Real Estate Market Update - June Edition

Home Sales Decline in September, Market Moves Towards Balanced Conditions – September 2022 Market Update

Last Updated on November 22, 2022

Home Sales Decline in September, Market Moves Towards Balanced Conditions

518 residential homes were sold last month through the Multiple Listing Service® (MLS®) System of the Waterloo Region Association of REALTORS® (WRAR), a decrease of 25.3 per cent compared to September 2021 and 30.8 per cent below the previous 5-year average for the month.
“Home sales continued to decline in the wake of yet another interest rate hike by the Bank of Canada last month,” says Megan Bell, president of WRAR. “The property type that saw the biggest decline in sales was the townhouse segment followed closely by condos, which could indicate there are fewer entry-level buyers in the market due to the higher borrowing costs.”
In September, the average sale price for all residential properties in Waterloo Region was $752,421. This represents a 4.7 per cent decrease compared to September 2021 and a 0.1 per cent increase compared to August 2022.
  • The average price of a detached home was $862,435. This represents a 7.4 per cent decrease from September 2021 and an increase of 1.3 per cent compared to August 2022.
  • The average sale price for a townhouse was $638,284. This represents a 2.7 per cent decrease from September 2021 and an increase of 4.4 per cent compared to August 2022.
  • The average sale price for an apartment-style condominium was $455,262. This represents a decrease of 8.5 per cent from September 2021 and a decrease of 2.3 per cent compared to August 2022.
  • The average sale price for a semi was $637,205. This represents a decrease of 6.5 per cent compared to September 2021 and a decrease of 2.8 per cent compared to August 2022.

National Highlights

  • National home sales were down 3.9% on a month-over-month basis in September.
  • Actual (not seasonally adjusted) monthly activity came in 32.2% below September 2021.
  • The number of newly listed properties edged down 0.8% month-over-month.
  • The MLS® Home Price Index (HPI) declined by 1.4% month-over-month but was still up 3.3% year-over-year.
  • The actual (not seasonally adjusted) national average sale price posted a 6.6% year-over-year decline in September.

New Home Listings in September 2022

The number of newly listed homes edged back a further 0.8% on a month-over-month basis in September. This built on the 6.1% and 4.9% declines recorded in July and August, respectively, as some sellers appear content to stay on the sidelines until more buyers are ready to get back into the market. It was an even split between markets where new supply was down in September and those where it increased, with the biggest declines in the GTA offsetting the largest gains in British Columbia’s Lower Mainland.

With sales down and new listings seeing minor change in September, the sales-to-new listings ratio eased to 52% compared to 53.6% in August. The September 2022 reading for the national sales-to-new listings ratio was back on par with those in June and July, and only a little below its long-term average of 55.1%.

There were 3.7 months of inventory on a national basis at the end of September 2022, up slightly from 3.5 months at the end of August. While the number of months of inventory still well below the long-term average of about five months, it’s also up quite a bit from the all-time low of 1.7 months set at the beginning of 2022.

The Aggregate Composite MLS® HPI edged down 1.4% on a month-over-month basis in September 2022, not a small decline historically, but smaller than in June, July and August.

 

What’s Ahead for the Real Estate Market?

“September was another month of lower sales activity, although, with many sellers also opting to play the waiting game, the market remains on the tighter side of balanced market territory,” said Jill Oudil, Chair of CREA. “It makes for an interesting dynamic, one that doesn’t really have many historical precedents. The market has changed so much in the last year, and the adjustment to higher borrowing costs is still underway. As always, for information and guidance about how to navigate the current marketplace, your best bet is to contact your local REALTOR®,” continued Oudil.

We hope you enjoyed our update for this month, and be sure to follow us on Facebook, LinkedIn, and Twitter for more information and updates.

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