So here we are approaching fall.  After soaring prices in the spring, the market has definitely cooled off in terms of prices, as well as the motivation of buyers.  Panic buying was evident in the spring, with the lowest inventory I’ve seen in my 18 years of real estate.  The pandemic, and the lockdowns sent the real estate market into turmoil.  This is due to many factors.  Low inventory and low interest rates was one major factor.  Another one, is that when we all went into lockdown, boarders closed, no vacation or travel, no hosting parties or weddings, no commuting to work and spending money on gas, no going to sports events or concerts, and no going to bars and restaurants.  This saw a lot of Canadians savings and disposable income increase substantially.  We had this extra money to spend, and nowhere to go, and working from home remotely, the demand for people moving out of the city to smaller towns with more room, acreage etc skyrocketed.  The Condo market in the GTA didn’t do so well during the pandemic.  Also, if homeowners didn’t decide to move, they spent that money on home renovations and new vehicles, new kitchens, bathrooms, pools, appliances, home electronics, etc.  With the limited capacity for workers in manufacturing plants, new regulations for trucks crossing the boarders, the supply chain issue had just begun.  Supply and demand is always a driving force in prices skyrocketing.  We saw this in real estate, and almost every other sector in the economy. 

Now we have record high inflation in 2022, and what can the government do to curb this high inflation…raise interest rates of course.  Something had to be done, as the increase in housing prices was unsustainable.  After this crazy spring, the real estate market cooled off big time, and prices started to fall.  Or should I say…not fall, but the upswing of close to 37% rise in prices over a couple months, came back down to a reasonable level.  The media is reporting a 20-25% drop in prices today, but that may be in comparison to the first couple months of the year when it did go up over 30%.  You can make statistics sound any way you’d like.  And headlines sell newspapers.  Also, the inventory increased back to a healthy level, and buyers now have a sense of uncertainty with the rising interest rates, and if prices will continue to fall.  This is what’s happening.  Rising interest rates will limit a buyers purchasing power of what they can afford today, compared to what they could afford a year ago.  We’re seeing this inversion now. 

But, it’s not all doom and gloom.  More inventory is a good thing.  If we look month versus month, the number active listings available in orangeville this august was up 309% compared to august of 2021.  The number of new homes listed is up 10%.  The number of sales however is down 21%.  Average days on market has doubled, and the average sale price has remained pretty much the same around $830,000 here in Orangeville. 

Now if we look at year to date January to August in 2021 and 2022, here in Orangeville, prices are up 20%.  Now the crazy prices in the spring contributed to this.  Sales are however down 29% year to date.  We saw the months of july and august with lower sales…but it’s the first summer with no real restrictions, so everyone was out enjoying themselves and taking advantage of those holidays we were not allowed to do in two years.  The summer is typically slower in years before the pandemic, and I’m noticing more and more showings on listings, sales are picking up, so I think that we’re heading back into a normal market cycle.  Fall will be active with buyers wanting to close before Christmas, Christmas holidays will slow down, and the spring market will be active again with people wanting to close at the end of the school year. 

Now the main thing for Seller, is pricing your house correctly and not comparing it to the springtime prices.  Buyers will not overpay in the current market.  Secondly, you have to make your house shine over and above other comparable listings.  It’s a beauty pageant out there now.  Gone are the times when a listing only required a for sale sign and it would sell overnight.  Good photos, perhaps staging, good marketing, and a clean tidy home are the homes that will sell right now with a reasonable price. 

We’ll all have to see what happens this fall, as another interest rate hike is on the horizon I’m sure.  The US is going to do it, and I’m sure Canada will follow suit.