Scrolling through predictions about the coming year the “experts” seem to be contradicting themselves.

” Toronto’s housing prices will likely climb even more in 2023.” “Steep price declines will restore sanity to Canada’s housing market in 2023.” Or still, “Canada Housing and Mortgage Corporation believes the national average home price in Canada will decrease by 14.3%.”

Who or what do you believe? Let’s looks at some predictions in late 2021 and the fall of 2022.

–TD predicts that average Ontario home prices will rise by 19.8% in 2021 and fall by 1.3% in 2022. (Fall 2021)
–CMHC predicts housing prices will rise by 5% in 2022. (Nov 2021)
–Ontario is also the largest market in Canada and has immense momentum behind it, for now it seems the most likely scenario is continued annual growth for the next few years. (Nov 2021)

The predictions over the past few years have been about as accurate as the chances of the fortune inside a fortune cookie, and they are best taken for what they are… an opinion.

So let me bend your ear and offer some thoughts on what 2023 will bring.

To recap this year prices peaked in Oshawa and Whitby in February and in Clarington in January. After these peaks, the market dropped in value and the bottom hit in Oshawa in July, Whitby in August and Clarington saw the lowest prices of the year in July. Then we saw values improve from where they bottomed out. By the end of October Oshawa jumped up by $38,000 with Whitby and Clarington holding values. We seem to have stalled the drop in values, even with several mortgage rate increases since the summer.

One thing I have learned as a Real Estate Agent over the past 4 decades selling homes, is that people become accustomed to whatever is happening over a short period of time. It became acceptable to be one of 30 offers on a home for sale, or to offer over $100,000 more than was asking (I bought a home in 2017 at $115,000 over the asking price). It was also expected in the mid 1990s for a Seller to place their home on the market with the expectations that it would take 3 or 4 months to sell.

I recently stopped for gas and did a fist pump that I filled up for $1.60/litre. Human nature is one of acceptance of what appears to be the norm of the day.

I feel that for 2023 my research and intuition indicate that we will see mortgage rates continue to rise, and as they increase, they will knock some people out of the market. This will hurt first-time Buyers, who are seeing prices decrease yet still be unaffordable due to high rates. However, people who have equity in their homes may find it a perfect time to move up, or move down. There are always opportunities.

My instincts cause me to think that we will see an uptick in sales starting in February 2023, with Buyers and Sellers used to the new landscape of lower prices and higher rates, and by the spring we will see the mortgage rates decline. Typically, Canada follows the financial markets of the USA when it comes to rates and currently and in the United States, mortgage rates are dropping after hitting highs a month or two ago.

Immigration is the one factor that will help to balance out our Real Estate market. We have over 200,000 new Canadians settling into the Greater Toronto area on a yearly basis. That works out to over 15,000 people a month that is new to our areas and needs places to live in. One of the countries that we see many new Canadians coming from is India, and a quick check shows that the home loan rates in India are in the 6.5% – 13% rate, so for these Buyers, the rates are a bargain compared to what they were used to. It is an unfair comparison to look back on 2021 and compare this year to the volume of sales from the previous year, given that last year was the best year ever on record;  my “Spidey sense” has me feeling that we will see a brisk spring and a very healthy summer for sales in 2023.

If you are planning to sell your home in the spring of 2023, I have this feeling that it will be a good time with increasing prices and declining mortgage rates. Could I be wrong? Possibly. If you would like to continue and have a chat about how your property fits into the puzzle of the Real Estate landscape, I can be reached at lindsay@buyselllove.ca

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