The August Numbers & The Tea Leaves - Issue 377

The August numbers are hot off the press and we’ve got a few twists and turns that you probably didn’t anticipate.

The good news story this week is that interest rates didn’t increase. The bank of Canada must now feel that it’s pushed the economy down enough and that inflation has been contained enough at this point.

It’s still a negative story in the short term and the news cycle has shifted their focus from inflation to the provincial government shooting itself in the foot over the greenbelt and trying to blame it on anything and anyone but them.

But that’s a story for another time.

Here’s the story of the August numbers:

Sales, listings, price per square foot, and median sales price are all down compared to the previous month and, in most cases, below the same month a year ago. This story is playing out regionally and for the most part nationally as well. The underlying story is that while most of this slowdown can be attributed to higher interest rates, August is also one of the slower months of the year as consumers are preoccupied with enjoying the last bit of summer and preparing the kids to go back to school.

While it doesn’t feel like it, most of the market in Guelph and the surrounding regions is hovering between a balanced market and a slight seller’s market. Demand for the most part has remained robust. The difference is that not all segments of the market are performing equally.

Interestingly, detached homes are underperforming the condo and semi market short term and noticeably when compared to the 5 year average.

Detached homes represent the bulk of the market, and over the past 5 years the median sales price has increased by 57% to $860,000 with sales down 47.2% from 5 years ago! Many of those buyers have moved over to the townhouse/semi and condo apartment markets, where prices over the past 5 years have increased by 88.6% and 67.6% respectively.

No doubt affordability issues and an insurgence of entry level buyers have buoyed the entry end of the market.

So where do we go from here?

The local and regional market will continue to bump along at a simmer while consumers re-evaluate their budgets and needs. In my opinion, this is the type of market where opportunities will start to show up.

What’s going to be critical is that as a consumer you work with an agent that is prepared to shift through and dig out the opportunities for you. There will be plenty of opportunities for those that are patient and prepared. Looking for your opportunity? Book a discovery call with us today.

As always, thanks for reading and following along on our journey.

Don’t forget to check out the full August market report below.

Enjoy the weekend.
Paul

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