November Market Update
Leaves are falling and winter’s calling! November sets the scene for enjoying the coziness of the space you call home and finding some quiet moments before the busyness of the holiday season trickles in. Whether it’s pulling out the recipe book to cook your favourite comfort food, or curling up with a good movie or book – November brings a sense of restfulness along with optimism and eagerness for what lies ahead.
This month we take a few extra moments to thank our men and women in uniform ~ past, present, and future. We are so grateful for the country we live in and give our thanks to the heroes who have protected and continue to protect our freedoms as Canadians.
A few of my thoughts on the real estate side as I continue to monitor where the market is headed:
- Home prices have dropped over the last 6 months – this is unarguable. That being said, the figures presented in the media stating 15-20% reductions are misleading. Average home price is calculated by dividing the total value of home sales by the number of homes sold. This formula fails to accurately capture the market if it doesn’t factor in the types of properties being sold. The monthly statistics reveal that lower-value properties (such as condos) have been the recent preference of buyers. The resulting decrease in the total dollar figure of home sales based on the property types being purchased causes the average home price to drop, though not necessarily as a reflection of individual property value. By factoring in the composition of property types, the drop is closer to 7.6%. You can read more about this HERE.
- A mortgage advisor whom I work with closely attended the industry’s national conference last month and brought back some helpful insights. The bank of Canada is fighting inflation as their #1 issue – they will always choose to stop inflation even at the cost of a recession. Canadians consumed 4 years’ worth of goods in 2021 alone, with the heightened demand placed on a broken supply chain. The supply issues have begun to correct, yet The Bank of Canada moves forward on its management of inflation with its aggressive rate hikes in 2022. They will likely raise rates more than needed since results will lag behind rate changes. We can expect 1-2 more increases in 2022, and then they will hold for about a year to ensure inflation is dead. Rate cuts may start in early 2024, but won’t drop to early COVID levels, likely leveling somewhere in the middle.
Should you be looking for someone to chat with about the constantly evolving real estate market and what it means for you, my line is always a safe place to land. Have a wonderful November!