In some cases we are actually seeing prices we might have seen at the peak back in February 2022.
This would have likely been inconceivable even a month ago, and yet here we are.
The only thing holding us back — or perhaps I should say, propping us up — appears to be the reality we are also contending with the tightest inventory levels in decades.
As such, affordability, or really the complete lack thereof, seems to be secondary in the face of such buyer motivation.
While some have quite clearly determined the worst is behind us, others are bracing themselves for what comes next should economic hard-landing lie ahead — a painful recession with widespread unemployment isn’t a complete impossibility is it?
Nonetheless, at this moment there are a whole lot of buyers willing to throw caution to the wind and shoot their shot.
For a whole generation of Boomers well into retirement, sitting on a windfall of equity, and grappling with the when of downsizing into that perfect condo, the last year has likely included feelings of regret in those banking on their homes funding their next act.
As transactions ground to a halt and prices fell, there were many wondering if they had missed their moment in their attempt to catch the top of the market.
With only previous corrections to use as a guide, the possibility that recovery could take years with prices grinding sideways for the foreseeable future was a reasonable belief that likely fuelled some regret over the past 12 months.
Clients who had planned to take their time and consider listing in the fall are now charging full speed ahead into purpose-built rental buildings, recognizing a viable, though perhaps not completely ideal, interim solution as they contemplate what’s next while still getting their houses up on the market to catch this rally.
If enough older homeowners cycle out of the housing market, one could reasonably assume that this will unlock the chessboard allowing for some movement. Every agent I know has a list of move-up buyers waiting in the wings, ready to rock and roll the moment the right house comes up.
If interest rates sitting at 6% aren’t pressuring average sale prices down anymore, it’s more likely that insufficient inventory is the real element at play and that isn’t likely to improve any time soon.
Especially when we have municipal governments doing pretty much everything but prioritizing getting housing built, a federal government barrelling right ahead with their plans to welcome as many immigrants as possible with seemingly zero concern as to how to house and service those new Canadians, and housing starts at all-time lows.
If and when rates come down even slightly, which industry experts seem to think isn’t so far off, I suspect we will be looking at the cycle starting all over again, which will be terrible, terrible news for the generation of Canadians priced out of housing.
But are people furious? Because they should be.
