The busiest months in real estate typically tend to be March, April and May. This year, of course things have been a little different. January and February were the extremely early start to the spring market. And then came interest rate hikes in March and a general cooling of the market. March and April as a result, witnessed listings lasting longer on the market and home prices falling. So, what happened in May?
The volume of new listings increased again in May. Many other things increased as well. The average number of days that a listing stayed on the market increased from 10 to 14. The average list price increased by about 15% and most notably, the average selling price of Waterloo rural real estate increased by 4% in May over April.
It seems that home buyers just couldn’t stay away from some of the excellent real estate that Waterloo Region has to offer. Buyers are showing less fatigue and more caution than they did during the wintertime and the market is sending out mixed signals to where it might be going next.
Most local Realtors, myself included, think Waterloo Region home prices will stabilize over the early summer and then continue a slow rise north.
So, as we see inventory levels increasing as they typically do at this time of year, buyers have some really great options to choose from, and choosing they are.
Currently in Waterloo Region
There are currently 97 homes listed for sale with the Kitchener Waterloo Real Estate Board in the rural towns and townships.
The average list price for homes listed in Rural Waterloo Region is just over $1,200,000.
The Median list price for homes currently listed for sale in Rural Waterloo Region is $900,000.
Last month, there were 90 homes sold through the Kitchener Waterloo Real Estate Board in the rural towns and townships.
The average list price for homes sold in Rural Waterloo Region last month was $988,058.
The average sold price was $1,080,513.
This represents 11.42% over list price.
The average days on market for these sales was 14.
The median days on market was 9.
The median list price for homes sold in Rural Waterloo Region last month was $899,900.
The median sold price was $994,500.
This represents 11.92% over list price.
When we reach the end of June, we will be half way through the year. The price gains made during the wintertime will have been taken back during the corrections in the spring. Normally, the real estate market goes into a bit of a summer slumber. But who knows if that will happen this year?
The sale price to list price ratio is an excellent indicator of buyer demand. Like rising prices, this ratio peaked in February, began falling in March. May saw this ratio fall to under 12%, where it was nearly 30% in February! Times have changed.
Interest rates remain low.
Interest rates increased by .5% in April. There is a lot of talk about them going up again in June. Many people are attributing the real estate correction directly to rising interest rates.
The cost to rent residential real estate increased last year and during the first five months of 2022. Rents follow home prices. This trend will continue.
Demand for homes remains high. It is still a seller’s market The number of homes sold has increased every month this year. Although things are improving for home buyers, we still have a supply/demand imbalance that will take a long time to correct.
As we move into the lazy days of summer it is wise to remember that Waterloo Region has one of the tightest real estate markets in Canada.
Keith Marshall is a contributor to the Rural Post