We have all been sensing a shift in the Real Estate market for the past month and rather than sound the alarm bells, lets get past the “click-bait” headlines and look at what direction the market is truly heading.
The alarming news – Overall, the supply of active homes for sale in Oshawa, Whitby and Clarington are up 28% from this time last year. Shockingly, over the past 8 weeks the inventory has jumped up by over 10%! When we look at the average price ranges for our 3 communities, we see that inventory has increased dramatically. The average selling price for a detached home in Oshawa is $927,000 and if we look between $900,000 – $950,000 we notice that there are 17 homes available. To illustrate how much inventory this represents, at the beginning of January, there were only 18 homes for sale in all of Oshawa.
The reason we are seeing increased inventory is that homes are not selling as quickly as they have been. Year over year, (May/21-May/22) we have had a 60% decrease in the number of home sales. In fact, sales have dropped by 47% in the past 8 weeks.
If you are a Seller or would-be Seller, this is important information indicating a shift is happening. Increasing numbers of available homes is not good news for Sellers, however, let’s dig in a bit deeper.
It makes sense that the values rising over the past several years along with increased mortgage rates are doing what we expect them to do – eventually dampen demand. Mortgage rates tend to raise quickly and lower slowly, so it looks as if we will be seeing higher rates for the longer term. Something to be mindful of, is that historically rates in the 1% – 2% range are not what we would call normal. Rates in the 7% – 9% range are more common for mortgages.
What we are seeing is happening on both ends of the “supply/demand” principal. Lower sales and an increase in homes for sale, sitting longer before they sell. This allows inventory to build over time getting us to where we currently are.
Not all price points are experiencing rising inventory, or slower sale times. Here are some of the “hot” price ranges in our communities:
Home sales in Clarington: homes selling for over $1,000,000 are still moving quickly. There were 7 homes sold over $1M over the past week, 5 at asking price or above and they averaged 10 days of time on the market.
Home sales in Oshawa: in the past week there have been 12 homes sell between $750,000 – $850,000 with 9 selling for more than asking averaging 11 days on the market.
Home sales in Whitby: between $800,000 and $1,000,000 there have been 11 homes sold in the past week, with 7 selling for more than asking, averaging 8 days of marketing prior to selling.
A bit of a reality check when I am asked, “are we now in a Buyers market?” The definition of a Buyers Market is when it takes 4 – 5 months to sell the average property, so when we see market times of under 2 weeks the indication is we have moved from a “frenzy” Sellers market to a market where, when homes are priced and marketed effectively, the Sellers still have the edge.
The optics of this market are bittersweet. For Sellers, time has not been your friend over the past few months with prices adjusting to values back to last fall. For Buyers who feel that prices may continue to decrease and think waiting may be financially beneficial, we are expecting mortgage rates to increase several times over the next few months.
I remember in the early 1990’s a mentor who had been in Real Estate for decades giving me some sage advice that I have never forgotten. “We can’t predict the future; we only know what is happening today. If you are planning on selling soon, do it now. If you are a Buyer, find a property as soon as you possibly can. This market can change overnight. We only know what is on the table today.”
Selling a home in Oshawa. Selling a home in Clarington. Selling a home in Whitby.
- Interview several agents to get a sense of what the differences are.
- Ask the agent where they are on the top 100 list of realtors for the Durham Region.
- Get a written action plan.
- Do a “google” reference check. Does the agent have a Google My Business page? How many Google 5-star reviews do they have?
- Ask for references, and reach out to them.
- Be aware that the suggested asking price may be accurate or a sales pitch to gain your business. Have the agent show you why they think it is worth the value range they recommend.
If you have any questions or would like a strategy on how to sell your home in this uncertain market, I can be reached at lindsay@buyselllove.ca