Posted on
January 4, 2024
by
Brian Stolp
Let's reflect on 2023, which is now officially in the books. The major highlights were the buzz about interest rates going up and home prices going down. Let's break it down.
Despite all the chatter about interest rates, the actual increase in the Bank of Canada's key lending rate was only 0.75%. Most of the 2.5% increase from the market's peak in 2022 took place in 2022. Interestingly, towards the end of 2023, many lenders started lowering their fixed mortgage rates. I've even heard of lenders offering sub-5% interest rates on 5-year fixed mortgages for prime borrowers.
As for home prices, they hit their highest point in February or March of 2022 and then took a noticeable dip of around 20-25%, depending on the property type and location. The news throughout 2023 made it sound like the market was still on a downward spiral. However, here in the Brantford Region, our sale prices stayed pretty stable throughout the year. In January 2023, the median was $650,000, and the average was $674,989. By December 2023, the median was $660,000, and the average rose to $755,207. It's a different story from what the headlines might suggest.
Observing the market daily, it's easy to notice some properties taking longer to sell, making it seem like the overall market is struggling. ⏳ The average days on the market in the Brantford Region is currently 30, which might not be the most promising trend, but it's still much lower than the pre-2021 norm. Back in 2009, when I started selling real estate, the average days on market was around 90.
One key observation from my team and me is the importance of good marketing and experience. When properties didn't sell as quickly, some complained about the costs of keeping homes on the market. In response, we doubled down on providing what we believe is the best marketing and exposure for our clients. Negotiations are back in play, and our experience has proven invaluable in helping our clients navigate the market successfully.
Looking ahead to 2024, I don't have a crystal ball , but I do believe it'll be a year of growth for the market after a year of uncertainty and stagnant prices. In 2023, we closed the year with homes selling for 97.8% of their asking price within 30 days, averaging $755,207 – overall, a good year. Despite the usual quiet in December, our team closed several deals, indicating strong interest from buyers and pleasantly surprised sellers.
There's talk of the Bank of Canada reducing its key interest rate in 2024, possibly starting as early as April. Economists are predicting a 0.75% decrease to 4.25% by the end of the year through three 25% reductions. This will attract more buyers to the market, although some might be tired of hearing Realtors saying “now is the right time to buy”… Still, I believe we'll look back at the beginning of 2024 and think those were pretty decent prices. As interest rates drop, more buyers, especially investors who have struggled to make numbers work on investments, will return to the market. This influx will ultimately push prices up, with estimates ranging from 5-10% by the end of the year.
Real Estate as it should be… In 2022, we established the River Realty Team with a vision to assemble a group of like-minded professionals dedicated to delivering the absolute best for our clients. Whether you're buying, selling, or leasing, we bring a wealth of experience to guide you through every step. Our commitment to pushing marketing boundaries and exploring innovative styles ensures increased visibility for your properties.
One of the things that sets us apart is our unwavering dedication to continuous improvement. Through weekly team meetings, we engage in training, meticulously dissect market data, and physically view newly available properties. This proactive approach allows us to stay sharp and knowledgeable about the current market trends, ensuring that our clients benefit from the most up-to-date insights.
By consistently challenging and educating ourselves on negotiation styles and tactics, we maintain a leadership position in the real estate industry. Our insights extend far beyond our newsletter, offering a depth of knowledge that sets us apart.
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I can’t wait to show you some of the stuff we have in store for 2024!
