This fall, the Wellington County real estate market continues to adjust to an ever-changing socioeconomic landscape. Persistent inflation, rising interest rates, and two wars have led to uncertain times and lower consumer confidence.
Every quarter, the Bank of Canada surveys Canadians on their consumer expectations. In this third-quarter survey, the majority of respondents believe inflation will persist through the next 12 months, while the gap between their perception of the inflation rate and the actual inflation rate is quite wide. The majority also believes that this is impacting household spending and affordability.
As a result, we are seeing nervous buyers in the real estate marketplace. Unsure of the future, they are tightening spending and are loath to purchase a home in this climate. According to the Canadian Real Estate Association (CREA), September saw sales retreat just over 18% year over year, while new listings sprung up almost 40% from the year before.
For reference, according to CREA, sales are 36.2% below the five-year average and 37.6% below the ten-year average. With improving inventory and lowered sales, we are now in a more balanced market, and prices have stabilized.
The Home Price Index (HPI) uses historical data for context and weighs the value that home buyers place on certain attributes of typical homes that have sold. The system then tracks these benchmark homes across the country to come up with an apples-to-apples comparison between similar properties.
According to the Home Price Index (HPI), Wellington County benchmark prices are only up about 2.1% year over year. That being said, today’s average home price is still 50% higher than it was in September 2018. Furthermore, homes are still selling. Well-priced and/or unique homes are selling quickly, and we are still seeing strong demand from the first-time homebuyer market and sometimes even competition for homes.
With inflation data being released at the time of this writing, inflation in Canada has dropped to 3.7%, and prices seem to be stabilizing. According to Dr. Sherry Cooper, Chief Economist for Dominion Lending, rate hikes are done, but don’t expect to see rate decreases until the middle of next year.
With further economic stability, we expect consumer confidence to return, and with it, buyers. Housing inventory remains a long-term problem and will only add pressure to the market in the near future. Talk to one of our amazing Realtors to see if now is the right time to buy or sell in Wellington County.
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