The Devil’s in the Details, What February Sales Numbers Really Indicate

February sales stats were released late last week and they deserve a deeper dive than the headlines would lead you to believe.  Year over year sales were down 47% when compared to February 2022, shocking yes, but not so much when you factor in the relative reduction in new listings, which dropped from 14,153 in February 2022 to 8,367, a 40.9% decline..

Average selling prices have leveled off since the beginning of the year which indicates that there is some stability taking form in the market.  February of last year was the last full month of sales prior to the Bank of Canada delivering 8 consecutive rate hikes.  Prices have pulled back by 17.7% from last year's all time high, with the average Toronto home selling for $1,095,617. 

With the increase in borrowing costs many buyers are purchasing less house than they would have considered a year ago.  The percentage of homes sold under a million dollars increased to 57% of home sales vs. 38% from a year ago.  With a larger percentage of homes selling at a lower price point, this has inevitably pulled down the average home price.

Remember all homes and neighborhoods are not created equal and it is imperative that you work with a Realtor that understands the specific market segment you are looking to buy or sell in.

The End of Rate Hikes For Now?

On Wednesday, the Bank of Canada is widely expected to announce that it will be holding rates steady following 12 months of consecutive hikes.  

This will be the first pause in the most aggressive increase run that we’ve seen in a generation and a welcome break for anyone looking to make near term plans.

Further hikes have not been ruled out, with many analysts expecting one more towards the end of summer before a potential reduction in the first quarter of 2024.  This will depend on how sticky current inflation proves to be and the overall impact on the economy.  

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