February was an interesting month in the real estate market. The leap year spared us from seeing a decline in year-over-year sales, with 29 sales reported on the 29th, bringing our total for February to 470, just 10 more than last year. This means there was no change in sales activity, but the usual seasonal increase was enough to push us into a seller’s market, as I mentioned last month.
However, the level of activity you perceive really depends on where you’re looking. There’s still a significant gap in activity between properties listed under a million dollars and those listed over, indicating that while buyers can generally secure financing, many struggle to come up with the required minimum down payment of $200k plus around $22k in closing costs. Despite only 10% of properties selling over asking price in the entire market, a whopping 40% of houses in the core priced between $900k and $1M have gone over asking so far this year. This creates a competitive and stressful environment for buyers in that market segment, while those in higher price ranges experience less urgency.
The disparity in activity also extends beyond price. The westshore market, for instance, was hit harder by rising rates, resulting in higher months of inventory, lower average days on market, and a higher sales-to-list-price ratio in the core compared to a year ago. Despite the perception, there’s less difference between the condo and detached housing markets than expected, with months of inventory essentially the same for both.
Overall sales were mixed in February, with slight declines on a seasonally adjusted basis but still within the margin for noise. New listings remained healthy, although the increase from last February is mainly due to a low base effect. However, this increase has reversed the decline in inventory levels seen earlier in the year, which is good news for buyers. While inventory levels have returned to roughly average levels, they’re still lower than a decade ago, indicating a durable buyers’ market requires substantially more inventory.
The measures of market balance were mixed, with the sales-to-new-list ratio cooling off, while seasonally adjusted months of inventory remained roughly unchanged from January. Prices have been relatively unchanged from 4-6 months ago, with detached values showing some strength compared to last year.
In summary, February was mostly status quo, and I don’t anticipate significant changes in sales numbers until there’s movement in interest rates. The wildcard remains new listings, which are crucial for increasing choices for buyers into the spring market.
Reach out to me if you have questions about your local market! (250) 618-2820 or matthew@thetraynorgroup.ca
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