2023 Real Estate Market - Was it bad, or was it just bad for Realtors?

Written by Chris Perkins, Broker/Owner - Coldwell Banker Maritime Realty.

I’m sure when you spoke to your real estate friends this year, most of them complained about how slow the market was. However, while it posed problems for us in the industry, it was a better market (in the Halifax area at least) than you might expect. 

To explain what I mean, we need to look at the years gone by:

Admittedly, sales were the lowest they’ve been since at least 2010 which is as far as I can go back in time. Sales volume like this would generally be catastrophic for prices were it not for the dramatic drop in inventory (you'll note the sale to new listing ratio is higher in 2023 than in 2018).  For us in the real estate industry in comparison to 2021, there were 1,400 fewer listings and a whopping 2,200 fewer sales. Ouch!

The Important Piece | What does the market mean for you?

While aggressive interest rate increases might seem like a bad thing on the surface, they have accomplished exactly what was intended: To slow down the market.  Without these interest rate hikes, sales would have continued at a rapid pace.  I’m almost certain demand would have outstripped supply, making already high housing prices even higher.  Low interest rates and soaring home values, or high interest rates and a real estate market with balance.  You pick!

Even with higher interest rates, the average price of a home in the Halifax Regional Municipality grew 4.9% in 2023.  This is far more sustainable than the double-digit gains of 2020/21.  This year, we’ve seen inventory increase to the highest level since 2020. But, we still have a serious shortage of housing. 

In 2023, our market peaked with 846 homes for sale in all of HRM. Compare this to a normal year like 2019 where we had 1,941 homes at the peak.  There are more homes for sale in today's market than in recent times, but quite clearly, nowhere near enough. 

My Take on 2023

This was a market that was good for everyone except for those in the real estate industry. Buyers finally had a chance to breathe and were able to take more time to shop around.  The buying process should be an enjoyable experience, not one where you feel you’ve got a gun to your head. In higher price brackets, negotiation became possible and if you were able to stomach higher interest rates in the short term, your long-term bang for buck has the potential to be significantly better. 

For Sellers, you might not have experienced 10+ offers like in 2021, but if you bought three or more years ago, your home value is up 32%. Your $400,000 house is worth $530,000 today. If you purchased less than 3 years ago, you’ve had gains as well, although home values have fluctuated seasonally in that time.  Homes are most expensive in the Spring, and least expensive in the winter (a 10-15% swing). 

What about 2024?

All the talk is that interest rates will start to drop in the Spring (some fixed rates have come down already). Rent has not gotten any cheaper and I expect people who were sidelined during rising interest rates will start to buy.  The unknown is how mortgage renewals will play into the number of new listings. I wrote a blog on how to deal with renewing with higher interest rates, and one scenario is people will sell their home because they can’t afford the new payments. The good news is they will more than likely have the equity to do so.  Will supply and demand balance out? Or will buyer enthusiasm with the promise of lower rates compound our housing crisis? We’ll have to wait and see. 

Professional Real Estate Guidance

I have more than 16 years of experience in the real estate industry in two provinces and have sold in every type of market condition you can imagine. I'm an award winning Realtor who's ranked in the top 1% of Coldwell Banker agents internationally.  I am extremely equipped to help you make your next move, whether selling or buying. If you are looking to navigate the housing market, lean on me and my team at Coldwell Banker Maritime Realty to help you achieve your real estate goals. 

Chris Perkins on the Global Halifax Morning Show with Paul Brothers

Written by Chris Perkins, Broker/Owner
Coldwell Banker Maritime Realty

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