It has been 3 weeks since the Bank of Canada decreased their lending rate by ¼ percent and thought it would be a good exercise to see how the market has reacted.
From Whitby to Clarington there are currently 888 detached homes for sale. At the beginning of June, the inventory was 725, an increase of 163 homes for sale. Sales in the same area are down by 106 homes up to June 24th and the average market time is unchanged at less than 30 days. My experience tells me that during most summers we see a slowdown in sales and an increase in homes for sale, causing me to think that this is a normal sales curve. During the same period in 2023 the number of homes for sale locally increased by 35% May over June and the sales dropped by 20%. When you dig into the numbers it shows that the month of June in both years saw increasing inventory and declining sales however last year the inventory increased dramatically faster than it has currently and the number of sales this year has dropped slightly. A great question would be, “who is buying the homes today?”
When you look at the three generations who make up the majority of Buyers and Sellers you will find: Millennials (30-44), Generation X (45-49) and Baby Boomers (60-78). Of these 3 groups Millennials have the highest average income at $53,000/year with Generation X earning $40,000 and Baby Boomers making $43,000. It appears that Baby Boomers and Gen X’s that are the ones on the move and home ownership highest with Baby Boomers. 76% of the Boomers aged 60-69 own their own homes. Along with high rates of ownership, this group tends to be the one that increasing mortgage rates are most negatively impacting.
The average price for all home sales this month in Oshawa is $870,000 and it is no surprise that the most active price range for sales is $700,000 – $900,000. This range tends to be active with Boomers and Millennials. This makes sense as the Boomers may have built up equity from owning for a longer time period and the Millennials with their strong incomes.
People buy and sell homes for several reasons: moving up, moving down, moving out, families increasing or getting smaller, family deaths and divorce. The reasons for moving can be place in two groups – “needs and wants.” The need group would be divorces, financial challenges, deaths and the wants group would be people moving to make their situation more comfortable. The “wants” group are the people who are mostly affected by the economy and rates, and as we have seen the market stall responding to mortgage rates climbing. Likewise, as rates drop, and homes become more affordable, more people choose to move to a new place they would want to live.
Currently I am noticing homeowners shifting locally and a large influx of Buyers from the west end of Toronto, many new to our country. As we move further into the summer market, with more rate decreases expected, the is a good chance we will see Millennials and Gen Xers become more active in our community.
The hard reality is that in order to afford the average home in Oshawa, (the lowest average prices in Durham Region) a Buyer would need a downpayment of $90,000 and a family income of $200,000/year. This high cost of entry is one of the reasons we are seeing fewer first-time buyers and more Buyers who currently own homes moving up and down. And given what most economists predict, the cost of getting into home ownership will only get more challenging, making this the best time to enter the market.
If you are considering a move, either to buy or sell, I would be happy to guide you through the process. I can be reached at lindsay@buyselllove.ca or 905-743-5555.
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