April Market Update
What A Difference A Day, or Rate Hike Makes!
For the past two years we’ve been reporting nothing but increases in the monthly real estate stats with new records being set monthly! That ship, however, has now left the port!
Unit Sales were down from March by 21.6% in Durham Region and down 38.5% from April of 2021. Across the whole GTA, sales were down by 41% from the same month last year. We can clearly see a retreat to the sidelines by some buyers as the first two rate hikes start to take effect (more hikes to come).
The number of new listings was down by 5.4% from the previous month and while the lack of inventory was a key factor pushing up prices over the past couple years, the average sale price decreased by 6.4% over the previous month. Add to that the 6.5% decrease in Average Sale Price from February to March of this year, we have now lost about 13% off this metric so far this year. That said, the Average Sale Price is still up by 19.8% over April, 2021 in Durham Region. It may be awhile yet before that gain is erased!
Active Listings increased by 30.6% from March to April. I reported that the number of new listings was actually down by 5.4% however the sizeable decrease of 21.6% in sales contributed to the large increase in available, active listings. This metric is the one that was historically low at the beginning of the year, and, in fact, the lowest I had ever seen in 25 years. It stood at 152 Active Listings in December and 336 in January in Durham Region. April’s number came in at 1,278. The lower this number is, the higher the sale prices go due to Buyers competing for fewer homes. When you hear the term “market shit” it refers to a balancing out of supply and demand. Supply is increasing as we exit COVID and more people are listing their homes while demand is decreasing due to interest rate increases and inflationary pressures.
The Sales to New Listings Ratio is beginning to decline, as would be expected. It stood at 74.5% in April compared to 78.4% in March. This metric defines a balanced market as opposed to a Sellers or Buyers Market. A balanced market is when this percentage is between 40% - 60% so, it’s still in Seller Market territory, however, it’s becoming more challenging to achieve a successful sale with new marketing strategies and expectations coming into play.
The Average Sale Price dipped from 123% in March to 114% in April; still very strong by historical measurements. Months of inventory stood at 0.6% and this figure is expected to rise as we continue through the year. Bottom line, this is a very, healthy market with some sanity coming back to the marketplace. We welcome the shift.
I often glance back at 2019 which represents an uneventful but balanced market. The Sales to New Listings Ratio stood at 49.5% for April, 2019. The number of Active Listings was 2,005, Months of Inventory stood at 2.5 months and the Average Sale Price was 99% of asking price. Compare those percentages to the ones above and you might see where we’re headed!
Thinking of Selling or Buying this year? The rules of the game are changing and you need up to date, expert advice to successfully navigate this market. Call or email for a private, no obligation consultation. Call Lisa at 905-442-5847 or email: lisa@williamsandfollows.com
