Home prices continue to fall, something we’re certainly seeing in Kitchener/Waterloo.
The average sale price of a home here fell another 8% in June; it’s now down 22% compared to the peak in February. The average detached home is only selling for 2% higher than it was one year ago, while attached homes are still 10% and 11% ahead of June 2021.
The average sale price of a detached home in June was $907,363. For an attached home, that number was $673,351 and for condos and apartments it was $497,429.
“It seems inevitable that we will soon see year-over-year sale prices cross into the negative numbers within the next few months,” says Greig Turvey, Sales Representative, GoWylde Team/ReMax. “I predict that prices will continue to fall through the end of the summer, and that September will be the first chance for prices to stabilize.”
Average inventory, at 1,144 for the month of June, continues to trend upwards. That’s up 9% when compared to May 2022 and is 142% higher than June 2021.
While the number of new listings is up significantly from last year, this stat is rather meaningless unless you take into account a bit of extra context, says Turvey. That’s because 604 listings were either cancelled, expired or suspended in June. “Many of these properties end up being re-listed at a different price. It’s impossible to know how many of these ‘new listings’ are actually new—without going through all 1,144 of them. It’s safe to say that this statistic overestimates the actual number of new properties hitting the market by at least 30-40%,” the agent cautions.
Another interesting stat that Turvey has taken note of is that of the properties that are selling, 65% are selling over list price and the average list-to-sale price ratio is still over 100%, at 105%.
“The strategy of listing low and holding offers for a specific date is becoming less and less effective, but it can still work well compared to just listing a property at a price you are hoping to get and taking offers anytime,” says the REALTOR®.
“At least with having a specific offer date, you are motivating buyers to actually make an offer if they are interested in the property. This strategy works well for certain types of properties, but it shouldn’t be used for others.”
Of course, we can’t talk about housing prices without addressing the rise in interest rates. With the Bank of Canada set to raise the overnight rate by an additional 75 basis points on July 13—the largest increase in almost 25 years—and another hike likely to come in September, many buyers are in no rush to purchase a property right now. It seems like everyone who can wait is indeed waiting.
Says Turvey, “This of course becomes a self-fulfilling prophecy, causing a downward spiral of prices. There is still a lot of pent-up demand for housing, and the issue of low supply has not been remedied. Once it becomes clear that we’ve hit the bottom, I think it’s very likely that we will quickly enter a very competitive sellers’ market once again.”
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.