
The average selling price for February 2023 was $1,095,617 – down 17.9% compared to February 2022. Some of this decline is attributable to the fact that the share of sales below $1,000,000 was 57% in February 2023 versus only 38% a year earlier. On a monthly basis, the average price followed the regular seasonal trend, increasing relative to January 2023. The MLS® Home Price Index (HPI) Composite Benchmark was down year-over-year by a similar annual rate of 17.7%, but was also up on a monthly basis.
“As we move toward a June mayoral by-election in Toronto, housing supply will once again be front and centre in the policy debate. New and innovative solutions, including the City of Toronto’s initiative to allow duplexes, triplexes and fourplexes in all neighbourhoods citywide, need to come to fruition if we are to achieve an adequate and diverse housing supply that will support record population growth in the years to come,” said TRREB Chief Executive Officer John DiMichele.
Resale Market Stabilizes in February with a Glimmer of Hope for Buyers and Sellers Alike!
Ottawa, March 3, 2023 -- Members of the Ottawa Real Estate Board (OREB) sold 855 residential properties in February through the Board’s Multiple Listing Service® (MLS®) System, compared with 1,411 in February 2022, a decrease of 39%. February’s sales included 633 in the freehold-property class, down 42% from a year ago, and 222 in the condominium-property category, a decrease of 31% from February 2022. The five-year average for total unit sales in February is 1,157.
“We’re going to see declines in transactions and prices when we compare current figures to last February — the height of the pandemic resale market activity,” says Ottawa Real Estate Board’s President Ken Dekker. “On the other hand, with the Bank of Canada holding interest rates steady, prospective buyers have more budget certainty to work with as we head into the spring market.”
The average sale price for a freehold-class property in February was $708,968, a decrease of 15% from 2022. However, it marks a 5% increase over January 2023.
The average sale price for a condominium-class property was $410,927, decreasing 12% from a year ago.
With year-to-date average sale prices at $695,086 for freeholds and $411,449 for condos, these values represent a 14% decrease over 2022 for freehold-class properties and a 10% decrease for condominium-class properties.
“The average price increase for freeholds over January could be an indicator that buyers have normalized to the current interest rates. And perhaps, it’s a glimmer of more activity to come in the months ahead.”
Months of Inventory for the freehold-class properties has increased to 2.8 months from 0.7 months in February 2022.
Months of Inventory for condominium-class properties has increased to 2.5 months from 0.7 months in February 2022.
February’s new listings (1,366) were 22% lower than February 2022 (1,762) and up 3% from January 2023 (1,323). The 5-year average for new listings in February is 1,632.
Days on market (DOM) for freeholds decreased from 43 to 37 days and 47 to 43 days for condos compared to last month.
“A decrease in the days on market, paired with fewer new listings entering the market, is good news for sellers,” says Dekker. “However, if that trend continues to impact our supply stock and we don’t get more inventory, our otherwise balanced market could swing back into seller’s territory — but it’s too early to predict.”
“The best advice for sellers and buyers in today’s market is to pay close attention to the comparison and competition insights only a REALTOR® can offer. Ottawa is made up of many micro-markets, and neighbourhood-level data is vital to standing out and closing deals.”
REALTORS® also help with finding rentals and vetting potential tenants. Since the beginning of the year, OREB Members have assisted clients with renting 995 properties compared to 800 last year at this time, an increase of 24%.
Alberta - Lowest February inventory since 2006
City of Calgary, March. 1, 2023 – Consistent with typical seasonal behaviour sales, new listings and inventory levels all trended up compared to last month. However, with 1,740 sales and 2,389 new listings, inventory levels improved only slightly over the last month and remained amongst the lowest February levels seen since 2006.
“While higher lending rates are impacting sales activity as expected, we are seeing a stronger pullback in new listings, keeping supply levels low and supporting some stronger-than-expected monthly price gains,” said CREB® Chief Economist Ann-Marie Lurie. “Prices are still below the May 2022 peak and it is still early in the year. However, if we do not see a shift in supply, we could see further upward pressure on prices over the near term.”
Both sales and new listings declined over last year’s record high for the month. While sales activity remained stronger than long-term trends and levels reported throughout the 2015 to 2020 period, new listings fell below long-term trends.
With a sales-to-new-listings ratio of 73% and a months of supply of under two months, the market has struggled to move into balanced territory causing further upward pressure on home prices. The unadjusted benchmark price increased by nearly two% over January levels and last year’s prices.
Detached - Both sales and new listings reported significant year-over-year declines over last year’s record high. While the seasonal monthly gain did see inventories move up over the last two months, levels are still amongst the lowest seen in February, and the months of supply fell below two months.
