CREB Announces a record month...but did it come about the way we wanted?
If you read the CREB release you will hear words like a record-high month.
But did the record month come the way a market like ours should be working?
Let's dive into the figures to see what's been going on.
Aggregated Absorption Rates YTD
In the above illustration, you will find a massive upswing in the absorption rate this month. This has followed the same trend over the last two years with an upswing in the market at this time of the year.
For the month of October, we found the ABS rate increase to 43%, which is a 7% increase month over month and is about 23% better than 2019 and 14% better than 2020.
But the key to understanding this jump is to look at the breakdown of what caused it.
In the month of October, we saw a decline of listings of about 16% month over month, while sales only increased by 1% month over month.
This decline is really what will start to hurt the market. Our inventory levels are now at 5,067 active listings available. The last time this number was this low was in February of this year when it was 4,683 active listings.
And we all know how the summer played out after a shortage of inventory to these levels.
But there is one more factor that has also changed this month.
The accelerated timeframe for adjustment to the BOC (Bank of Canada) rate has been rumored to increase in Q2 of next year.
These types of announcements will accelerate buyers to purchase now rather than later to save thousands on the interest rates they receive.
To learn why this is important, check out our blog on how interest rates affect your bottom line.
This significant decline in available inventory will also cause sellers to pause their ambition to sell because of their worry of not finding their next home right away.
Which is a legitimate concern many sellers have at the moment.
I have some solutions if this is you, and we can always chat about your options, feel free to email me at firstname.lastname@example.org
Now let's look at how the apartment market is shaping up.
Apartment Absorption Rates YTD
A very different picture isn't it.
On the apartment side of the market, we are still in a buyer-leaning balanced market. Generally, anything over 30% would be considered slightly seller favourable.
In October, we saw the ABS rate increase 2% month over month to 22%. It is 6% better than 2019 and 8% better than 2020.
But as you can see, there is still a lot of inventory out there for apartments and lots of opportunities to invest.
As we progress into the winter months, historically we see the market cooling as more and more people start to focus on the holidays rather than buying or selling a home.
However, if buyers have rates locked now that are good for three months (the rates just increased yesterday again), they will be very active to buy before the year is out.
If you are considering a sale like I mentioned and are worried about where you'd go or what you can buy, let's connect (email@example.com) and go through your options and when it might be a great time for you to sell. You can also book a time with me below.
We want to make sure we are maximizing your return on your home but also ensure you have a time frame that works for you to make your move.
If you have questions or would like to connect. Email is the best above or you can connect with me on social below.
Thanks again, take care, and stay safe!