For the third month in a row now it has been the same story: prices and the number of home sales have continued to slide.
Sales are actually down 25 per cent year over year. In May, they were the lowest they’ve been in over five years — the lone exception, of course, being 2020, when we were just starting to emerge from the first wave of lockdowns.
Prices are falling across all categories, down between five to nine per cent month over month. They’re down 15-20 per cent since the peak in February of this year.
The average sale price of a detached home in Kitchener in May 2022 was $985,140. For an attached home, that number was $707,888 and for condos and apartments it was $544,823.
One stat typically peaks in May of every year: the average active inventory.
Right now, this figure is at its highest level in three years. “I suspect that it will continue to climb into the summer,” says Greig Turvey, Sales Representative, GoWylde Team/ReMax. There are almost double the number of active listings now, compared to the next highest levels back in 2021 or 2020.
“The best five-year fixed mortgage rates that I’m seeing are all well over 4%. This has increased the mortgage payment by over 30% compared to when rates were around 2 per, and it reduces the portion that would be paid towards the principle. So it’s no wonder that buyers are pulling back. Despite home prices falling 15%, your mortgage payment would still be about 15% higher than it would have been six months ago. Combine this with high levels of inflation and talks of a recession, and I’m not surprised that the same people who were desperately putting in offers just a few short months ago have now taken the ‘wait and see’ approach,” says the REALTOR®.
Does that mean, then, that it’s a bad time to buy? Not necessarily, says the agent.
While he thinks that statistically prices will continue to decline until at least September, it is still possible to get that August price today. Sellers are seeing and feeling the new market we’re all in and they are becoming much more flexible and motivated.
"For the first time in years, buyers finally have the chance to really shop around and negotiate, and they should take advantage of it while they can, because it will not last forever,” Turvey says.
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.