Last update: May 3, 2023
Sales volume and sale prices jumped sharply in April and the market showed remarkable growth in April.
The series of interest rate hikes in the last year had a dramatic impact on buyer budgets and home prices. Fixed mortgage rates have dropped heading into the spring market.
Take a look at the following chart, which shows detached home prices for the entire Peterborough district:
Since reaching an all-time high last February, prices had eased considerably, giving buyers more options. Prices have been rising since hitting a low for the season in December, then jumped sharply in April.
The recent price bump is largely attributable to a drop in inventory relative to sales volume combined with buyer demand.
The following chart shows sale prices for all residential property types:
Sales volume rose considerably in April, as is typical this time of year.
Another common benchmark is called SPLP or Selling Price to List Price. It measures the sale price of a property in relation to its listed price.
As you can see in the following chart, properties have gone from selling at about 16% above list price at this time last year to about 2% below list price in April.
The difference is largely due to a shift in pricing strategy on many listings. When inventory was more scarce, most homes were listed at a price lower than expectations, with offers held until a set date and multiple offers in most situations. Now, with more listings to choose from, buyers are able to choose which listings they place offers on, and bidding wars are less common. More listings are seeing this pricing strategy unsuccessful, and are cancelling the listing after not getting the price they wanted, then re-listing with a higher price and negotiating to a sale price more in-line with the revised list price. Hence, we are seeing the sale price to list price ratio below list price, on average.
The recent rise in this stat shows that buyers are having to compete on more listings, with multiple offer situations starting to come back into the market.
The Peterborough market had been in a strong seller's market for some time, indicating that market conditions heavily favoured sellers over buyers.
The following chart shows months of inventory (MOI), which is the amount of time it would take for listings to sell out if no new listings were added.
A seller's market is when MOI is below 5. A balanced market is between 5 and 7, and a buyer's market is over 7 MOI.
The lowest point in the past year was April 2022 when this figure was at about 1.2 for the region. It now sits at about 2.7 - clearly not as difficult for buyers as it was at the end of 2021, but still well below a buyer's market.
The following chart shows active listings (how many homes are for sale) in the Peterborough region.
The number of active listings reached a low point for the past year in April 2022. They rose in the summer to a high for the past year at about 475 (now about 380) - in August of 2015 they were 1028 - in 2011 they were 1258.
If you are considering selling your property, now is still a good time, given the inventory shortage.
Should you be looking to buy, it can still be competitive. Multiple offer situations are common at in-demand price ranges, so it pays to be well-prepared. Speak with your lender to get a pre-approval, and work with an experienced Realtor to research listings and review recent sales of similar properties.
If you are interested in information on a specific area, please reach out to me anytime!
John Owen, Broker
RE/MAX Impact Realty, Brokerage