The slow real estate market we’ve seen earlier in the year continued into June, with the 672 sales across the region hitting a record low relative to the 10 year average for the month.
The usual ramp up in prices seen in a typical spring real estate market has been absent and valuations have remained mostly flat heading into June. By month’s end we saw significant decreases in price on a MOM and YOY basis in the detached and semi detached segments. Towns and apt condos were less impacted but were still down 2% YOY.
While inventories were up sharply, at 1860 listings last month, (see listings here) detached and semis are still solidly in seller territory, with the townhouse market barely moving into neutral status. The biggest change was to apartment condos, now with almost 7 months of inventory.
That big jump in condo inventories is perhaps indicative of how big a factor speculation is in our marketplace. We are seeing a glut because costs have risen faster than rents have, which sounds incredible in the face of things. Nevertheless, for investors, the numbers simply don’t work anymore.
Sold to list ratios, another key indicator, are also down sharply. The ratio for the Region is sitting at 101%, down 6% compared to the same period last year. Not surprisingly days on market (DOM) is up by 3 days, now sitting at 18. When I started in the business DOM was over 30.
Going forward I believe we are going to see a quieter than normal summer. It’s entirely possible that the economy is in recession. The Bank of Canada rate cut wasn’t for nothing although it appears to have had no effect at all on our housing market. Anecdotally a couple of friends who own businesses have said that this year has been slow.
With substantial rent increases over the past few years, high mortgage servicing costs and expensive real estate is it any surprise that people are feeling a little strapped? The current inflation rate of roughly 3% is a bit misleading if housing costs are fully accounted for. These factors are absolutely bleeding into our real estate market. I expect we may see a slow fall as well. Time will tell. Read my board’s full press release here.
