National Home Sales are Slowing – Should Buyers Make a Move?
Fall usually signals an opportunity to make big bucks in real estate – for many prospective buyers, the autumn months are when they make a last-ditch effort before cooler temperatures and holiday spirit effectively put ice on the housing market. It’s the perfect time to make a move on townhomes for sale in Toronto, or condos in Hamilton as both buyers and sellers are motivated.
However, 2017 September numbers from the Canadian Real Estate Association (CREA) suggests sales aren’t experiencing their typical fall boost. According to CREA’s Q3 analysis, home sales across Canada rose by 2.1 per cent from August to September but fell 11 per cent compared to the previous year.
National Sales and Prices: September 2017 vs. September 2016
The average home price, however, continued its upward trajectory, by 2.8 per cent to $487,000 across the 13 MLS markets tracked by the real estate association. Demand for detached houses continued to fall, but activity in the condo and townhouse segments helped offset that downturn, up 19.8-per cent and 13.5 per cent, respectively. In comparison, one-storey houses appreciated by 7.9 per cent, and two-storey houses at 7.2.
Stability For Market Conditions?
But what do stubbornly-high prices and slowing sales mean for prospective buyers? According to CREA’s analysts, overall market conditions seem to be slowing – but not to take too much stock in the trend until the impact from new mortgage rules lands.
Stated CREA President Andrew Peck, “National sales appear to be stabilizing. While encouraging, it’s too early to tell if this is the beginning of a longer-term trend.”
His Chief Economist Gregory Klump concurs, adding, “Further tightening of federal regulations aimed at cooling housing markets in Toronto and Vancouver risks creating collateral damage in markets elsewhere in Canada. It also jeopardizes Canadian economic growth, which is already showing signs of fading.”
Improved Choice for Buyers
CREA also studies the amount of time required to entirely deplete the supply of homes for sale, finding inventory currently sits at five months nationally.
Combined with slower sales, that’s pushed the country’s new-sales-to-listings ratio to 55.7 per cent, a slight drop from the 57.7 per cent recorded in August. This ratio helps establish whether a market is within buyer’s or seller’s market range – CREA considers a ratio between 40 – 60 per cent to be balanced territory.
However, this varies wildly by region and local market. For example, in Toronto, the ratio is now 56.1 per cent – a significant recovery from the sub-40 per cent experienced following the implementation of the Ontario Fair Housing Plan. Prior to those new rules, the city was firmly in seller’s territory, with a ratio above 70 per cent.
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