Continuing with our blog entries early in 2023 here, this news may come as too much of a surprise to some given the nature of existing trends we were all aware of as the market moved through the last part of 2022. But the reason that it is notable is primarily because of the amount of time that has passed since this happened last, and related to some of what has occurred during those 14 years that is still either true or relevant today.
We’ll explain more, and to preface some we’ll mention as well that median home prices are not moving back upwards to the extent many would have hoped since the chill of later summer / fall 2022. Again, as we’ve stated many times that was overall a plus as the market had been extremely overheated over the last 3 years. There are many who would go so far as to say it was grossly overheated, and there were real estate industry pros and economists among them.
There will always be interest groups with opposing views with anything related to the market, and we can all agree that prospective first time home buyers are certainly happy to see median values come down. Problem there being of course the majority of them continue to hope to buy in markets like Vancouver and Toronto where demand / supply imbalances have insulated homes against declining median values. That is always going to be the case. But for realtors there has definitely been fewer homes going on the market, and detached homes especially.
Our online real estate lead generation system here at Real Estate Leads is ideal to make up for any slack when it comes to the supply of new clientele, and we’ll detail more about it at the end of this blog entry. For now let’s stay on topic with the Q4 Home Prices Decline in Canada for 2022.
2.8% Down
Canada’s housing market correction ended the year with the first year-over-year decline for quarterly home prices in nearly a decade and a half, as per a new Royal LePage report. It states the aggregate price of a home in the fourth quarter of 2022 was $757,100, down 2.8% cent for the same Q4 for 2022. Some markets had steeper declines than others.
In the Greater Toronto Area, the aggregate Q4 2022 price for a home was $1,068,500, a drop of 4.6% annually. For Vancouver it was a 3.5% decline year over year to $1,208,900.
Calgary and Montreal actually had modest price growth in the fourth quarter but on a quarter-to-quarter basis, the national aggregate home price continued to decline for a third consecutive time.
All of this needs to be framed in the overarching picture of rising interest rates from the Bank of Canada rapidly cooling housing markets across the country after a flurry of activity during the COVID-19 pandemic.
The CREA’s most recent data indicates that the average, non-seasonally adjusted price of a home has gone down 19% since a Feb. ‘22 peak. Again in a wider context though 0.68% of all homes in Canada were sold during the high point for prices in February and March. This meant the actual exposure most homeowners would have had to the peak would have been fairly limited.
Condos Coming Later
The report also details how the market peaked for some Canadian cities and property types arrived at different times for 2022, and that for condos the price high mark arrived much later in the year. Included as well were modest fourth-quarter decline data that should be understood within the perspective that prices 2 years back in Q4 for 2021 were close to their own peak.
All of this among the general consensus that home prices should decline modestly by about an additional 1% in 2023, and let’s remember there have been plenty vocal groups who are expecting home prices to bottom out sometime in early 2023. If so, that will be attributable to activity picking up once again as interest rates stabilize and buyers return to the market, along with growing demand from Canada’s expanding population and the ongoing shortage of homes nationwide that doesn’t seem to have any solution on the immediate horizon.
We can be fairly sure that there are many sidelined buyers who are waiting patiently for the bottom to be revealed. Provided interest rates stabilize and consumers adapt to their new normal, many of them will be back and this may be occurring much sooner than expected. That bodes well for realtors across Canada, as well for homeowners who have been patient in not putting their home on the market to weather this dip in median home values.
__
Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that we come up with and then forward to you – and only you. You don’t receive all our leads, but the ones you do receive don’t go to any other realtor and they’ll be for prospective home buyer or sellers that are ready to make a real estate market move in the city, town, or region of the country where you are working as a real estate agent. It’s an excellent way to supercharge you client prospecting efforts.
