Here in Waterloo Region the tepid housing market we saw in July continued into August as I’d predicted in my post last month. The summer season is typically slower so this was an easy guess for me. The effects of a 5% overnight rate are definitely becoming apparent as well. Overall sales volume is down 16% year over year (YOY) with the biggest slowdown being detached homes, down 25% compared to last August.
This slowdown has been accompanied with an uptick in inventory and days on market. We are approaching balanced market territory at just under 3 months unsold inventory. Listings are taking roughly 19 days to sell, slightly longer than in July.
Prices are holding up surprisingly well although they are lower than the figures we saw nearer the end of this spring. YOY, they are up compared to last August in every segment. The biggest gains were in seen in townhomes, up 8%.
The Canadian economy apparently contracted in the 2nd quarter with July and August sluggish as well. The Bank of Canada has paused rate increases and we are remaining at 5%.
While the fall months tend to be busy I think the slowdown we’ve seen will continue. Affordability is still a big issue and many buyers have been forced to the sidelines to wait things out.
