Durham Region Real Estate January 2024 Market Update
Last updated February 6, 2024, at 9:55 a.m.
The real estate market in Durham Region has finished January 2024 with much more sales volume and buyer activity than in the past quarter. Inventory levels are down substantially from October's high point for the last year.
Sales volume has jumped this month after easing off gradually each month since last spring. Metrics show things improving for sellers, though a surge in active listings may tip the scales for buyers once again.
Multiple offer situations are becoming more commonplace in lower and middle price ranges, as buyers scramble to compete for homes within their budgets. Tightening inventory and improved buyer confidence looks to be driving the change.
There looks to be an opportunity for buyers in high price ranges right now, as many buyers are sitting on the sidelines in this niche. We finished 2023 with the lowest annual sales volume since 2001. Once the buyer pool begins to regain confidence, via interest rate drops or on the inflationary front, expect a sharp uptick in buyer activity and competition - especially in Durham Region. This will have the effect of driving prices higher across the board, particularly in the higher 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, given the political pressure for aggressive government action on these issues. The first Bank of Canada policy rate announcement on Wed, Jan 24th held the overnight rate at 5.0%, as was widely expected. They also indicated that the rate would likely be heading down at some point.
Supply is very low to moderate, with just 1.8 months of inventory (MOI) for the entire region, and 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 January 2024
In January, transactions reported had selling prices averaging 894,825 in Durham Region, with the average property selling at 99% of list price (SP/LP). This is a 4.0% increase from last month and a 0.9% increase 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 last year, then turned lower in most of the months since. There was a substantial amount of activity at the lowest price ranges near the start of December.
The average selling price of detached homes is just under 1,000,000, 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 how market tightness slowed over most of 2022 and picked up in early 2023, before dropping since.
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 (selling price to list price ratio) has averaged near the 99% mark, indicating that some homes sell above their list price. In those cases, more than one offer is being placed on properties, signalling that bidding situations are still in the mix - just not with the same frequency as before the current downturn.
Note the dominance of blue bars in the chart before mid-January, demonstrating SPLP averages below 100%, then an increase in red bars, indicating averages above 100%. Those red bars are starting to show more frequently again, so watch as the next little while unfolds, especially if inventory remains low.
Days on market (DOM) averaged 32.5 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, but is heading lower.
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 climbed since last December to the highest levels since 2020 in October, though sales have been strong enough to keep inventory levels low compared to the pace of sales.
The level of listings also makes taking steps 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 rate of sales has increased by 15.2% compared to last month and is up 36.8% compared to last year, with 539 total units sold.
The following chart shows the daily sales volume for the past 3 months.
Here are figures for each community in Durham Region for January 2024:
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 planning to put their homes on the market 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.
Direct - 905-434-0067
Email - firstname.lastname@example.org
The figures shown are for the following property types unless otherwise specified: detached, semi-detached, condo townhouse, condo apartment, link, att/row/townhouse, co-op apartment, detached condo and co-ownership apartment.