Our Market Momentum Meter shows that we are currently in a balanced position. It’s great to see indications of a strong spring market for our clients.
After a tumultuous and speculative period in real estate we are now seeing an increase in sales with a moderate supply of inventory on the market, giving our clients more opportunity for buying and selling.
Our Market Momentum Meter indicates that Buyers should be calling the shots now. But interestingly, our clients, colleagues, and our team doesn’t see it this way yet. Most Buyers feel the current inventory lacks in quality and is not presenting a wide selection of properties to choose from.
In most cases, Sellers have not accepted that the value of their property based on early 2022 data is not the value of their property now. However, we have successfully found properties at fair adjusted prices based on a high level of market research, and presenting offers accompanied by our market evaluations.
The latest market data shows that we are in a strong Buyers market. But, some Buyers might be thinking, “Wait a minute, why doesn’t it feel like it?” Let’s explore a few factors that are playing a role:
Inventory levels are rising, but they’re still not at historical levels. With limited supply, it’s not uncommon for prices to stay higher.
The Bank of Canada has raised interest rates eight times. This has put a lot of Buyers in a holding pattern which is the major contributor to the lack of sales.
In conclusion, the extreme spike into a Buyers market is not due to rising inventory levels but the fact that there have been substantially less monthly sales.
December and January are the least accurate months for the momentum meter as they do not typically reflect the true state of the real estate market. During the Holiday season, many Sellers take their properties off the market and Buyers tend to be less active.
Inventory decreases dramatically for a short time and Buyers focus on Christmas. Most of the unsold properties will be back on the market throughout January and early spring. At that time the momentum meter should definitively show the type of market 2023 will be.
“Why do we have a dotted line in this month’s graph?” We wanted to note that Skaha Lake Tower Development released 70 units for sale last month which created an extraordinary increase in inventory resulting in a large jump into a Buyer’s market.
The dotted line shows where we would be without this increase, which is a more reasonable representation of where we are at. While we are indeed experiencing a Buyer’s Market it is not as extreme as the graph shows this month.
The Number of properties sold was up 12% over last month with inventory virtually the same. This has moved the meter back down into a balanced market. However, you can see that within the drastic momentum change since March there has been a few months where the momentum shifted but then continued back on trend.
With another interest rate hike and many Buyers and Sellers on the sideline we feel that we will continue to stay between a balanced market and a Buyers market for the next several months especially if inventory stays low.
This month’s momentum meter shows a surprising touch into a buyers market. While one month does not constitute a trend, we are eager to see market activity pick back up for the remainder of 2022.
Sales were way down, interest rates held back many buyers from entering the market, and the change from Summer vacation to Fall and school could have been a factor in this slow down. As interest rates continue to increase into 2023 we feel that the market will continue to trend in a balanced position overall.
This month’s momentum meter shows a dramatic swing from a balanced market to a buyer’s market. While one month does not constitute a trend, it will be interesting to see next months stats as the previous 3 months have been moving in the same direction.
Sales were way down from 67 units in August to 49 units in September while inventory rose from 297 to 311. Increased interest rates, market uncertainty, inflation, and the change from Summer vacation to Fall and school where major factors in the month of September.