I had a conversation with a newer agent over the weekend who did their best to convince me that we are in a full-on Buyer’s market. The number of homes for sale is up, prices are flat, and the selling times have increased. I simply nodded thinking to myself, “this agent may have never seen a true Buyer’s market.” Let’s dig in and see what type of market we are currently in for Real Estate in Durham Region.
When we use the terms Buyer or Seller’s market, what we mean is defining who has the advantage. The other type of market is termed “Balanced” and rarely do we see a balanced market for a long period of time. What defines each type of market is how long it takes to sell a home. In the industry we look at this as “months of supply of inventory.” Meaning, you look at how many homes sold in a particular month and divide that into how many homes are left unsold at the end of the same month, identifying how many months of supply are left based on current selling trends. The more months it takes to sell on average, the slower the market. Let’s look at the definition of all markets.
Active Seller Market: 0-2 months of inventory – Active Seller market with increasing prices and bidding contests.
Normal Seller Market: – 2-3 months of inventory – moderate appreciation with bidding contests at certain price ranges.
Balanced Market: – 3-4 months of inventory – stable prices with longer selling times.
Flat Market: – 4-5 months of inventory – Buyers in control and pressure on prices to decline.
Currently this is what our landscape in south Durham looks like for markets:
Oshawa: 3 months of inventory. (Normal Seller/ Balanced Market)
Whitby: 2.4 months of inventory. (Normal Seller Market)
Clarington: 2.5 months of inventory. (Normal Seller Market)
What we are currently in is a normal Seller Market. This is an overview, however, by looking closer at individual price ranges the months of supply change dramatically.
Let’s look at a $50,000 range around the average selling prices in the above 3 communities.
Oshawa: Average sale price $857,000 – 4-month supply of inventory. (Flat Market)
Whitby: Average sale price $1,087,000 – 2-month supply of inventory. (Normal Seller Market)
Clarington: Average sale price $943,000 = 1.6-month supply of inventory. (Active Seller Market)
Once you look a bit deeper you can see that currently Oshawa is in a Flat market whereas Whitby and Clarington are in a Normal Seller market.
It is important to understand how by knowing these numbers and the ability to see trends with the information can assist Buyers and Sellers. For a Buyer, this illustrates how easy or difficult it will be to buy a home in their price range. It helps Sellers as well by informing them how easy or challenging it will be to find a Buyer. Last month in Whitby if you were a Seller or Buyer looking to buy or sell around $1,050,000 you would notice that the inventory was around 3 weeks. This means that as a Buyer, you most likely will be involved in a bidding war to purchase your home and the lucky Sellers will most likely get their home price bid up higher than they expected. The results from this example were that homes in Whitby last month in this range sold for 6% over the asking price. That is approximately $58,000 over the asking price. This is a true Seller market.
The results for May have not been finalized yet, however with the anticipation of mortgage rates decreasing on June 5, I am guessing at the end of June we will be in a heated Seller market.
My recommendation is if you are a Buyer, consult with a full time Mortgage Broker and have a pre-approval completed and start your search before we slip into a Seller market. For Sellers, get your seat belts on as June looks like the month Real Estate prices will grow faster than the grass on our lawns.
If you are interested in sitting down to see how the current market looks like for you to buy or sell a home in, I can be reached at lindsay@buyselllove.ca or 905-743-5555.
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