Durham Region Real Estate Daily Market Update
Last update February 30, 2023 at 11:45am
The real estate market in Durham Region has started the new year with a market dynamic that is now quieter and far more buyer-friendly than it was a year ago.
With low inventory and high demand, prices normally would be rapidly increasing, but the recent interest rate and inflation situation have clearly cut into buyer budgets, allowing prices to stay somewhat 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 2.3 months of inventory (MOI) for the entire region, and much higher levels in some 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 January, transactions reported thus far had selling prices averaging 896,796 in Durham Region, with the average property selling at 99.2% of list price (SP/LP). This is a 2.6% increase from last month and a 23.5% decrease from last year.
Here is a look at average detached home selling prices each day over the past 3 months:
The average selling price of detached homes is just under 990,000 overall, as summarized in the above map.
Townhouse sale prices are now averaging just under 815,000 across the region.
If you look at the top chart's selling price to list price ratios, some communities in south Durham still show sales at levels close to list price. The following chart shows the trend - another key indicator of why the market had been so hot and illustrates how things have softened.
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, and a list price 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 21.9 days. DOM is the number of days it takes for a property to be sold firm, or without any remaining 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 13.1 units per day - up 7.1% from last month and down 32.5% from the same period last 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 in the marketplace.
The following chart shows daily sales volume for the past 3 months. Of note is the very low volume over the holiday period, and the rapid rise since then.
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 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.
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