Expert advice, market reports, and tips from the Niagara Region real estate professionals.
Although there are no real surprises in the sales stats that came in for August, there are a few items of note. The first involves price. The overall feeling among realtors, and in fact in some reports coming in across the country, is that prices are sliding. But that is not totally accurate.
Interesting dynamics going on in the real estate market at the moment. Prices, as we expected, are falling as we move into the second half of the year. July at $663,841 is actually down $13,466 from June. A drop in one month of 2%. At the same time, unit sales, which should be falling in lock step with prices are actually on the rise. In fact, July recorded 648 sales across the region. That not only compares favourably with the 529 figure we saw in June. It is actually the strongest month so far this year. Interesting.
If this year follows the pattern of the past couple of years, we can expect a continued strengthening of market dynamics, both with respect to average price and also with unit sales right up to the end of June. But then a tapering off of both on to the end of the year. So, let’s take a look at May’s stats and see if that is what is happening
Whenever we sit down to review the numerical sales data, month by month and year by year, we always look to see if there are any trends evident. I speak here both in terms of number of unit sales and also average residential sale price. And then we ask ourselves the question – “Why did this happen?”. What we are trying to do, of course, is extrapolate out and thus predict what will happen in the months ahead. We primarily follow unit sales and average residential sales prices. As I’ve said before, I don’t particularly track new listings coming in, because these numbers are unreliable. They include properties that expire and are re-listed as well as listings that are re-serviced. So, while available inventory is a useful barometer, new listings are not.
Whether we are tracking unit sales or average sale price, there is a trend that seems to happen, year after year, provided no extreme external pressures are being applied. And that is up in the spring and down in the fall.
I now have the January sales figures in from the Board. They are not precise. This concerns me when it comes to both number crunching and reporting. I’m not faulting anyone but the fact is that a couple of changes have occurred which skew the figures. The first, as we’ve discussed in the past, is that the industry over the past year or so has switched from average sale prices to HPI prices (Home Price Index) which zeros down on one type of sale.
Last month, as you recall, we were a little light on data in our market report. This was because our local real estate board, The Niagara Association of Realtors, was in the process of changing MLS service providers and it was taking time to implement the new systems and getting all the data transferred over.
The market report is going to be a little thin this month I’m afraid. Especially when it comes to specific data. The Niagara Association of Realtors (NAR) which we look to for our raw sales data is in the process of changing MLS data systems and the numbers for November are not currently available.
Not sure if it is due to the consistent drop in interest rates or the weather, or if it is a combination of both, but whatever the reason, the market is continuing strong long after we would normally see a downturn. And that is true both for average sale price and also for unit sales.
From 2023 on into 2024 history is repeating itself. 2022 as we’ve seen was a year unique unto itself. After coming off the frenzied real estate market of covid with its multiple offers and enormous price hikes, 2022 was a year of corrections. The market declined steadily from a February peak of $863,057 right down to a December low of $656,337. A drop of $206,720. Quite a drop.
