…or is it just winter?

I returned from a Real Estate conference in Arizona on Monday. It was wonderful to be in a new area surrounded by some of the best Realtors in the USA. (I believe Wendy Starr and I were the only Canadians.) One thing we quickly came to understand was that every Agent we spoke with was dealing with the same low inventory market with homes selling above asking and prices increasing dramatically. These market forces do not observe borders.

While I was in the USA, I happened to read a few articles in the Canadian media and observed some discussion of local Durham Agents and homeowners/ buyers suggesting that there is a chill happening in the local market. Some even suggested that a crash may be coming. Let’s dig in and see if some local metrics can shed some light.

February/22 was a busy month for Oshawa, Whitby and Clarington home sales. In fact there were 516 detached homes that sold! At the end of the month, we had 310 homes on the market for sale. If we compare this to Feb/21, there were 659 homes sold and at month end there were 399 homes for sale. A quick guess would indicate that we are down in the number of sales, however things are not always what they seem to be.

A good place to begin is looking at the prices of detached homes and how they have changed since the first of January/22.

Oshawa:      January 1/22 $1035,000 March 1/22 $1,218,000  + $183,000
Whitby:       January 1/22 $1,259,000 March 1/22 $1,548,000  + $289,000
Clarington:  January 1/22 $1,109,000 March 1/22 $1,257,000  + $148,000

The increasing values have skyrocketed, in fact, year-over-year our communities have increased about 40%! However, things are not always what they seem to be.

The more I thought about it, the more I felt “those people” chatting about a market slowdown must know something I was missing. I dug a bit deeper and here is what I found that may give some insight into what is causing that fear. On the MLS system we can report homes in a few different ways – as active (available for sale,) as sold, as sold conditionally or as terminated. Let’s focus on the terminated status.

What terminated means as a status is that a property was introduced to the MLS system as a home for sale and at some point, the Seller and agent terminated the listing removing it from the market. An example of this was a home that was recently listed for sale in Whitby for $1,029,000 and after a week was terminated, only to be relisted for $1.498,000. It looks like during the first attempt the Agent was holding offers and either didn’t get what the Seller was looking for or received no offers thus terminating the listing and resubmitting at what the Seller really wanted. There were 83 terminations in the past 8 days.

What this metric tells me is that there is some resistance with Buyers to bid up homes that are listed low hoping to create a bidding war getting a flurry of offers with an acceptable offer in the anticipated range. It might be a crack in the foundation, but I don’t see this as an issue to get overly concerned about.

My experience informs me that when we see Real Estate markets that have meteoric increases in value and activity, there are some who love picturing the drama of a crash happening. I remember seeing this downward projection by some in the late 1980s and again starting in around 2010. The Real Estate market has increased in value since the late 1980s when I began my career with 2 drops in value, for all intentions it has been a rising market. For each of those years, there have been “nay-sayers” predicting a slowdown, a shift or a full-out collapse.

I have learned, that when you look at the numbers and understand what the trends say, things pretty much are always what they seem to be.
 
If you have questions, I can be reached at lindsay@buyselllove.ca
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