Happy New Year!
As anyone who has been following real estate is likely aware, 2023 was a rapidly changing year in our market...it was slightly sluggish at the beginning of the year; sales took off for the Spring; activity plummeted over the Summer and Fall as the impact of the many interest rate hikes finally took hold. Rates were higher than we had seen in a decade; sales were much lower than the 10 year average through the Fall and December 2023.
Over all types of homes, we were in a "balanced" market last month. However for detached homes we were in a "buyers' " market. This is when it is most beneficial for buyers to buy but as we have seen in past (and short lived) buyers' markets, many have adopted a "wait and see" approach hoping to see prices plummet. Forecasts are that this likely won't happen so hopefully those buyers will move to get into the market while they have choice and control not usually seen for buyers in the lower mainland. Prices are down slightly (which is why some sellers have chosen to wait as well hoping for the frenzied sellers' market to return) but still strong despite massive interest rate increases.
We will have to see what happens this Spring. Predictions vary. In December 2023 we saw:
-sales were UP 3.2% from December 2022
-sales were still 36.4% BELOW the 10-year average for December
-the number of homes listed for sale was UP 9.9% when compared with December 2022
-the number of homes newly listed for sale was 22.7% BELOW the 10-year average
-detached home sales were UP 1.3% from December 2022
-the benchmark price for detached homes was UP 7.7% when compared to December 2022; and DOWN .9% when compared to a month earlier, November 2023
-the sales to listing ratio overall for all types of homes was 16%; for detached homes the ratio is 11.1%. Prices trend downward when the ratio is around 12%. We can see from the past months' data as well as from December, that detached homes seem to
be experiencing the brunt of the market adjustment.
If we compare the entire year for 2023 vs. 2022, sales were down 10.3% in 2023. Sales in 2023 were down 41.5% when compared to 2021. This is obviously significant.
As mentioned last month, these numbers don't tell the whole story so we don't really have enough information to determine what to expect this Spring (real estate "spring" starts shortly in our area!). The prices are not down much on paper BUT this doesn't factor that part of the reason is sellers have been taking their homes off the market in many cases rather than accepting what buyers are willing to pay. If those homes had sold for current market value we would be seeing more significant price drops. As was the case in September, October and November, the numbers show that detached homes have suffered most from the market change.
Interest rates continue to be problematic as buyers have been adapting to the last ten interest rate increases. Fortunately, the Bank of Canada has not raised the rates in its last three announcements-most recently December 6th and some rate cuts are forecast for this Spring. There seem to be a lot of buyers still looking for homes so we will see what that translates into for the 2024 market.
If you would like to discuss your specific situation or would like more detailed information about what we expect to see over the next 6-12 months, I would be happy to meet with you or discuss by phone.
All the best in 2024!