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An Erratic Market
Posted April 18th, 2023 under market updates.
As of this writing, the number of new listings this year in Brampton is the lowest in almost twenty-five years, with only around 2,300 listings so far. The number of homes sold is also at a fifteen-year low, with only about 1,500 homes sold so far.
The sales-to-listings ratio has been around seventy percent. Under normal circumstances, this would indicate a very strong seller’s market. However, the market has not behaved normally this year. To understand why, we need to look back to 2022.
In January and February of 2022, there was a huge price spike of over 30%. This was followed by a steady decline for the remainder of the year. The decline was a normal market reaction to a spike, and I would have expected the decline to continue in 2023 as well.
Instead, we’ve entered a period of erratic price fluctuations. One week prices rise, the next they come back down. These shifts are only a few thousand dollars back and forth, but they’ve created uncertainty in the market.
Despite all of this, prices remain higher today than in December 2021, with the exception of detached homes. In my opinion, when detached prices broke the $1.5M mark, they crossed a psychological line and buyers became scared. As buyers backed away from the highest-priced homes, we saw greater price drops for detached and semis than others.
| Dec 2021 | Feb 2022 | Apr 2023 | |
|---|---|---|---|
| Apartment | $515,600 | $670,600 | $559,700 |
| Townhouse | $691,200 | $895,300 | $710,400 |
| Semi-Detached | $931,200 | $1,249,800 | $945,600 |
| Detached | $1,239,800 | $1,628,600 | $1,230,600 |
What’s next? For some time, I have been expecting a price adjustment for all home types. However, the current shortage of listings is likely preventing an adjustment for the time being. Based on the market’s performance over the last year, my advice is caution, caution, caution to first-time buyers and those looking to move up to a larger property.
Want to know more about the state of the market? Just ask me, I'll be happy to help.
