Yes, you read that right, bidding wars have returned.
“January 2023 was marked by low sales, low inventory and few new listings. We are seeing that demand is outstripping supply and bidding wars are once again the norm—at least for properties listed under $800,000, particularly freehold properties,” explains Greig Turvey, Sales Representative, GoWylde Team/ReMax.
“33% of properties that sold in January sold for over asking. I predict that this number will increase dramatically in February, since many of the older listings from 2022 have sold and most of the new inventory is attracting multiple offers. The vast majority of properties listed under $800,000 attracted multiple offers,” says the REALTOR®.
The average sale price of a property in the Kitchener/Waterloo area was $723,678. For detached homes it was $891,798, for attached homes it was $610,004, and for condos and apartments it was $493,232.
The average list-to-sale-price ratio increased 1% up to 99%—and this stat will likely be increasing. Months of inventory currently sits at 2.17.
Prices almost always increase from December to January, as sales pick up once the holidays are over. This year was certainly no exception. On average, properties sold for 4% higher in January compared to the previous month, but detached homes were up by 9%, which is significant.
What is causing this uptick in the market? Turvey thinks there are three factors at play.
- Low inventory
The recent uptick is definitely related to a low number of new listings hitting the market. In fact, this is the biggest factor, he says.
- Lower interest rates
While yes, the Bank of Canada increased the overnight rate by 25 basis points on January 25th, it also indicated that this is likely to be the last rate hike. Lenders are now offering lower 5-year fixed rates.
- Higher rents and investors
Rents have increased over 20% in the past year alone. With prices stabilizing, investors are finding it easy to invest in properties that are cashflow positive.
“If you’re thinking of selling, I would definitely recommend trying to take advantage of this competitive market because it won’t last forever. As word gets out and as people get their houses ready for the Spring market, it is likely that we will see a large increase in supply. If you’re a buyer, there are still some great opportunities out there.”
Says Turvey, “This is the perfect time to upsize, as your home will sell very quickly, and you’ll be buying in a much slower-moving market with the ability to negotiate.”
And if you’re looking for an apartment-style condo? You will still have relatively low prices, lots of options, and many great deals.
Stay up to date with the latest market trends in Kitchener and Waterloo with real estate agents Brad Wylde and Greig Turvey.
Visit the GoWylde Team or call 519-826-7109 for more information.