Buyers Market? Sellers Market? Or Balanced Market in Durham Region.

Can Buyers finally catch a break? This week’s blog is focused on what has happened in the previous seven days. There are a lot of different things that are impacting the Real Estate market currently so let’s take a few minutes to see what is happening that is distracting Buyers and Sellers in Durham Region.

The news items that are drawing attention away from Real Estate over the past week are:

• The war in Ukraine.
• A Federal Budget (that included some items to deal with Real Estate.)
• Mortgage rates forecasted to increase by ½% next month.

We, as a community are so easily distracted. I hear someone yell “squirrel” and my head immediately spins. However, as we are distracted by the current events, what is happening in Real Estate is the inventory is building, the number of homes selling for over asking price are slipping a little and (over the past month) values are coming down.

Currently in Oshawa, Whitby and Clarington we have a total of 489 detached homes for sale. Compare that to the end of March, our 3 communities had 336 homes for sale. That is an increase of 46% in less than 2 weeks. Prices in Oshawa and Clarington have increased marginally with Whitby dropping a small amount. What this trend, if it actually is a trend and not just a “blip” will do is to allow a more balanced market for Buyers to purchase in. What I am seeing is that homes that are a bit more “average,” meaning homes that a Buyer will find a good selection of, are the ones that are seeing prices that are selling at or below asking prices. Examples are older detached bungalows. Currently in Oshawa, there are 47 bungalows for sale. With this much selection, Buyers have a bit more room to negotiate. Last month Oshawa had 100 bungalows sell, and with the inventory as high as it is, the Buyers have more purchasing power then seen over the past few months.

This is not to say that a home that has some “standout” features is not getting attention. We are currently selling an 1,800 sq ft walk-out bungalow in Courtice on a ravine and over the past 5 days we have had 18 agent showings and 22 groups through the weekend open houses. Another country property we are selling listed just under $2 million has had 22 agent showings and 18 groups tour on open houses. The unique and highly desirable properties are still highly in demand.

What I have observed is that there has been a little lull in the Buyer activity, that the increased number of homes for sale are related to this lull and not due to new inventory entering the market. The main issue that we have been dealing with, being a lack of new-build inventory, has not changed. This is what we need to create long-term trending to balance the market. We are seeing a shift, one that may be a few weeks or months in duration.

A metric I follow, is how many homes are selling conditionally. With conditions such as home inspection and financing. Over the past year and a half, we see most sales happen with Buyers offering unconditionally, however we are beginning to see some conditional sales taking place. In Oshawa, Whitby and Clarington, over the past week, we have had 6 homes sell conditional upon financing and 7 on home inspection. Albeit a small number when we see that there were 175 sold in total.

Markets are always in flux, and some changes happen at a snail’s pace, other times we see dramatic corrections. My view of the market today, is that we are, in the short term, moving to a more balanced Real Estate marketplace and once the distractions become lessened over time, the buying frenzy will continue.

One of the Buyers I chatted with over the weekend drove from Mississauga to tour my open house. I asked them why they are looking in the Clarington area and the reason was one I have heard over and over – Homes in Mississauga are on average $1.89 million and in Clarington the average is just over $1.15 million. Everything they look at is like a “fire-sale” bargain compared to Mississauga.

Definition of Buyers Market:

• 4-5 months of inventory of homes for sale. Buyers are more in control with pressure on prices declining.

Definition of Active Sellers Market:

• 0-2 months of inventory of homes for sale. Sellers in control with high appreciation and multiple offers.

Definition of Normal Sellers Market:

• 2-3 months of inventory of homes for sale. Moderate increase in  home values.

Definition Balanced Real Estate Market:

• 3-4 months of inventory of homes for sale. Little increase in home prices

If you have any questions about the market, or would like to see how a strategy can help you sell your home in Oshawa, Whitby or Clarington I can be reached at lindsay@buyselllove.ca or 905-743-5555