The housing market is set for a favourable spring as detached prices stabilize and city-wide inventory trends downward
Ask economists about the highs and lows of the housing market and they’ll say it won’t last –there’s a natural equilibrium that will eventually push things back into balanced territory.
It’s a theory that was certainly tested over recent years, but as time will attest, its best to trust economists in these matters.
As spring gets underway amid a strengthening regional economy, the housing market pendulum is slowly swinging back toward the middle.
Sales were still 10 per cent below long-term trends in March, but above levels seen in recent years, while average inventory declined compared to last year, supporting price stability in the detached market.
It’s not so much that demand went through the roof in March, but that we had less supply come onto the market, which is really helping to balance things out.
“It’s not so much that demand went through the roof in March, but that we had less supply come onto the market, which is really helping to balance things out,” said CREB® president David P. Brown. “These changes are lifting the cloud of uncertainty for housing consumers and nicely positioning our market as we move into the more active spring season.”
Unadjusted detached benchmark prices totaled $503,900 in March. That’s 0.4 per cent above last month and similar to levels recorded last year.
One hiccup, however, is in the apartment and attached sector where prices continue to remain well below last year’s recorded levels.
“Market conditions are quite different in the apartment sector,” said CREB® chief economist Ann-Marie Lurie. “The additional supply coming from the new home sector is not easily reversed and the added competition is continuing to weigh on prices in the higher density sectors of the market.”
City-wide inventory levels totaled 5,114 in March, 16 per cent below last year’s levels. This is primarily driven by the 25 and 17 per cent contraction in the detached and attached markets.
Inventory levels in the ownership apartment sector remain three per cent higher then levels recorded last year.
“The housing market transition in the first quarter appears to be consistent with trends in the labour market,” said Lurie. “However, the way the rest of the year unfolds will be largely determined by what happens in the next two quarters, as nearly 60 per cent of all housing sales typically occur in that timeframe.”