Market Snapshot – December 2023

It’s the last month of 2023 and yet it’s a similar snapshot of the market from the previous month of November. Sales, inventory and prices were all slowing down as consumers seemingly put a pin in their home ownership goals.

December ended up being a month of slower housing market activity, but likely the shopping online and in stores for holiday gifts and goodies was picking up.  The price of a Single Family Detached home dropped from $864,949 to $808,780, that’s a 6.5% drop month over month. For Freehold towns and Semis, the price dropped 3.75% to $632,568 and condos had better news with an increase in average sales price by 9% to $603,282.

What’s interesting to note is that there was a new record low of inventory, but as we know with demand, that hasn’t seemed to let up any.

One would consider this now a Buyer’s Market based on the Annual Sales to New Listings Ratio in Waterloo Region which was 57.7, and a ratio below 60 would qualify it as a Buyer’s Market, where as anything between 60 and 80 is a balanced market and anything above 80 would be considered a Seller’s market.  You can see the pendulum has swung significantly since the pandemic when we saw an acute Seller’s market caused by low interest rates, strong demand and low inventory.

Now, interest rates are the highest in 5 years at 5%, but thankfully the Bank of Canada announced no change to rate at their last announcement in December.  This also came with another update that inflation has dropped to 3.1% which is essentially right in line with their revised target of 3% at year’s end.

A Look At 2023 Overall

Looking at the year as a whole across all property types compared to 2022 there were some significant changes to note, but much like what we saw from November to December in 2023, the stary year over year isn’t that different.

The last few years we have been fortunate to see an increase in average sale price, but not this year. In fact, this year, there was a 5.8% drop from over $800,000 to just under at $775,000 (rounding up).  This is due to the lack of inventory, higher interest rates and uncertain Buyer confidence.  The demand is there as our population in Ontario is increasing.

In Q3 2023 there was a 36% increase in population compared to Q3 2022, with a total of 191,418 people immigrating internationally.  That’s a considerable jump in our population which will only cause more pressure in the housing market, particularly the homes that are accessible and desirable to the majority of families, which many coin as the “missing middle”.

Thankfully our local governments here in the region are responding to our (Realtors and other advocates) request to help ease the red tape on developing more of the missing middle.

Recently, the City of Kitchener and the City of Water brought forward motions to champion more missing middle housing by asking staff to create a multiplex zoning bylaw for low density areas.

Once developed and active this will allow builders and developers to build a semi instead of a detached single family home, or perhaps a four plex instead of a duplex with out having to go through the rezoning process.

2023 was a year of discomfort for many, whether you were pinching pennies due to the increased cost of living, or maybe even pinching to save a little more for a down payment since the rise in interest rates had you re-evaluating your home purchase budget.  I had Sellers press pause on listings as they re-evaluated their current situation, and Buyer’s step back to either change the course and buy something more affordable or wait and save more so they could come back strong for 2024.  Whatever your situation was in 2023, I have good news that 2024 is looking like there will be brighter days ahead.

Keep your eye out for my next blog post were I will be making a few predictions of my own on what to expect in the housing market here in Waterloo Region in 2024.  In the meantime, keep tracking with me on social media, whether it’s Facebook or Instagram, I’m always posting about what’s happening in the market but also what’s happening in my life as Mom, Wife, Realtor and President of the Waterloo Region Association of Realtors.