There are two parallels with the economy that are unfolding. One is the stock market, and the other is our local Real Estate market. The Dow Jones had an amazing rally that started in July and peaked in mid-August. Below is a graph and for those who like numbers, at the beginning of August the Dow was at 32,800 and climbed to $34,000 by mid-month, only to reverse direction and end up at 31,500 on Aug 31st. A great question is it time to buy or time to sell? Is this a blip of the start of a slide?
Let’s look at the local Real Estate market and see if we can draw some comparisons.
Here is what the months of July and August looked like for our local real estate market. (Detached homes)
Area. End June/22. End July/22 End Aug/22
Oshawa $885,700 $815,000 $855,000
Clarington $999,500 $908,400 $1,017,000
Whitby $1,122,700 $1,100,700 $1,088,600
We can see that during the month of August, Oshawa and Clarington had huge jump-ups in value, whereas Whitby had a very slight reduction in average selling prices. Is this a blip like with saw with the stock market, or a sign that we have hit bottom and the prices are springing back up?
Typically, if there was a time when the average prices slip in a “typical” market, it would be the summertime. With the weather, backyard BBQs, holidays and a myriad of distractions, inventory builds and sales slowdown during July and August. However, this year we saw a very unusual rebound. What is fascinating is that in all three communities, the sales from July – August increased while the number of homes for sale fell. This is unusual and explains why the values have been increasing. Again, the question is “blip or trend?”
In a regular year, we see a huge increase in Buyers once the kids get settled in School, starting around the end of the first week of September and the ground feel is that that is exactly what is happening. The one caveat is the mortgage rates. We are expecting a Bank of Canada rate increase on Sept 14th, and this may cool things in November/December as most serious Buyers will have locked in pre-approvals ensuring they get the lower rate in the event the rates rise.
This is an interesting time for Real Estate, and my instincts tell me that we have seen the bottom, with values increasing as we move into 2023. If you are a Buyer time may not be your friend, so buy soon and for Sellers, if I am wrong, holding off may cost you money down the road.
A wise mentor share with me decades ago a quote; “we only know what the market is like today. If you have a desire to sell, do it now because we cannot guarantee what tomorrow will bring.”
If you have questions about our Real Estate market, getting pre-approved or how this market is impacting your home I can be reached at lindsay@buyselllove.ca