Another calendar year is coming to an end, and around here it seems like it was just a short time ago that we were saying the same thing about 2021 and with 2022 on the immediate horizon just like 2023 is now. But one thing is for sure as it relates to the Canadian real estate market and working as a realtor in Canada; 2022 has been a whole lot more eventful in regard to home values and the market making a move in one direction or the other. For 2021 it was by and large that the market remained overheated and the ongoing pandemic continued to factor in a big way.
Here and now over the course of 2022 we’ve seen the market cool in a big way, and in many areas of the country median home values have dropped considerably. We’ve also seen how those declines haven’t resulted in widespread more affordable housing in the way some people had hoped, and we’ve also seen the unchanging reality that affordable housing is desperately needed in Canada and for some areas more than others. In fairness, the Federal Government is being proactive in trying to provide more affordable housing, but it’s definitely not an easy fix.
Perhaps the biggest takeaway – and the one that strikes the best balance between the interests of homeowner and prospective homebuyer – is that most real estate markets in Canada are considered to be balanced now here at the end of 2022. We’ll talk more about that in detail with this last weekly blog entry here for the year, and mention briefly as well that our online real estate lead generation system in Canada for realtors is an excellent resource for new realtors who may be finding it difficult to drum up new clientele no matter what the market conditions are.
70% in the Middle
Decreases in purchasing power and subsequent drops in demand now have about 70% of Canadian housing markets being balanced according to the Canadian Real Estate Association (CREA). Continuing the trend, November had sales and new listings falling across the country and it is interesting to note how 2022 saw the fewest new listings for that month for any November of the last 17 years.
Their comparison of sales-to-new listings ratios for 101 local markets came back with 69 of them being balanced, meaning supply of housing and demand for it are about the same. 21 checked out as being buyers’ markets and 11 could be seen to be a seller’s market. That’s quite the profound contrast from the beginning of this year when markets all across Canada were decidedly seller’s markets with stiff competition and rapidly rising prices prevailing.
That certainly changed about 3 months later, and quickly and drastically at that. Realtors and industry enthusiasts will know all about the workings of that, so won’t touch on that any further here.
1 of 3
The report detailed further which local markets fell into 1 of 3 categories – buyer’s, seller’s, or balanced markets. Most showed themselves to be balanced and it wasn’t any truer for any region from Coast to Coast in Canada, plus also included some of the country’s most notable housing markets like Calgary, Montreal, and Hamilton-Burlington.
Some of the classic hottest housing markets came in as being buyer’s markets, including the standards Vancouver and Toronto as well as Vancouver Island, Victoria, and Mississauga. A buyer’s market, by definition, occurs when purchasers are in a more advantageous situation than sellers as a result of the number of homes on the market surpassing the number of buyers.
Other notables for this group include Niagara Falls-Fort Erie, Brantford, the GTA, Chilliwack, St. Catharines, Kitchener-Waterloo and Cambridge ON was right on the edge of going either way.
Of the 11 markets that came in as being seller’s markets, nearly all of them were in more remote areas where housing demand is typically never as high as elsewhere. That likely doesn’t come as a surprise, but areas like Timmins and Medicine Hat. Prince Albert, Northern New Brunswick, and Central Alberta are the furthest into buyers’ market territory.
One notable takeaway is that a senior economist at the CREA did say that all of this could change quite considerably come springtime 2023, adding further that it will be interesting to see what buyers do when listings start to come out in big numbers in the spring, along with the possibility of the Bank of Canada reversing its rate tightening and then possibly starting to cut them.
Real Estate Leads wishes all of you a Happy Holidays and Happy New Year and we’ll see you next week to have a look at what the Real Estate Market is Foreseen to do for 2023.
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