It’s plenty warm here on the West Coast of Canada already, and some would go further to say its downright hot. Spring 2023 seems like it is heating up the real estate market in Canada too, and it may well be that the thaw being experienced with median home prices is a good indication that the chill that set over the market over the last 14 months or so is coming to a definitive end. That’s something that has been forecasted for many months as well, and the positive in it all promises to be that more homes will be put on the market to provide much needed supply that is more capable of meeting demand.
The high demand part of the equation is always going to be a part it here in Canada. As has been discussed at length in real estate market circles, so many homes that would have been listed recently were not listed as owners chose to delay that until they could foresee getting the value they need to get for the home. There are always going to plenty of owners who would like to sell, but don’t need to and if the trend of increasing average home prices continues then more of these homes will be put on the market.
For realtors this will be encouraging of course, and it should be much the same way for prospective clients who can afford the home and will likely having more of them to choose from. Our online real estate lead generation system here at Real Estate Leads is a proven-effective means for realtors to get something of a jump on their competition and be first-in-touch with potential home sellers or buyers who may be more motivated to make their move now that the thaw is well underway.
Rate Hikes Now Non-Factor
The biggest reason median home prices declined was due to interest rate hikes over last year, but the average price of a Canadian resale home has now increased for four months in a row, from January through to the end of April 2023. The CREA (Canadian Real Estate Association) reported at this time last week that $716,0000 was the average selling price for a home sold on MLS last month (April ’23). That’s up from March in the same way March was up from February, and February from January.
All to the tune of an average home price increase of more than $100k since the start of the year. Quite a marked change from February of last year when the average home price peaked at $816k but the chill began and primarily because of the way higher mortgage rates made it more expensive and riskier for people to finance the purchase of a home. It’s understandable that many people saw the possibility over overleveraging themselves.
A short time later average prices bottomed out to $630,000 by midsummer 2022, but the market resumed its upward momentum as fall and winter leads us to where we are now in late Spring / early Summer 2023. As you’d expect, the GTA and GVA areas are the two areas fueling this rise in average home prices, and these regions also saw the biggest gains during the early days of COVID-19, plus the largest declines once interest rates were increased by the BoC.
5k+ Increase For Smaller Markets Too
Even if we remove those 2 regional markets the national home price average still stays well above a half million dollars – an average of $572k per home if you exclude the values for ones in the Toronto and Vancouver areas. Sales as a whole are up too, with the CREA reporting an 11% increase for the number of homes that sold during April and up from March’s 44,059 of them being sold. Sales volumes are at their highest level since last June, but still coming in at 20% less than seen during the feverish market of this time last year.
Home sales continue to rebound from the multi-decade low we saw at the beginning of 2023. That trend has been buoyed by solid job markets, lower interest rates and a buyer psychology that has changed and become more enthusiastic based on the right mix of affordability plus solid sale prices for home sellers but with the ongoing challenges of subdued supply playing a disproportionately large role in pushing prices higher.
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