There was significantly more movement in November’s real estate market than last year and the first half of December was quite active, but the signs of the holiday slowdown are definitely taking hold. Fewer properties are coming to market and there are fewer showings on the properties that are currently available. That being said, I have just listed a cute one bedroom in the Annex!
What’s not uncommon for this time of year is that it isn’t just the new listings that are selling. What I often see at the end of a traditionally busy real estate season is that there is also an uptick in the sales of properties that have been sitting on the market for months. In my neighbourhood, one home sold that had been for sale since June! One reason for the action could definitely be attributed to the Bank of Canada rate cut in October and consumers were expecting another in mid-December. Turns out they were right!
Of course, who isn’t happy with the latest announcement from the BoC (a .50% rate reduction)? I think it will definitely help propel the market forward well into 2025, but I’m not confident it’s going to light a huge fire under people’s butts to take action during late December. Even with new mortgage rules coming into effect, I think the holidays will override the immediacy of the market taking off.
I do think we could see the spring market begin sooner than usual. I’m already meeting with homeowners to discuss what they’re going to do in the spring, so that’s a positive sign.
There’s another rate announcement due on January 29th, and if it’s a cut, or even a hold, that should give some confidence to hesitant buyers that things are settling down.
On the flip side, the other thing to consider is the incoming regime in the U.S. As much as the stock market has been doing really well, there’s a lot of talk about it being another bubble, not to mention concern about how the tariffs will affect us, along with the weakening dollar. There are still a lot of unanswered questions until Trump gets into power. Expect the next 4 years to be a bumpy ride!!
Although average home prices are actually lower than they were in 2021 (according to TRREB), the cost of living has gone up significantly and if the U.S. comes through with tariffs as threatened, affordability could get worse. So low interest rates alone won’t be enough to get the market going again.
So when is the right time to buy?
Some colleagues will always telling people that NOW is the time to buy regardless of market conditions, but with this market, they probably have a point.
If someone buys now, they won’t be closing for 60 to 90 days, which would be the end of March. There will be two more rate announcements between now and then. If rates go down, buyers get the benefit of that. It’s unlikely rates will go back up so soon, if anything, they’ll stay consistent.
I’m frequently being asked what I think will happen in 2025 and the bottom line is that it’s impossible to predict. There are lots of little things happening to encourage movement in the housing market. No single change is going to have a big impact, but at some point, we’ll reach critical mass and then we’ll see action when people feel confident enough to move forward.
I still feel like there’s restraint to the market, some hesitation, and people are just sitting on the sidelines waiting to see what’s going to happen.
If you’re curious about what’s happening in the market or are curious about what’s happening on your street, please get in touch!
