What’s Causing the Real Estate Market Slowdown?
The Canadian real estate market has slowed down from the record highs of last year. However, fewer home sales don’t necessarily mean homes are selling for less. This article will look at what’s causing the market to slow down and what’s actually at play.
A Lack of Listings to Blame
There’s no other way to put it: 2020 was a banner year for the Canadian real estate market. The highest number of homes were sold in history last year.
But home sales couldn’t continue at this pace forever. It just wouldn’t be healthy or sustainable. Home sales are down from the record year last year, but home prices haven’t followed.
Home prices remain high due to a lack of inventory. And there’s a lack of inventory because fewer people are choosing to list their homes.
It seems like March 2021 was the peak during the pandemic for home sales. Homes sales are expected to slow down the rest of the year. This has shifted the real estate market from a balanced market to a seller’s market in many cities across the country, putting home sellers squarely in the driver’s seat.
A Return to Normal?
It shouldn’t come as a surprise that home sales have slowed down since then. It couldn’t go on like this forever.
At first glance, it may seem like the real estate market is becoming healthier, but that doesn’t appear to be what’s happening.
With the newfound freedom at the beginning of COVID, where many workers could work remotely, many people moved up their plans to relocate. However, that influx of people is largely over.
With a return to the office seemingly imminent, people are less keen to relocate. They wouldn’t want to relocate to somewhere far away, only to find out that they’d be expected to go into the office five days a week in the future.
That’s leading to the real estate market returning to the state it was in before COVID. Back then, it was still a seller’s market. This hasn’t solved the chronic listing shortage issue many homebuyers face.
The Bottom Line
If you’re looking to buy a home, the best way to do so is by working with an experienced realtor who knows the market you’re buying in. Our mortgage experts can help introduce a real estate agent that would be well suited for you.