Durham Region Real Estate Daily Market Update
Last updated Dec 4, 2023, at 2:40 p.m.
Early December stats are very preliminary!
The real estate market in Durham Region has opened December with conditions that still favour sellers in some price points and locations, even though there are signs that the market has relaxed. Inventory levels are coming down from a recent high point for the past year, and multiple offer situations are receding.
Sales volume has eased off gradually each month since the spring high. Metrics show things improving for buyers, though increasing sales volume may put things back firmly in seller territory.
The October 25th announcement from the Bank of Canada to hold the overnight bank rate was encouraging news, especially for variable mortgage holders. Still, pre-approval (and rate lock) are essential steps for buyers who haven’t purchased yet.
Multiple offer situations are still commonplace in low to mid-price ranges, as buyers scramble to compete for homes within their budgets.
There looks to be an opportunity for buyers at mid-to-high price ranges right now, as many buyers are sitting on the sidelines in these niches. Once market sentiment starts to show confidence, via interest rate drops or on the inflationary front, expect there to be a sharp uptick in buyer activity and competition - especially in Durham Region. This will have the effect of driving prices higher on the average and luxury segments of the market.
There is a growing consensus among my peers in the real estate and financial areas that this is expected to be sooner rather than later, perhaps before the spring market, given the political pressure for aggressive government action on these issues. Another rate announcement is set for December 6.
The federal government announced some easing of the mortgage stress test rules on November 21. Now, mortgage holders won’t be required to qualify at the insured minimum qualifying rate when switching lenders (when their mortgage is up for renewal). There are some other items in the announcement too.
Supply is moderate to high, with 6.5 months of inventory (MOI) for the entire region, with higher levels in north Durham communities. (This means that at the current pace of sales, with no new listings, all inventory would be sold within this time frame).
Durham Region Real Estate Market December 2023
In December, transactions reported thus far had selling prices averaging 775,740 in Durham Region, with the average property selling at 96.9% of list price (SP/LP). This is a 13.4% decrease from last month and a 10.3% decrease from last year.
Here is a look at average detached home selling prices each day over the past 3 months: Prices climbed at a healthy pace over the first several months of the year, then turned lower over the summer. They have been relatively stable since August before dropping in late November.
The average selling price of detached homes is just under 860,000, as summarized in the following map.
If you look at the top chart's selling price to list price ratios, most communities in south Durham show sales at levels near list price. The following chart shows the how the market had slowed over most of 2022 and had picked up in early 2023.
Some listings at low to middle price points are posted with offer dates, where no offers will be considered until that date. This is intended to pressure buyers (given the shortage of listings) and generate multiple offers.
Also, SPLP has averaged near the 97% mark, indicating that some homes sell above their list price. This shows that a common scenario is for more than one offer on properties, signalling that bidding situations are still in the mix - just not with the same intensity as earlier in the year.
Note the dominance of red bars in the chart before October, demonstrating averages above 100%, then a shift to blue bars, showing averages below 100%. This shows the change to more leverage in the market for buyers.
Days on market (DOM) averaged 28.6 days. DOM is the number of days it takes for a property to be sold firm, or without any remaining conditions.
This figure had dropped substantially in the spring and had been higher over the summer. It is now more stable.
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 dropped in the winter months last year. They have risen since last December to the highest levels since 2020, though sales have been strong enough to keep inventory levels low compared to the pace of sales.
The level of listings also makes all the steps taken to compete among selling properties more essential. When listings were more scarce, (including now but at lower price points) prospective buyers were compelled to reduce expectations on location, property condition, etc. They also will have pressure in competitive situations to remove conditions on their offers.
The sales rate has decreased by 53.5% compared to last month and is down 31.1% compared to last year, with 8.3 transactions per day.
The following chart shows the daily sales volume for the past 3 months.
Buyers will still find multiple offer situations in many locations 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 being volatile, and mortgage qualification rules under review, locking in a rate is more important than ever. Speak with your agent to discuss the process to move forward.
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.
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About the Author
John Owen, Broker, RE/MAX Impact
John is an award-winning broker with RE/MAX Impact Realty in Courtice, ON, and was their number one agent in GCI for 2022.
Office - 905-240-6777
Email - email@example.com
The figures shown are for the following property types: detached, semi-detached, condo townhouse, condo apartment, link, att/row/townhouse, co-op apartment, detached condo and co-ownership apartment.