What About the Market?
January’s market data shows more of the same that we’ve seen in the last 6 months. Declining sales volume, declining prices, increasing inventory, increasing days on market… The correction continues but is levelling off. There is more to the story than the headline numbers which will be repeated in the media however.
The biggest thing that people don’t realize is how much the condo (including townhomes and apartments) market is driving these swings. Condos and townhomes got really hot a couple years ago when people could no longer afford houses. The market overreacted and oversupplied those products and they’ve come crashing down just as fast as they went up. Meanwhile, detached homes have stayed pretty steady while the price gap between them widens. Moreover, price swings are less dramatic when you leave out certain areas…. the oversupplied NE in particular, saw a much more dramatic run up in prices and an equally dramatic correction back down. Minus the NE, the price line graph is much smoother. You’re still up if you bought before 2023. Condo owners who bought in 2024 at or near the peak have taken a punch in the jaw with brass knuckles. Detached owners who bought during that period have merely taken a velvet gloved slap.
The average DOM (Days on Market) is at 53 days, but that doesn’t mean it’s going to take 53 days to sell your house. Some are taking 90+ days and some are selling in 10. That’s the thing about averages… Buyers are picky right now. Homes that are priced to sell and in great condition will still sell immediately. While homes will sit for months if they’re priced optimistically or they don’t show well, or both.
The reporting of averages misleads when it comes to sales volume too. Overall sales volume is down 15% but for detached it’s just 2%, and the other types are 25-26%
This applies to supply as well. Overall there is 3.56 months of supply. But for detached homes it’s just 2.67, and for apartment it’s 5.26.
For the sake of simplicity: detached homes have corrected to early 2024 prices. Apartment and row homes have corrected to mid 2023 prices. Supply is roughly the same as this time in 2021.
Full report here.
I made this reel to summarize.
