HOUSING MARKET BEGINNING TO STABILIZE
Tags: Buyers, sellers, adjusting to higher interest rates
Residential sales across Durham Region dropped last month compared to the year before but new listings increased in that same time period. Both are encouraging signs that stability is returning to the housing market, despite rising interest rates and worries about a recession.
According to the Durham Region Association of Realtors, 632 homes exchanged hands in October through the MLS System. That’s a significant drop of 40 per cent compared to 2021 but new listings reached 1,183 – a four per cent increase compared to the same time last year.
Compare that to the Greater Toronto Area (GTA) overall. Realtors reported 4,961 sales though the Toronto Regional Real Estate Board’s (TRREB) MLS system in October – down 49.1 per cent compared to the previous year. New listings across the GTA were down 11.6 per cent year over year.
The average GTA selling price, meanwhile, can be described as quite stable, increasing from $1,074,754 in July to $1,079,500 in August to $1,086,762 in September and reaching $1,089,428 in October. That number is down slightly from June’s average selling price of $1,146,254 and down 5.7 per cent year over year, when the average GTA home netted $1,155,624.
DURHAM A TOP MARKETPLACE
Here in Durham Region, the average price in October was $893,673, which means it remains a top marketplace with affordable options for buyers, which is good news for sellers, especially if they’re also planning to buy. Here’s the average price by municipality: Ajax ($968,767), Brock Township ($805,653), Clarington ($835,359), Oshawa ($782,227), Pickering ($981,563), Scugog ($958,500), Uxbridge ($1,100,627) and Whitby ($991,105). The average days on market was 16 – up from nine last year.
Here in Brooklin, the average selling price in October was $1,139,420, down from the peak of $1,403,356 in February. It’s also down from the previous year, when the average home sold for $1,214,081, and up from October 2020, when the average home netted $955,297.
Those are a lot of numbers to absorb. But as you consider them, remember the Bank of Canada has increased its policy rate six consecutive times since March in a bid to tackle inflation and is expected to increase it again on December 7. Even as house prices have dropped, the cost of borrowing has risen and – especially after historic low interest rates during the pandemic – both buyers and sellers are adjusting to the new reality.
It's also important to remember that market activity remains well below pre-pandemic levels not just in the GTA but across the country, according to the Canadian Real Estate Association (CREA). Declining price trends appear to be broadly moderating, with major markets reporting smaller rates of depreciation in October, a new RBC report finds.
IF YOU’RE A BUYER
Canada’s major chartered banks are currently advertising five-year fixed mortgage special interest rates of around 5.54 per cent. Home buyers can often negotiate the interest rate for mortgage financing based on their creditworthiness and the degree to which they do other banking business with the mortgage lender, CREA advises.
If you’re a buyer, we encourage you to get preapproved, speak to your lender so you understand what you can comfortably afford and to stay below that rate when making an offer. Getting preapproved will allow you to secure a rate for 90 to 120 days while you look for a home.
IF YOU’RE A SELLER
If you’ve decided to sell, there’s certainly no need to wait, but it is important to be realistic about pricing. We will conduct market research on the area in which you’re selling, compare how much properties have recently been listed for and determine their selling price to help you list your home accordingly.
As home buyers or prospective buyers come to terms with higher borrowing costs, they’ll move from the sidelines into the market. “With new listings at or near historic lows, a moderate uptick in demand from current levels would result in a noticeable tightening in the resale housing market in short order,” TRREB President Kevin Crigger tells us.
“Obviously, there is still a lot of short-term economic uncertainty. In the medium-to-long-term, however, the demand for housing will rebound.”
After experiencing a market that was described by adjectives like ‘red hot’ and ‘frenetic,’ many buyers and sellers welcome the return to stability. The lack of urgency provides breathing room on every transaction, allowing all parties to make more thoughtful decisions.
As the housing market continues to evolve, we understand that you may be hesitant to buy or sell. But Durham Region remains an ideal market, with a wide variety of home types and neighbourhoods. As always, your local realtor is your best bet for information and guidance about how to navigate the current market. Count on The King Home Team: Royal Heritage Realty to help you make sound decisions that are in the best interest of you and your family.