If you bought a home at the Peak of 2022, you’re okay!
I’m sure that if you purchased a home in April or May last year, everyone you spoke to about it had a look of terror wash over their face. It would have followed with doom and gloom comments about rising interest rates and how they were going to cause a calamitous drop in home prices. While rising rates did cause a slowdown in sales and a 16% drop in average price, those losses are almost completely erased in six short months.
At time of writing, the average price of a home in the Halifax Regional Municipality is $572,000 (based on a rolling 3 months of data). At the peak, we were at $602,000. At the bottom, we were at $506,000. Since the bottom in October, the average price has recovered by $66,000 or 13%. What’s causing the upwards pressure on prices when sales have slowed down so significantly?
Supply and Demand
Even though sales were sluggish in the latter part of 2022 and early into 2023, the number of homes for sale remained extremely low. We still only have 1.8 months of supply which means if nothing else were listed, it would take less than two months for everything to sell. Anything less than three months represents a Seller’s market where we expect to see upwards price growth. Unsurprisingly, that’s exactly what is happening.
Outlook on Home Values
Unless we see a significant increase in the number of homes for sale, the upwards pressure on home values is likely to continue. We recently worked with a military relocation who came equipped with a healthy budget and a very reasonable list of wants. After a thorough look at what was available on the Halifax Peninsula, they ended up deciding on a Clayton Park home where they could get a lot more house for their dollar. If you are waiting for prices to fall before buying a house, you might want to consider adjusting your criteria instead. It is extremely likely things will be more unaffordable six month from now.
If you have questions about buying a home in Nova Scotia or how to maximize your property value when selling, reach out to us to start planning your next move.
Chris Perkins, Broker/Owner
HaliPad Real Estate Inc.
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