Market Analysis for May, 2019
The spring market is proceeding strongly, with a very healthy sales-to-listings ratio of 57%, indicating a seller’s market.
As of the time of writing, sales are up by 5% compared to this time in 2018 (from 2,682 to 2,810). However, new listings are down by 4% over the same period, (from 5,131 to 4,924).
At the same time, mortgage interest rates have been reduced again. I say “again” because rates have dropped steadily since the beginning of the year. In January the lowest 5-year fixed rate was 3.44%. In February, it dropped to 3.29%, in March to 3.14%, and the lowest 5-year rate is now 2.84%.
This mix of low interest rates, along with strong demand (the seller’s market) will encourage further price increases.
Since the end of last year, prices have already risen by an average of 2.7% as of the time of writing. Specifically, apartments have increased from an average of $365,400 to $390,400; condominium townhomes from $472,000 to $481,500; freehold townhomes from $603,000 to $623,000; and semi-detached homes have increased from an average of $635,300 to $657,700.
Detached homes, which had dropped from an average $815,200 at the start of the year to $811,500 in March have now rebounded to $819,000.
At this point, most people understand that house prices have increased at a rate far higher than inflation, making an adjustment inevitable. The question is how far the increases will go before that happens, and what the nature of the adjustment will be. The answer remains anyone’s guess at this point.
Want to know more about the state of the market? Just ask me, I'll be happy to help.