Durham Region Monthly Market Report - November 2022
Last update December 6, 2022 at 10:30am
The real estate market in Durham Region is in its final few weeks of the fall season with a market dynamic that is now more buyer-friendly than it was last winter.
With low inventory and high demand, prices normally would be increasing, but the interest rate and inflation situation have clearly cut into buyer budgets, allowing prices to stay in check.
There has been an easing of key metrics that measure the intensity of the market. Interest rates are higher, sales volume is lower, active listings are up, and multiple offer situations are down along with average sale prices.
Supply is low to moderate, with 2.0 months of inventory (MOI) for the entire region (and only 1.2 MOI per TRREB's trend figures), and much higher levels in northern Durham communities. (This means that at the current pace of sales, with no new listings, all inventory would be sold within this time frame).
Historically, we haven't seen a true buyer's market across Durham Region since 2008, as shown in the chart above. In December of that year, months of inventory spiked to 9.
In November, transactions reported had selling prices averaging 892,677 in Durham Region, with the average property selling at 100% of list price (SP/LP). This is a 0.1% decrease from last month and a 10.6% decrease from last year.
Here is a look at average detached home selling prices each day over the past 3 months:
The above chart shows average detached home prices by major region in the GTA in November 2022.
The average selling price of detached homes is just under 980,000 overall, as summarized in the above map.
Townhouse sale prices are now averaging just under 800,000 across the region.
Durham Region Real Estate Market Reports by City
If you look at the top chart's selling price to list price ratios, some communities in south Durham still show sales at levels above list price. The following chart shows the trend - another key indicator of why the market had been so hot, and illustrates how things are softening this year.
Of particular note is how the sale price to list price ratio has dropped at a much sharper rate than selling prices. This is due to two factors. First, more listings are being pulled off the market after not getting the results they wanted on the offer date published (with a lower than market list price), then re-listed at a (more realistic) higher price with no offer date. Second, more listings are being posted with no offer date at all, and a list price that is more in line with recent comparable sales.
More recently, SPLP has averaged near the 100% mark, indicating that the average property is selling for close to its list price. This shows that a common scenario is for there to be more than one offer on properties, signalling that bidding situations are working back into the mix - just not with the same intensity as last year.
Days on market (DOM) averaged 17.5 days. DOM is the number of days it takes for a property to be sold firm, or without conditions.
Should new listings rise at a pace that is faster than current sales, then there would be more inventory for the pool of buyers to choose from, which will have the effect of reducing the sale price to list price ratio, then months of inventory stat, which leans the market closer to a balanced market.
Active listings had jumped sharply in the summer months, providing more options for buyers. They have since eased back from those levels.
It also makes all the steps taken to compete among selling properties more important. When listings were scarce, buyers were compelled to reduce expectations on location, property condition, etc. Those properties that have issues should now see challenges in attracting strong offers and competition.
The pace of sales was at 19.1 units per day - down 9.3% from last month and down 43.2% from the same period the previous year. Given that the average property sold at close to the list price, the slower pace of sales versus 2021 isn't solely due to decreased buyer demand. There is still a serious shortage of supply, although that factor has fluctuated as the year progresses.
Buyers will continue to find multiple offers in some situations and price ranges, particularly at lower price points. They are highly advised to get prepared - have their mortgage preapproval ready before looking at homes, and be prepared to view homes via photos and virtual tours as soon as they reach the market. With interest rates rising, locking in a rate is more important than ever. Speak with your agent to discuss the process to move forward.
For those of you considering selling (or buying), brand makes a big difference. When marketing a property, the size of the company and its network combined with the productivity of its agents can make a huge difference in the outcome. The following chart shows listing sales by major brands over the last 3 months:
Here is a look at the market share for buyer agents, (also referred to as selling or co-operating).
Sellers should be considering getting on the market now or soon, and working with their agent to set their home apart from competitive listings while reaching the widest possible audience.
If you are interested in seeing values for an area not shown or are interested in other figures, please comment below or contact me. As always, give me a call anytime if you would like to discuss this further without any obligation.
About the Author
John Owen is an award-winning broker with RE/MAX Impact Realty in Courtice, ON.
Office - 905-240-6777