"How's the market, Curtis?"
I'm asked that a lot lately.
My first reaction is to pretend my phone is ringing, "I gotta take this one, can't talk."
But I would never do that, I suppose. So, I'll answer your uncomfortable question.
Here goes...
It's terrible out there right now.
First some numbers, then some thoughts on why.
Sixteen Sales in Regina Last Week
From January 7-13th of this month, a total of sixteen homes were sold in Regina. This includes condos, duplexes and single-family homes. There are close to 900 active listings on the market.
Is that good? Not very.
Sales for the week of January 7-13th
2023 - 16
2022 - 41
2021 - 37
2020 - 18
2019 - 26
2018 - 21
2017 - 21
2016 - 24
2015 - 28
2014 - 30
2013 - 27
2012 - 55
2012 was the tail-end of the boom, and the number is high. Historically high for the second week of January.
2013 was the beginning of the big chill. Not enough new people were arriving to fill up the new-build condos and duplexes, supply was outpacing demand, and the builders were liquidating their leftovers. Their rock-bottom prices left the happy people that just moved in wondering why they paid more for their unit last year than the builder was selling them for now 😩
2021 and 2022 was a post-pandemic bump. There was pent-up demand and low interest rates.
Now 2023, and everything looks bad again.
Why?
Let's start with the interest rates.
A 5-year fixed mortgage in 2012 was around 3%. Rates continued dropping for the next several years. In 2020 you could find 1.5% on a fixed mortgage. Practically free.
In 2022 the Bank of Canada raised thier overnight rate by 4.0% in a series of moves. It's now sitting at 4.25%. Before the rate hikes started last March, it was at .25%
Right now, a 5-year fixed is around 6%
So higher interest rates have a part in this. But I think people will just get used to it. It's like when gas went up to $2/litre—everyone said they were going to walk. Just about no one did. They got used to paying $2/litre and carried on. I think people will get used to the new interest rates and just carry on. They haven't yet though and have pulled back.
Inflation is also playing a part in this.
With the price of EVERYTHING going up, people I talk to are a little spooked. If the bills are piling up, you're not really thinking of moving. Shelter in place instead.
Predictions?
I think things will improve into the spring and summer, but slowly, as we adjust to the new normal. No boom anytime soon and no 1.5% mortgages on the horizon.
The good news is there are some killer deals out there right now. Go get one!
CB
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