Updated: Jun 23
As we start to hear the wonderful news of reopenings, we have seen more and more changes to what we all know to be the recent normal. But with the goal to reopen at the doorstep, has our market seen the effects of the change in mindset? Let's take a deep look and see where we can anticipate ending this month.
As we enter the last week of June, we have seen sales increase year over year by 81%. This same comparison shows that new listings are only up 24% and active listings have increased by 8.2%.
This tells the story that we have a market where the number of sales is significantly outpacing the number of active listings for buyers to select from. This is not new as we have reported for months. However, what is noteworthy to see is that we are also outpacing the number of sales and new listings from this same time in 2019 while active listings are also lower than 2019.
In terms of price we can see, year over year we are outpacing both the median price and average price by 6.1% and 5.6% respectively. If you are keeping up to date on my publications you will know that this is mostly driven by the decrease in the interest rates that we have seen due to the pandemic. It is still a savings to pay more for the price of a home than pay slightly more in compound interest.
But how does June compare to May of this year. At the beginning of the month, I reported that if we use a simple average per day sales forecast that we should see sales and new listings decline month over month to 2,651 and 4,143 respectively.
But does this hold true now that we have more data in the month to work with?
Using the same calculation, we can anticipate about 2,801 sales in June, which is fewer by 185 sales for the month compared to last, or a decline of 6.2%.
In terms of new listings, we can anticipate about 4,231 new listings for the month, which is a decline of 333 listings from May, or 7.3%.
Comparing to our estimate two weeks ago, we are outpacing our forecast on both sales and new listings for the month by 5.7% and 2.1% respectively.
So have seen a decline in the market from May to June, yes. Is it significant enough to change the mindset of sellers and buyers? Not yet. As sales have declined, so have new listings. Both have declined at relatively the same rate, which will maintain the same type of market and price points. July will be the true testament to how the reopening has changed the minds of sellers and buyers with respect to our market.
Some key factors to keep in mind are:
The BOC and Fed (US) have both maintained the rates they hold but have indicated that their rate hikes will be coming in sooner than later. Both forecasted changes in 2023 whereas now it looks to be in 2022.
The inflation rates have soared but according to economists, this is a blip and will normalize as reopenings occur in North America.
Lumber prices have reduced by over 20% and seem to show signs of stabilizing. This will significantly impact new builds in Canada and the costs pushed to consumers.
Our real estate market is ever-changing and I hope you've found great value in my analysis of the current state we are working in. I hope you can share this article with your friends and family and that if they have any questions, I can earn the opportunity to assist them with their real estate needs.
Thanks again for your time, take care. Talk soon!
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