The end of the year is coming at us fast, and along with the report cards our kids will be excited to show us (or will hide in their backpacks,) we also have a report card for how Real Estate has reacted to the uncertainty of our economy and rate hikes.

On a positive note, here is where Durham Region Real Estate prices have historically been over the past decade.

Average of all homes:

2013 – $357,500                                  2018 – $594,000                    Nov/2023 – $981,000

2014 – $391,700                                 2019 – $611,300

2015 – $442,000                                 2020 – $707,000

2016 – $553,800                                  2021 – $1,179,000

2017 – $628,000                                 2022 – $1,124,500

Over the past decade Durham Region prices have increased by $634,000 or by almost 300%. It is easy to see that the prices have increased and then dipped on a very irregular basis. When I think back about the times that we lost value, one example comes to mind. It was in the spring of 2017 where values dropped dramatically after a foreign Buyer tax was implemented. That decrease happened quickly and was severe, however it only lasted 1 ½ years and 2 years later the market returned having almost doubling the average sales price. The drop in value we are currently experiencing over the past 1 ½ years was a direct result of increased mortgage rates and inflation. Typically, when things go dark with Real Estate the market cycles out within 2 years.

That brings us to the start of 2024. February of next year will be 2 years since the rates started to increase and the values slipped. The other “outlier” is that the same month the Bank of Canada increased mortgage rates in 2022, a report was released commissioned by the Ontario Government called the “Report of the Ontario Housing Affordability Task Force.” This report identified the fact that Ontario needs 1.5 million homes built to meet demand – the demand was described as a “housing crisis.” Since February of 2022, the market has stalled, values have slipped, and the reality is that Ontario is still in a housing crisis. There is a large group of Buyers who are sitting on the sidelines and this pent-up demand will be unleashed at some point. Quite possibly, 2 years after the market cooled…. which coincidentally happens in the spring of 2024. This could be the best buying opportunity a Buyer will see in years.

There is an expression, “date the rate – marry the home.” This means that once you buy a home, the rate on the mortgage will change, and if a Buyer buys at this time, they will be purchasing a home at $184,000 less than the peak of last year. To put that into context, a decade ago a Buyer would have had to pay $357,000 for a home and our prices have dropped half of that value in the past 1 ½ years.

To quote Warren Buffett, “be fearful when others are greedy, and be greedy when others are fearful. Currently the Buyers who can see past the uncertainty and fear will be richly rewarded.

If you are interested in exploring how buying in todays market can set you up for the future I can be reached at lindsay@buyselllove.ca or 905-743-5555.

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