The curtain has fallen on the real estate year of 2021. Looking back, it was a year of: offer dates, 24-72 hour irrevocable dates, bully or pre-emptive offers, multiple offers, selling over asking, etc. Yes, it was quite the year with continuing trends that began in the spring of 2020 just after the COVID 19 pandemic took hold. With the recent emergence of the Omicron variant, the pandemic continues to rage on. Will the real estate market continue to rage on too? Based on looking at some data and consulting some real estate resources it seems the market will continue to roll on nicely into 2022.
According to the recently released Royal LePage Market Survey Forecast the aggregate price of a home in Canada is set to rise about 10.5 per cent to $859,700 in 2022.
The homes that are selling are in general selling for over the list / asking price.
As of Dec. 31, 2021, homes in Huntsville are selling about four per cent over the list / asking price whereas back in 2011 homes were selling about five per cent below the list / asking price.
At the present time the market is in favour of sellers. The basic law of supply and demand is dictating some market trends at this time. Home supply is at its lowest point on recent record. In Huntsville, months of inventory as of Dec. 31, 2021 was 1.4 months. The months of inventory has gradually slipped each year from a high of 9.4 months in 2011.
Not only is the inventory of homes for sale historically low, the homes that are listed for sale are selling faster. In Huntsville, median days on the market as of Dec. 31, 2021 was 12 days. Once again this number has gradually reduced each year from a high of 56.5 days in 2011.
Other factors that will likely contribute to a sellers’ market in 2022:
Demand from buyers who were unable to finalize a purchase in 2020 or 2021.
Growing need for homes from newly formed households and newcomers coming to the area.
The current rise of the Omicron variant may contribute once again to more people working from their home bringing into focus the importance of a home as a place to both live and work. Buyers may realize they need to make a change in their housing requirements to accommodate these additional needs.
Typical travel and entertainment tendencies may be held off again and buyers will continue to conserve more cash to possibly contribute to the purchase of a new home or even a recreational property.
Paradoxically the threat of rising interest rates may push buyers into making a home purchase now. It is felt that mortgage rates are likely going to increase at some point in 2022. The onset of higher interest rates, coupled with some unknown factor/event that crops up in 2022, may begin to slow the market down from the lofty heights where the market currently exists.
Notes:
Statistics can be broken down into a multitude of property types and geographic locations. Numbers are quoted for Huntsville Residential Market Activity for properties located both on and off the water.
Sources reviewed to help with the formulation of this article:
CREA Stats: December Residential Market Activity and MLS® HPI Reports prepared for the Lakelands Association of Realtors
Royal LePage’s 2022 Market Survey Forecast
Brian Buffini’s Real Estate Report (Canadian Edition 1st Biannual 2022)
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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
