Hello all! I Hope everyone is enjoying their summer so far. Myself, it’s been a busy couple of weeks, having taken the first week of July off to spend with the kids. But, reality has set back in, and it’s back to work!
After getting caught up on things from a week away, it was time to look at the market stats for June, and wrap up Q2 of 2022. Once I reviewed the data, some interesting things came out of it, including some insights to dispel all the doom and gloom we are hearing in the media.
Now, a few people have commented that my stats don’t line up with what is being published by the Sudbury Real Estate Board, and then shared by many of my colleagues… It is important to note that the statistics I am using are from reports I have pulled, and are limited to the City of Greater Sudbury proper. The SREB stats are for the entire real estate board, and included many outlying area of CGS, including Manitoulin Island and Espanola, as well as any property in Ontario that was listed by a member of the SREB through our MLS system. As I am only concerned with what is happening in Greater Sudbury, I am only looking at the date set from CGS.
Now that we’ve gotten that out of the way…
June, much like the previous 5 months of 2022 saw the market continue to transition. New listings continued to be higher than active inventory levels, with the former hitting a high for the year of 356 new listings for the month of June, whereas we finished the month with 302 active listing on our MLS system. Number of sales actually dipped a little, dropping to 234 for June, or a reduction of 24 from May’s high of 258. Average price also dipped a little to $489,322, but still in line with the monthly numbers we have seen so far in 2022.
What is surprising about where we have ended up at the end of Q2, is that active inventory levels have more than doubled from where they were at when Q1 ended! At the end of March, we were sitting at 135 active listings. With the number at the end of June being 302, that’s an increase of 124%!!!
Now, a lot of what we are hearing in the media is about a slowdown in the market, and prices dropping. You may have heard many of your friends sharing the idea of a market crash, and significant decrease in prices. Although we have seen the value of homes dip a little, it is mostly anecdotal, and not supported by the numbers… In fact, the average price for June 2022 was a little more than 70k higher than the average price from June 2021, which was $417,292. So, even if there is the appearance of prices dropping, average price continues to be higher in 2022 than anything we have seen before.
So I ask - Are the fears of price drop based on fact, or is it all driven by hype?
My feeling is it’s mostly hype. Houses continue to sell in a down market, just not at the pace we have been used to the last 30 months or so. Although interest rates are affecting buyer attitudes, and certainly causing some people to reevaluate their plans, the biggest factor causing this feeling of a slowdown is the increase in inventory! Yes, number of sales is down, but that drop is in most cases marginal when comparing to the same month in 2021. Although statistically relevant, it is far from statistically significant…
I do believe there is a disconnect between the data and what we are seeing in the market. Until the data can show what is actually happening, I’m going to reserve judgement on the state of the market. For now, I believe it’s simply an increase in demand, coupled with the hype surrounding the interest rates that are driving buyer decisions at the moment. And we know that it is buyers that drive the market…
Advice for buyers
In this type of market, it’s important to weigh your decisions against what your short, medium and long term goals are! If your plan is to only live in Sudbury for the next 2 or 3 years, then buying a home may not be the right choice. With the uncertainty of how things are going to unfold in the short term, maybe renting is the safer option. That being said, if your plan is to live in the home for years to come, the fear of an overpayment today should prices drop slightly should be moot. Any overpayment today will be eclipsed by the gains of tomorrow. Markets are cyclical, and property values only go up overtime.
As a buyer with long term goals, I’d be more concerned about whether or not the house suits my need, and that I can afford it, than getting wrapped up in getting a good deal. Keep your eyes on the prize, and what the ultimate goal is - buying a home, and getting into the market to build up that equity over the long term. The worst thing you can do as a buyer is try to time the market. As things slow, this is an opportunity to view more listings, and to act more deliberately in purchasing a home, as opposed to acting on emotion and having to jump on any house that suits your need before it’s gone!
Advice for sellers
Are you selling or trying? Right now, most sellers are acting like they are trying, and very few are actually selling. Sellers are realistic with the state of the market, and the effect that has had on prices. Triers are testing the market, looking for a sucker to pay their inflated price. Unfortunately for them, the agents who do the vast majority of the business in Greater Sudbury are very savvy, and are advising their clients on a bad buy or an overpay. We are steering our clients towards the better buys, and the better deals.
It’s time for these sellers to come back down to reality, and make a decision on whether or not they want to sell. If you are serious about selling, look at where you fit in with the active inventory in your neighbourhood. Far too often sellers get wrapped up in the past sales, and fail to look at their competition. How your house stacks up to the completion, and how you are priced by comparison will greatly affect the traffic through the door, and ultimately the price you’re going to sell for.
Don’t panic if you house is sitting after a few weeks. Days on market is going to continue to climb as inventory levels continue to go up. If priced correctly, your house will sell, it just may take a little more time than you were hoping. Ensure proper pricing, and proper placement in the marketplace.
This is where a top agent with a comprehensive marketing plan can make a difference, so do your due diligence, and don’t necessarily go with your friend's agent who did well during 2020 and 2021. Anyone with a sign and an internet connection could sell a house in those days! Things are going to be a little more difficult selling for the foreseeable future, and it’s important to have someone with an actual plan to sell, and not just an empty shirt.
That’s all for now! Thanks for reading! Keep an eye out for my next blog post, where I will delve into July’s numbers, and provide an update on my Q3 predictions! Teaser - they appear to be coming true!
Until next time!