Blog

DETACHED HOME AVERAGE PRICES EXCEED 1 MILLION DOLLARS
MORE HOMES SOLD YEAR OVER YEAR BUT STILL 12.3% DOWN COMPARED TO 5 YEAR AVERGAGE

“The real estate market in Waterloo Region showed signs of a rebound in June, with monthly sales increasing on a year-over-year basis for the first time this year,” says Megan Bell, president of WRAR. “The total number of home sales are down nearly 25 per cent for the first half of 2023 compared to last year but have been steadily climbing since January.”

“In June we saw robust demand for detached properties, driving a significant 10.5 per cent increase in the average sale price of a detached home,” says Bell. “While the central bank raised its benchmark interest rate to 4.75 per cent near the beginning of the month, demand remains strong. Buyers and sellers can expect a competitive market as the number of homes for sale continues to be well below the long-term average,” says Bell.

Bank of Canada will be releasing their Monetary Policy Report on July 12th along with an interest rate announcement. If you are in the market for a home and haven’t already it would be a good time to talk to your lender and lock in the interest rate from June 7th. Preapprovals are good normally for 90-120 days and if the rate drops you can always go back and get new rate.

The average detached home price for all of Ontario sits at $820,761 for June 2023. Waterloo Region continues to out perform with an average sale price for detached homes of $1,005,519 which correlates to December 2021 before the all time high of $1,209,493 in February 2022. Waterloo region is still a hot market. We are approaching 1.8 months of inventory over the last 5 years the we saw a maximum of of 2.1 months supply. While that still remains a sellers market there are more choices and flexibility in the market right now then we have seen in a long time. Waterloo Region hasn’t seen a balanced market since September 2012 at 4.9 months balanced market is considered to be 6 months inventory.

HOME PRICES CONTINUE TO INCREASE IN WATERLOO REGION

LACK OF SUPPLY AND HIGH DEMAND DRIVING PRICES UP

“The local spring market is off to a slower than usual start with half the number of new listings hitting the market than this time last year,”

“Waterloo Region remains a sellers’ market, and while prices have fallen in comparison to last year, we anticipate that home prices will continue to increase steadily,” says Bell. “Some stability in mortgage rates has brought about a return of buyer activity as we begin to observe a return of multiple offer scenarios, bidding wars, and a decrease in the number of days properties take to sell.”

While properties under 1.5 million continue to be a sellers market, luxury properties are making a shift towards a more balanced market. We may see the return of the 1 million dollar average home price in August to September of this year as we are only currently $75,000 away.

If you are thinking about selling now is the time as we approach that window to allow 60-90 days closing before school starts in September. A 90 day closing setups up an occupancy date of mid august.

If the first part of this month is any indication we are going to see the return of high prices and frantic bidding wars again. Properties I’ve been showing are down to often 7 days on the market and some as low as 2 with the resurgence of double digit bids and multiple hundreds of thousands over asking. However there are also properties that are sitting on the the market for months and experiencing price reductions as well. It’s extremely important to have a full time Realtor that is monitoring the market and property types you’re interested in to ensure you act appropriately based on the demand for that specific property.

HOME PRICES INCREASING IN WATERLOO REGION

NON STOP SHOWINGS AND BIDDING WARS ARE RETURNING

In the past month, Waterloo Region has witnessed a resurgence of the 2022 real estate market with 50-100 showings per week, and some homes experiencing bidding wars again. The prices of properties are also increasing, and some are fetching 10-20 offers, selling for more than their asking prices. Astonishingly, even the properties that require a lot of renovation, updating, even fire restoration are going for up to 60-100K over their asking prices within a week of listing.

Although prices are down from the peak February 2022, the trend is still upward if that is excluded from the data. Compared to two years ago, the prices are still on the rise. This indicates that the demand for properties in the Waterloo Region is still high, buyers are feeling the pinch of increasing interest rates and prices. This has resulted in many prospective buyers feeling left out, while sellers are reluctant to list their homes as they feel that they may miss out on 20% of the value of their properties if compared to the data anomaly of February 2022.

Despite the government’s intervention in trying to cool the housing market, it seems to have had no impact on the Waterloo Region. The combination of buyers’ and sellers’ concerns has created the perfect storm for the housing market to return to the insanity of 2022. Welcome to the spring market of 2023! Are you ready?