December 2017 – Market Update

Elevated inventory levels continue

For the second month in a row, sales on all types of homes improved in December. However, an increase in new listings has kept inventory levels lifted and pushed benchmark prices down for the fifth month in a row.

During the first half of 2017 we experienced price growth in the detached sector as the disparity between supply and demand began to disappear. Through the year, as prices rose, many who had held off on selling their home took the opportunity to realize a higher sales price. This increase in inventory has resulted in plateaued price growth.

Ann-Marie Lurie, chief economist for CREB noted that “Many economic indicators continue to post modest improvements, including improving sales. However, demand gains have not outpaced the additional supply coming into the housing market. This is creating some of the bumpiness in terms of price recovery”.

Overall, the benchmark price for a detached home in 2017 was $504,867, up 0.63% over 2016’s benchmark.

Similar to the detached market sector, the attached sector saw increased sales when compared to inventory in the first half of the year resulting in price increases. Late in the year, inventory levels rose reversing much of the price gains. The benchmark price for an attached home in 2017 was comparable to that of 2016 at $332,325.

High inventory in the condo/apartment market continued to cause challenges in this area with benchmarks continuing to fall an additional 4% this year.

“This year, we saw a rise in the number of consumers willing to purchase in the market with the expectation that the economy had already shifted. There were also many who waited to list their property until prices showed more stability” stated CREB president David P. Brown.

“Those who acted were typically driven by longer-term plans that best suit their current lifestyle. We are ending the year with stronger sales in the last quarter, but supply levels are holding back price gains. The year played out as expected with a transition from price declines to general price stability in most sectors of the market.”

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