We find ourselves within the traditional fall market, and I've been fielding inquiries from many of my clients regarding the duration of this active market phase. Typically, we experience an active real estate market through late November or early December. However, adverse weather conditions or, worse, higher interest rates could potentially bring this period to a premature close. Fortunately, the Bank of Canada opted not to raise interest rates during their September 4th announcement, allowing the market to maintain a stable pace.
The next announcement is scheduled for October 25th, and as is customary, opinions within the industry and among homeowners are divided on what to expect. A decrease in rates appears highly unlikely, which is why there is a sense of hope in that direction. More realistically, we are likely to either witness an increase or the maintenance of the current key interest rate.
Are the alarm bells ringing causing concern? According to the CEO of the world's largest bank, JPMorgan, we might be in one of the most perilous periods the world has witnessed in decades. This apprehension stems from "extremely high government debt levels" and the ongoing Israel-Hamas conflict. It's essential to recognize that changes in the real estate market can originate from various sources, and while local factors like population growth and interest rates play a significant role, global developments also reverberate locally.
In the Brantford and Brant County region, the real estate market in 2023 has exhibited a relatively steady trajectory, with a more standard increase in the early spring, maintaining stability throughout the summer months. In September 2023, the median selling price for a detached home in the area hit $700,000 precisely, marking a $15,000 increment from the previous month. September 2022 appears to have marked the low point following the peak in March of that same year. Currently, the median sale price is $70,000 higher than in September 2022 but remains $202,000 lower than the March 2022 peak, where the average detached home sold for $902,000 in our region.
Overall, it's my belief that our local market will remain relatively stable in the upcoming months. Those most adversely affected are likely to be individuals who purchased homes near the market peak, especially if they need to sell in the current market conditions. Additionally, those who acquired new construction homes early in 2022 and were banking on those prices remaining high may encounter challenges closing if they have not sold their home already. The rise in interest rates has diminished the purchasing power of buyers, necessitating a decline in prices. A mere 25 basis point increase translates to around a $15 monthly payment increase for every $100,000 borrowed. Although this may not seem drastic individually, it can accumulate, potentially pushing buyers already stretching their budgets out of the market.