Further tightening conditions did cause the unadjusted benchmark prices to rise over last month’s levels, but at a price of $635,900, it is still below the peak reported in May 2022. While supply continues to remain a challenge relative to demand for lower-priced homes, we are seeing conditions shift into balanced territory for homes priced above $700,000.
Semi-Detached - Like the detached sector despite the seasonal monthly gain, both sales and new listings fell from last year’s record high. While inventories are starting to rise over the levels seen in the past few months, they remain amongst the lowest levels reported for February. The relatively low inventory levels caused the months of supply to fall below two months in February, while it is still higher than last year’s ultra-low levels, conditions continue to favour the seller.
The unadjusted benchmark price reached $568,100 in February, nearly two% higher than last month and a three% gain over last February. Persistently tight market conditions contributed to the monthly unadjusted gain in the benchmark price. However, like detached properties prices remain below the May 2022 peak.
Row - Conditions remained exceptionally tight in February with only one month of supply and a sales-to-new listings ratio of 87%. While row sales have eased over record levels, they have remained relatively strong for February as demand shifts toward the affordable product in the market.
The persistently tight conditions caused further upward pressure on prices. In February, the unadjusted benchmark price reached $369,700, a monthly gain of over two% and a year-over-year gain of nine%. Unlike the other sectors, prices have reached a new high this month.
Apartment Condominium - Sales for apartment condominiums did not see the same pace of decline as other property types in February partly due to the level of new listings coming onto the market. Persistently strong sales compared to listings have caused February inventory levels to remain relatively low compared to levels seen over the past eight years and the months of supply once again dropped below two months.
The tight market condition contributed to the upward pressure on prices. In February, the unadjusted apartment benchmark price reached $286,000, nearly three% higher than last month and over 11% higher than last February. While prices are still higher than the levels reported last year, they remain nearly seven% below the peak levels reported back in 2014.
Britsh Coloubia - Below average home sales allow inventory to inch upwards
Metro Vancouver, 3 February 2022 -- February listing data show a continued reluctance among prospective home sellers to engage in Metro Vancouver’s housing market, leading to below-average sales activity. With sales remaining well-below historical norms, the number of available homes for sale in the region have continued inching upwards.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,808 in February 2023, a 47.2% decrease from the 3,424 sales recorded in February 2022, and a 76.9% increase from the 1,022 homes sold in January 2023.
Last month’s sales were 33% below the 10-year February sales average.
"It’s hard to sell what you don’t have, and with new listing activity remaining among the lowest in recent history, sales are struggling to hit typical levels for this point in the year. On the plus side for prospective buyers, the below-average sales activity is allowing inventory to accumulate, which is keeping market conditions from straying too deeply into sellers’ market territory, particularly in the more affordably priced segments."
Andrew Lis, REBGV Director, economics and data analytics
There were 3,467 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in February 2023. This represents a 36.6% decrease compared to the 5,471 homes listed in February 2022 and a 5.2% increase compared to January 2023 when 3,297 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,868, a 16.7% increase compared to February 2022 (6,742) and a 5.2% increase compared to January 2023 (7,478).
“While we continue to expect home price trends to show year-over-year declines for a few more months, current data and market activity suggest pricing is firming up. In fact, some leading indicators suggest we may see modest price increases this spring, particularly if sales activity increases and mortgage rates hold steady,” Lis said.
“In the somewhat unusual market environment we find ourselves in right now with higher mortgage rates, fewer sales, and inventory that is inching higher but remains far from abundant, working with a Realtor who understands your local market conditions and has experience navigating challenging markets is paramount.”
For all property types, the sales-to-active listings ratio for February 2023 is 23%. By property type, the ratio is 16.8% for detached homes, 30.1% for townhomes, and 25.8% for apartments.
Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12% for a sustained period, while home prices often experience upward pressure when it surpasses 20% over several months.
The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,123,400. This represents a 9.3% decrease over February 2022 and a 1.1% increase compared to January 2023.
Sales of detached homes in February 2023 reached 514, a 49.1% decrease from the 1,010 detached sales recorded in February 2022. The benchmark price for detached properties is $1,813,100. This represents a 12% decrease from February 2022 and a 0.7% increase compared to January 2023.
Sales of apartment homes reached 928 in February 2023, a 49.9% decrease compared to the 1,854 sales in February 2022. The benchmark price of an apartment property is $732,200. This represents a three% decrease from February 2022 and a 1.6% increase compared to January 2023.
Attached home sales in February 2023 totalled 366, a 34.6% decrease compared to the 560 sales in February 2022. The benchmark price of an attached unit is $1,038,500. This represents a 6.3% decrease from February 2022 and a 1.8% increase compared to January 2023.