Buyers, sellers adjust to market

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This article was published 10/09/2023 (755 days ago), so information in it may no longer be current.

Homeownership has always been a dream, and people will make adjustments to make it happen, according to Akash Bedi, director and immediate past president with the Winnipeg Regional Real Estate Board.

That rang true in a Winnipeg housing market that saw 4,209 listings and 1,395 total sales in August, according to a recent market release by the WRREB. The listings and sales were 12 per cent and two per cent increases, respectively, from August 2022.

Residential-detached homes, the most popular type of property, sold for an average of $405,477 last month, which is four per cent higher than the same time last year ($389, 830) and a 10 per cent hike against the five-year average ($367,655).

The numbers from the last full month of summer caught those at the WRREB off-guard, Bedi said.

“Finishing up 2022 and at the start of 2023 when we were trying to map out the year, we were kind of confused but we were predicting that it was going to be a bit of a slower, quiet year and the month of August proved that wrong,” he said.

“We saw activity increase and a main result of that is the demand is still there. Even with the rates increasing, we thought the year was going to be a little bit sluggish — and it’s been a bit up and down — but when we looked at the August numbers we were a little bit surprised.”

The consensus though among realtors at the beginning of the year, Bedi explained, was that Winnipeg would return to the market that existed before the pandemic, where supply and demand were near equal.

The demand has held strong in recent months, however, and Bedi maintained that can be attributed to buyers and sellers adapting to legislation changes and interest rate hikes cohesively.

“We have to really interpret these results very carefully. With the increase in activity, one can interpret that homes are being priced according to the market, which is very important,” he said.

“I think the market has adjusted. And when I say market, both buyers and sellers, the expectation and reality, I think, are a bit more aligned.”

That could mean some sellers letting go of their property for below listing, which is what Nicole Hacault, an 11-year realtor with Royal LePage, has explained to her clients.

“For the most part, what I’m telling my sellers is you have to be mentally prepared for everything in this market. Some houses are going crazy over sale and some are going under list price. You have to be mentally prepared and OK if either one of those scenarios happens because this market is unpredictable., Hacault said.

“A lot of where the market’s headed is going to depend on the interest rates. That rate hold that just happened, we saw it happen in January, everybody got really excited and they jumped into the market. This was across Canada.”

The Bank of Canada announced it decided to hold its policy interest rate at five per cent (prime is 7.2 per cent) on Sept. 6. A collective sigh of relief could be heard across the real estate sector after consecutive hikes forced many buyers to pump the breaks on their aspirations of owning a home.

“It will be a good thing (if activity continues to increase) but also a bad thing if it does that,” Hacault said. “If it takes off, the buyer confidence goes up — everybody gets really excited — what will happen is prices will go up and then in October they’re going to put another increase in the place to slow us down.”

The Bank of Canada will make its next announcement in October, which could reset the tone for the market across the country once again if rates rise again, or continue what’s been a strong end to the summer if they hold.

Hacault said she wasn’t surprised to see the Winnipeg market in August outperformed the previous year, given that’s when things began to slow down in 2022.

She’s noticed the strongest properties as of late have been those listed in the $300,000 range.

“There was a house that had 21 offers on it two weeks ago. I had a listing with 13 offers on it last week,” she said, adding both of those listings were between $300,000 and $400,000.

“It all depends on the price point. It sounds like the first-time buyers, they’re not scared. Those are your ones in the ($300,000 range),” she said.

“It’s once you start getting up into the ($500,000 range) that it’s not quite as busy and the strategy on pricing is really important. And those are the listings that are sitting a little bit longer.”

Bedi argued another reason for a strong market is the increasing cost of renting has perhaps persuaded some to bite the bullet and delve out more cash upfront to own a home. While conscious of the weight that Bank of Canada’s October announcement will hold, he suspected the rest of the year will align with a balanced market.

“The month of August was good. It was a busy month and for realtors, we were almost caught off guard with activity,” he said. “Depending on how October pans out with the interest rate environment, that will be a really good indicator of how we’ll finish off the year and how we’ll start 2024.”

jfreysam@freepress.mb.ca