Hello and welcome to my April 2023 newsletter where we discuss Real Estate and Mortgage insights and updates, particularly in Ontario and GTA. The previous editions of the newsletter can be found as blogs on my website here.
This will be a focused post covering
- GTA home sales in Q1 of 2023
- 2023 Q1 actual sales vs Q1 sales of the previous 10 years
- 2023 Q1 New listings vs Q1 listings of the previous 10 years
- 2023 Q1 Active listings vs Q1 listings of the previous 10 years
- What this means if you’re
- Looking to buy or sell a home
- A real estate professional
2023 Q1 sales (actuals) vs 2012-2022 (avg) Q1 sales
Here’s a chart showing Q1 sales (actuals) this year vs the last 10 years
As you can see, sales in Q1 have plummeted this year. January was down 54% from the 10 yr average, Feb was down 48% and March came in down 40%. Now normally in the winter months sales do come down, but the scale of the drop this year has been enormous.
One can attribute this to a reduction in affordability because of the extremely high-interest rates and sellers pulling inventory off the market. This is further corroborated by the next two charts showing new and active listings in the same period.
Sales are picking up though. The monthly sales numbers are going up month over month with the gap with the 10 yr average closing. This can also be seen in the deviation line trending up as far as sales are concerned.
2023 Q1 new listings vs 2012-2022 (avg) new listings
As the chart shows active listings are also clearly down as compared to the Q1 time period of the last 10 years. Here, the trend is down and the gap is actually widening. It means month on month fewer and fewer new listings are coming into the market than in the previous 10 years.
2023 Q1 active listings vs 2012-2022 (avg) active listings
The active listings comparison chart above also shows that sellers are being very cautious. They are not entering the market in huge numbers as has been the norm over the previous years. And more importantly, the number of forced sellers – due to unfavourable economic conditions, and rising interest rates, is still much lower than many had expected.
What does the sales data indicate
If you’re a potential homebuyer or if you’re looking to sell your home
Homebuyers
For homebuyers, the still-below-peak prices make this a potentially good entry point. Combine this with a pullback in interest rates over the last few months and you start looking at pretty good conditions.
If you’re currently renting and can qualify for a mortgage then it’s a no-brainer. (If you’re unsure that you will qualify for a mortgage, then please reach out for a free mortgage consultation.) Yes, the lack of inventory is a downer but that shouldn’t be too much of a deterrent to at least start looking for properties you might like.
Sellers
On the other hand, if you’re looking to sell your property the lack of inventory makes this more of a seller’s market. I’ve directly seen homeowners who were trying to sell from the end of Nov last year, getting a very good price for their property in the last few weeks. If you’re thinking about selling please check in with your realtor (or reach out to me for a referral to some amazing realtor partners that I work with every day)
Lastly, if you’re one of those homeowners who unfortunately has been affected and pushed beyond your means by the rising interest rates, then this could be a chance for you to get out either by refinancing or by selling your property. If you’re in this situation, please reach out. I’m already working with several such homeowners to try and restructure their mortgages.
If you’re a real estate professional (Realtors, RE lawyers, Mortgage brokers etc.)
If you’re a real estate professional then the Q1 data would be depressing. The drop in volumes is affecting all of us. But there is some good news with sales volumes picking up in March and hopefully the trend continues. Furthermore, the Bank of Canada is keeping up with their wait and watch approach so at least rates aren’t increasing.
Now, whether the spring and summer markets get back to the heydays of 2021 and 2022 is questionable at best. It’s time to dig in and keep reaching out to educate and help clients. Also just maybe prepare for a subpar real estate market at least for the short to medium term.
