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Cheers to a New Year and a Fresh Start

Jan. 13, 23 | Market Updates

The great thing about time, is that when you look back you have this unique advantage of being able to see the things you were present for but now with this glorious ability to reflect with a new perspective, all while still being able to recall what it was like being in that moment.  So, when I look back at 2022, I have this new perspective that is entirely different than the one I would have shared with you had I been asked in that moment what my thoughts were.

You see, we entered 2022 with vivid memories from the previous year that had a profound impact on us all, and whether you realize it or not, how you spent your time, money, and talents this past year was directly influenced by what came the prior year.  

We started 2022 still feeling deeply overwhelmed by the pandemic, and with a new Omicron variant on the scene.  There was a partial lockdown at the time that lasted until mid February and by March 21st the mask mandate was lifted and by the end of April all directives were dropped.

Also, last March began the first of several Bank of Canada rate hikes which were the result of an increasing inflation rate which became note worthy in late 2021 when it was in the 4% range, but by June 2022 the inflation rate nearly doubled topping out at 8.13%.  These rate hikes had a profound impact on the housing market, and as restrictions were a thing of the past, people seized every opportunity to connect with old family and friends and go places, they had been lusting about over the last two years, it was finally time.  So, as people got busy being busy, the housing market that started out strong fizzled as the year went by. 

In January 2022, the average sale price for a single detached home was just over one million dollars, or to be precise $1,094,707.  By the end of the year the average dropped nearly 28% to the high 700,000s.

All data from ITSO, InfoSparks © 2023 ShowingTim

In January 2022, the average sale price for a single detached home was just over one million dollars, or to be precise $1,094,707.  I heard a client share a sweet statement when he said “I never thought I would be living in a million-dollar home” because at the time prices were beyond every economist’s expectation and he was living in a modest and average home.

If you were selling your home during the first two months of the year, you were one of the last to benefit from the outrageous high in the housing market. But, as the interest rates started to be announced and one after another getting a little bleaker and dimmer, Buyer’s eagerness waned, and Sellers were no longer seeing those high-priced offers.  In fact, not only were sellers not seeing those high prices they began to see the comeback of conditions in offers.  With less competition in the market, buyers began including financing and home inspection conditions, in part because they could, but more importantly because it was prudent to do so with a market in such flux.

By the end of 2022, the same house that would have sold in less than a week for over a million dollars in Cambridge was now likely to sell roughly 28% less, closer to the high 700s and would take almost a month to do so. Usually, you ring in the new year with a bang, but for the housing market things seemed dismal. But, before you become all Debbie-downer on me, let me offer you some good news. Consistently, year over year for the last five years, house prices have continued to appreciate, i.e. go up in value. So, despite a dismal end to 2022, when we have the perspective of time to factor into our understanding, we now can see a brighter future. 

House prices increased 6% in Cambridge which is a strong and healthy appreciation percentage.

All data from ITSO, InfoSparks © 2023 ShowingTime

As we look to 2023, having a clean slate, all we can do it predict what the year ahead holds and believe how you feel about that prediction will greatly influence how you see the year playing out.

So, if you’re like me, and like to see the glass as being half full, rather then half empty, let’s going 2023, thinking that it will be even better than the last year.

There’s no better time then the present to take the first leap of faith into a new year, and one step closer to your dream. If you’re dreaming about buying or selling real estate and you’re wanting to talk more, let’s get together over coffee. I would be so happy to have a coffee and even more excited to chat with you all about it what I love and how I can help you.