After last year’s market, there’s no surprise that home buyers and sellers are curious to see what the 2022 housing market has in store for Ontario. Especially since it was this time last year (end of February to March 2021) when the market shifted, and we started to see a drastic increase in home prices as well as multiple offer situations.
To keep our clients in-the-know, we’ve been supplying monthly updates on what we’ve been seeing in the market. However, given the results over the past few weeks, we thought we’d share an update for all, reviewing the past quarter.
Here’s what we’re noticing right now.
Multiple Offer Situation and Home Prices
One of the biggest challenges for homebuyers in 2021 was the increase in multiple offer situations. Last year, home sellers were seeing anywhere from 5 to sometimes upwards of 50 offers being presented on a home, driving prices up.
This year, we’re not seeing this. When it comes to offer night, fewer offers are being presented on homes, and in some cases, we have even seen a few homes end up with no offers at all. This is causing homes to be re-listed with a price change, hoping to attract more buyers or instead, the right buyer for the listing.
At the time of this publication there are over 400 homes for sale in Oakville, and over 60 have had a price change (either an increase or decrease from the original price), in homes to attract buyers. That’s 15% of the homes on the market in Oakville!
At the beginning of 2022, we noticed a bit of a lull in terms of homes coming out on the market. While this is typical, it was interesting to see this momentarily pause, given the frenzy of the past 12 months.
In early February we saw our first influx of homes come out into the market, as there was a 23.5% increase in newly listed homes compared to January. Then again, we saw the usual rise in March, as sellers prepared for the highest home selling season, spring. What we’ve noticed here is that there is more inventory available compared to last year, especially since January of 2022, causing home buyers to have more purchasing power than they previously did over the past few months.
What’s Happening with Mortgage Rates?
As we shift our attention to mortgage rates; just over halfway through the first quarter (April 13th) we had a 1% increase in rates. Over the next year, we are expecting to see an increase of four or more times, in which buyers will have to be prepared to meet the new Mortgage Stress Test guidelines.
Rates are still at an all-time low, and though there is speculation on what will happen over the next year, we still believe that this will not have an impact on sale prices, given the strong demand for the housing market.
Homebuyer or Home Seller Market?
The question now is; “Are we still in a seller’s market?” The answer is yes. Though we are noticing a shift and fewer offers are being presented on offer night, the average home price is still climbing. For example, when taking a look at home prices in February 2021 compared to home prices in February 2022, we notice a 20.5% increase in price.
In addition, Canada’s Benchmark, according to RBC Economics, is forecasted to rise by 6.2% this year, which although seems high, is lower than last year’s growth rate of 17.8%.
So, What Should You Do Now?
If you are a buyer: while prices are higher, buyers should feel confident in entering or re-entering the market, as there is more inventory to choose from and fewer offers being presented on offer night. Not to mention, mortgage rates are still extremely low at this time. If you have any questions or concerns about buying a home, be sure to check out our Home Buyer’s Guide.
If you are a seller: it’s still a seller’s market! However, sellers should be prepared to receive fewer offers on offer night and expect their homes to be priced closer to market value. Though this is nothing to be concerned about, given that the average home sale price is increasing month over month and of course, year over year. If you have any questions or concerns about selling your home, be sure to check out our Home Seller’s Guide.
We are three months into the year and already, we’re seeing an interesting shift in the market. While we are in a transition period, it’s important to note that there will not be any abrupt changes, especially anytime soon. However, this does appear to be the first few signs of returning to a more “normal” market. If you have any questions or concerns, feel free to contact us today.