Market Snapshot – October 2022

October shaped up to be an extraordinary month because the looming news of the Bank of Canada’s decision to address the over night rate escalated Buyer’s motivation and timeline to purchase before they could be impacted yet again.  On Oct 26^th the BoC, did announce a .75 rate increase to the overnight rate, bringing interest rates to 3.75 per cent for the first time since 2008.  If you recall what happened in 2008, we saw a massive hit to our real estate market as the dominos fell from south of the border only for our housing market to also be impacted.  That recession took nearly 6 years to bounce back from and then the pendulum shifted to a new extreme that we saw at the height in 2016-2017.  Just when we thought that housing prices couldn’t go any higher than the average year over year growth, COVID hit the scene which initially raised caution and concern for our industry.

However, within a few months, the market responded positively, thanks in part to the all time low interest rates and additional funding from our feds, allowing Buyers more equity and capital to invest in their current houses or leverage the opportunity and sell and reinvest in something that seemed unattainable any other time.  Fast forward to June or July of this year, and we saw a dramatic halt due to the Bank of Canada’s interaction into the ever-high inflation.  Seeing that it was quickly escalating and needing immediate attention, the government intervened and promised to tackle the surmounting problem and set a goal of hitting 2% by 2024.

Since government intervention, consumers are beginning to feel and adjust their spending accordingly. This has impacted the housing market, however, in our region we have still a healthy market with plenty of Buyers and an average stock of inventory.  Typically, we would see around 200 single family detached homes on the market, but in October this year we had 161 which means we are slightly below inventory, but not nearly as below as we were in October of 2021, which only had 57 homes listed.  Furthermore, in the month of October there were reported 82 sales, which is one of the lowest month of the year, second to January which had 64 sales.  The average for the month of October should be somewhere between 100-150 in our market.

If we look at single family detached homes for Cambridge, we are noticing that it is taking longer then what we have been used to in order to sell a home.  The average Seller should anticipate 4 weeks on the market right now which is also inline with a typical healthy market.  The sale price also continues to drop from a staggering high, but as we have been seeing over the last few months that decrease is marginal and some semblance of consistency seems to be on the horizon. In January the average single family detached home sold for almost 1.1 Million dollars, however, this past month that same Seller should anticipate a lower number as the average sale price has dropped 32% to $748,005.

In summary, the City of Cambridge, is still considered a healthy market irrespective of what the media or some may perceive.  Consumers need to isolate what happened in our housing market during COVID, because as we look back to 2019 or 2018, the statistics for 2022 are more inline to those numbers.

If you’re interested in learning more about what’s happening in the housing market in Waterloo Region, contact me today. I would be happy to sit and have a coffee and chat about how I can help you.