Housing sector happy to see a busy Q1

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This article was published 15/04/2024 (511 days ago), so information in it may no longer be current.

Local real estate professionals were optimistic that Winnipeg’s housing market would rebound this year after seeing an uptick in sales and total dollar volume to end 2023.

So far, they’re bang on.

A growing sense of confidence among buyers, as they’ve come to terms with high-interest rates, led to a busy first quarter in the Manitoba capital.

The Winnipeg Regional Real Estate Board released its market analysis for the first three months. Among the most notable data were an 11 per cent increase in residential detached home sales (1,682) and a 19 per cent increase in dollar volume for residential detached homes year-over-year in the opening quarter.

The 2,574 MLS sales in Q1 were the fourth-most in the last decade, while the $932.7 million in volume is the third-most, behind the record pandemic years.

“(The numbers are) better than what I probably would’ve anticipated,” said Rena Prefontaine, past president of the Winnipeg Regional Real Estate Board. “I would’ve thought maybe a slow increase, maybe five per cent increase in sales.

“I think the first quarter has given me more optimism that we’ve turned that corner from where we slumped a little bit in late 2022 and much of 2023.”

Winnipeg’s 12,978 MLS sales in 2023 were the lowest in the last five years, while the average price of a residential-detached home dropped to $399,430, from $412,745 in 2022.

The numbers shifted in favour of buyers, although, fewer people were willing to test the market as the Bank of Canada continued to deploy one of its most aggressive campaigns of rate hikes on record, raising its policy interest rate to five per cent during the summer.

The central bank has since held rates steady over the last six rounds of decisions — the latest came on Wednesday. Now, with the economy and inflation slowing down, the Bank of Canada is reportedly looking at easing its monetary policy in the coming months.

During a news conference last week, Governor Tiff Macklem said a June rate cut is “within the realm of possibilities.”

With that in mind, Prefontaine said there could be some pent-up demand in Winnipeg’s market.

“I honestly think that that’s probably starting to be what we’re seeing. People just kind of took their foot off the gas in (the fall) of 2022, and 2023 they just coasted, and now I feel like people are pushing play,” she said.

“I think it’s kind of like, ‘We have to make a move, there’s no point waiting too much.’”

Nicole Hacault, a 12-year realtor with Royal LePage, said the market is already piping hot.

Last year, a sought-after listing could expect three to five offers, Hacault said. Earlier this month, one of her listings fielded 24 offers, and another in Tuxedo (priced at $899,000) sold for $362,000 over list (no, that is not a typo). The latter is certainly an anomaly, but one that paints a clear picture about where the market stands and where it could be headed.

“We’re seeing it right now,” Hacault said. “We’re telling (buyer) clients that they need to be getting ready for $50,000 over list.

“We’re seeing multiple offers all over the place, it’s incredibly hot already. If it heats up even more, could we reach those $100,000 over list price again? Potentially, because it seems that once you reach that frenzy the buyers do what they need to do to get a house.

“We’re all, as realtors, bracing ourselves for when that rate drops because all the buyers that are on the sidelines right now are going to come out. That drop is going to be a signal to many that this is now the time to enter the market. We definitely expect there to be a further uptick in the amount of buyers in the market and then also the sale prices.”

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The busiest homes in the first quarter were those priced between $550,000 and $600,000, Hacault said. Typically, the most competitive market falls in the $300,000 to $400,000 range.

“What that’s also telling us is that people are accepting and they’ve come to terms with the idea of losing their (mortgage) rate. The $500,000 (homes) weren’t hitting the market, nor were people purchasing as much in that market before. But now, the fact that we’re seeing this huge increase in sales, is like, people have accepted the fact that they’re gonna lose their two per cent rate but they can’t stay in their house any longer — they have to move up.”

Whether you view a busier market positively or negatively likely depends on which side of the coin you fall on. Sellers, Hacault said, are resting peacefully knowing the price of their home is increasing and their equity is safe.

“If you’re a buyer,” she said, “perhaps you have more feelings of frustration because the prices are only going up.”

joshua.frey-sam@freepress.mb.ca

Joshua Frey-Sam
Reporter

Josh Frey-Sam reports on sports and business at the Free Press. Josh got his start at the paper in 2022, just weeks after graduating from the Creative Communications program at Red River College. He reports primarily on amateur teams and athletes in sports. Read more about Josh.

Every piece of reporting Josh produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.