March market update: House prices fall for the first time in over a year

Yes, you’re reading that right. Last month, home prices actually fell for the first time in more than a year.

“After a record-breaking month, prices in all categories fell. The average sale price in Kitchener/Waterloo dropped 6%,” says Greig Turvey, Sales Representative, GoWylde Team/ReMax. “It appears that we’ve finally reached the peak, with all key indicators pointing to a slowdown from the red-hot market we’ve been wrapped up in over the past year.”

Months of inventory climbed 32% year over year and 20% month over month, though the number of new listings to hit the market was 17% lower than last year.

The average sale price of a detached home was $1,111,212. That figure for attached houses was $818,829; for condos and apartments, $566,372.

The list-to-sale-price ratio is finally trending downwards, though it is still quite high at 26% over list, compared to the peak (30% over list) that was seen last month. 93% of listings which sold, sold for over asking, a number that is down slightly from 96% in February.

“I always have to stress that looking only at the listings that sold does not tell the full story,” Turvey explains. “There were 234 properties that were listed in March that were either suspended, cancelled, or expired without selling. This is almost 25% of the total listings! This is up 65% compared to February, even when you factor in that there were 37% more new listings in March.”

“This to me is the biggest indicator of a cooling market. It’s becoming more and more frequent that nobody shows up with an offer on offer day, or that the seller is not willing to accept any of the few offers that do.”

This doesn’t change the fact, however, that we are still in a sellers’ market.

Most properties are indeed still selling quickly, without conditions, in multiple offers and for over the list price.

What is new is that many buyers seem to be holding out now, assuming that there will be a big drop in prices to come. But it’s not clear, of course, whether or not that will actually happen. Consumer confidence seems to be dwindling and interest rates are rapidly rising, and few people are predicting that house prices will increase.

Says Turvey, “Only time will tell whether or not we see a significant drop in pricing.”

Turns out Turvey’s read on the market situation last month was bang-on. Those signs of cooling he predicted do seem to be here.

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.