How is everyone doing this lovely October day? You likely already have your sweaters out and parka on standby – sorry to break the bad news but 75% of Canada’s provinces will see snow next week.
Now, on to real estate! This month, we saw a decrease in total condo sales year over year and month over month. We also saw a decrease in sales volume year over year, although, we saw an increase in sales volume month over month. Let’s delve into the numbers for our Liberty Village condo market in September and let them do the talking.
How Many Condos Sold in Liberty Village In September?
September 2022 saw a total of 15 condo sales in Liberty Village. In comparison, September 2021 saw a total of 47 condo sales. A 213.33% decrease – if you follow real estate, it will be no surprise that inventory and interest rates have increased and demand has decreased. For buyers, this can be seen as positive news – less competition and more to choose from. In July 2022’s blog post, we mentioned that it wouldn’t be accurate to call this a “buyer’s market” as prices had steadily been increasing year over year. Although, this month, and as you’ll see later on in this blog post, prices did decrease year over year – we’ll talk more about this later on. However, what we can say for certain is that 15 buyers had enough confidence in the market to make one of the largest purchases of their lifetimes.
When looking at condo sales month over month, August 2022 had 21 sales. That’s a 28.57% decrease in condo sales month over month. Historically, we see that condo sales decrease as the weather gets cooler, except, inventory doesn’t usually increase at the rate that we are seeing. We can attribute this decrease in condo sales month over month to the interest rate hike and the fall, almost winter market. The increase in supply can be explained by the various properties that are simply not selling and being carried over to the following month. Some listings are even being terminated, meaning, they are being removed from the market. Some sellers are opting to rent out their units, not because that is their preference, but because the rental market is far more dependent than the sale market. Another factor could be that the interest rate hikes are affecting those with variable rate mortgages and the monthly carrying cost is becoming too expensive – hence, the need to sell. We are very intrigued to see how prices were affected… stay tooned for this later in the blog post.
To sum it up, condo sales in September decreased month over month and year over year and the number of buyers confident enough to make their biggest lifetime purchase was a small number given the lack of demand, surplus in inventory and increased interest rates.
Sales volume tells us part of the story. Let’s look at prices. Did values increase, remain the same or decrease from September 2021 to September 2022? Let’s take a look at the average sale price for all types of condo sales year over year.
The average sale price in September 2022 was $731,937 on the 15 sales. The average sale price for the 47 sales in September 2021 was $779,548 . A 6.11% year over year decrease in sale prices. Now, we expected this to eventually happen. When we’re talking about this decrease in sales price year over year, we have to take into account last years interest rates vs this year’s interest rates, the surplus in inventory vs sold listings and decrease in demand – these are the many conditions that come together to create the perfect formula for a “buyer’s market”. In July 2022’s blog post, we said that we could not call it a “buyer’s market” because prices were still up year over year. This month, the final ingredient of lowered year over year prices has been added to the picture – so, we can confidently say that it is now a “buyer’s market”. You may be asking, why hasn’t the decrease in sale prices year over year already had a positive impact on demand. Well, the answer is likely that, if any effect will be felt, it hasn’t kicked in yet. The other piece is that, no matter how low prices become, there is still the piece of high interest rates that significantly impact a buyer’s purchasing power. Some will tell you that until they lower interest rates, the market will not recover. What do you think? Let us know your predictions in the comments below.
The average sale price in September 2022 was $731,937 on the 15 sales. The average sale price for the 47 sales in September 2021 was $779,548 . A 6.11% year over year decrease in sale prices. Now, we expected this to eventually happen. When we’re talking about this decrease in sales price year over year, we have to take into account last years interest rates vs this year’s interest rates, the surplus in inventory vs sold listings and decrease in demand – these are the many conditions that come together to create the perfect environment for a “buyer’s market”. In July 2022’s blog post, we said that we could not call it a “buyer’s market” because prices were still up year over year. This month, the final ingredient of lowered year over year prices has been added to the picture – so, we can confidently say that it is now a “buyer’s market”. So, what does this mean for buyers? You may be asking, why hasn’t the decrease in sale prices year over year already had a positive impact on demand. Well, the answer is likely that, if any effect will be felt, it hasn’t kicked in yet. The other piece is that, no matter how low prices become, there is still the piece of high interest rates that significantly impact a buyer’s purchasing power. Some will tell you that until they lower interest rates, the market will not recover. What do you think? Let us know your predictions in the comments below.
Now, what about sales volume month-over-month? The average sale price in August 2022 was $723,815 on the 27 sales. A 1.12% month over month increase in sale price. Now, this is interesting. If you’re a real estate fiend, you know that prices have consistently fallen month over month. This month puts a spin on the overall picture. Although, we have to remember that it’s normal for real estate to have its highs and lows and adjustment periods. With the big picture in mind, a 1.12% adjustment in month-over-month sale prices is a minor one. However, we can’t ignore the fact that a month over month increase in real estate may be the driving factor for an owner to put their property up for sale. In this market, even the small returns are meaningful. Now, buyers, don’t get too worried. We don’t expect this price increase month over month to continue. The colder weather combined with all the variables we talked about earlier in the blogpost will likely make the perfect formula for sale prices to drop month over month.
The Liberty Village condo market for September 2022 has proven to be an interesting one. We do have to give a notable mention to the 1.12% month over month increase in sale price. What are your thoughts?
Any predictions for the rest of the Fall and Winter market? Let us know in the comments below.
Curious how September 2022 differed from the year before? Take a look back at our post for the Liberty Village condo stats in September 2021.
If you have any specific questions about the market or are curious as to how this relates to your Liberty Village condo, get in touch. You can fill out our Condo Value Form or send us an email.
