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Have we seen the peak of the housing market
Dated: August 11 2021
Most experts say that the scorching pace of Canada’s housing market has indeed peaked. Are we looking into a rapid downhill from here?
Sales are still “blisteringly strong1 ” writes Rishi Sondhi, Economist. We are starting to see an unwinding in certain aspects of the market but considering the enormous spike we have experienced in the first quarter; it is not a rapid tumble as some sellers and buyers are anticipating.
Normalizing would be a good word to describe how the market is behaving today. As we can see in the chart below, although the average home price is still up, we are starting to see a slip in bidding wars and the sale price compared to the listing price.
Also, the average days on market that was at a spectacular low during the months of February to May (6–7 days) is now levelling at 13.
On the inventory side, forecast anticipates a pickup in new listings in the upcoming third quarter. Right now, there remains a shortage of supply, but the level of competition among buyers is not the same as we were seeing a few months ago.
Although this holds true at the macro level, it is a different story at the micro level as inventory differs from neighbourhood to neighbourhood. Some are seeing signs of buyer fatigue; others are still blistering hot.
To sum everything up, while the whirlwind of earlier in the year seems to have calmed, the key ingredients of a seller’s market are all still in place in most neighbourhoods.
1https://economics.td.com/ca-housing-update. Consulted on July 29, 2021.
This article is for informational and educational purposes only. It is based on data gathered on August 9, 2021 from sources that were deemed to be believable and reliable. Data is not guaranteed to be accurate or complete. The views and opinions expressed may change at any time based on the market or other conditions. The Real Estate HUB is not liable for any errors or omissions in the information, analysis or views contained in this article.