Is 2023 the year of recovery for the Niagara real estate market? This is the term many housing experts are tossing around for the national housing landscape and the Niagara region this year.
This theory makes a lot of sense for a variety of reasons. It seems that we are not the only ones who think so either. Not too long ago MoneySense magazine determined that Niagara Region was one of the more prominent national housing marketplaces for buying a home. This was based on economics and neighbourhood characteristics as well as average dwelling prices and price growth over time.
So, yes, recovery could be the best term to utilize when describing the state of the Niagara Region housing sector.
What exactly is happening in the Niagara real estate market anyway? Let’s take a look at the latest numbers to find out.
What’s Happening in the Niagara Region Housing Market?
Residential property sales plunged nearly 20 per cent year-over-year in April, totalling 632 units, according to new data from the Niagara Association of REALTORS (NAR). In the first four months of 2023, home sales have plummeted more than 29 per cent from the same time a year ago, with slightly more than 2,000 units exchanging hands.
On a historical basis, home sales were close to 14 per cent below the five-year average and more than 15 per cent below the ten-year average for this time of the year.
Home prices have come down considerably from the previous year. Association data show that the MLS® Home Price Index (HPI) declined at an annualized pace of 19 per cent to $654,100 in April. The average price of homes sold in April was also down by roughly 14 per cent to $728,568.
However, on a month-over-month basis, the benchmark sales price rose two per cent, “indicating an increase in consumer confidence,” said NAR president Amy Layton in a statement.
All residential property types saw a notable year-over-year slide in the benchmark price:
- Single-Family Homes: -19.2% to $668,700
- Townhome: -16.9% to $614,100
- Apartment: -13.6% to $444,300
In the first four months of the year, average home prices dropped close to 20 per cent to below $693,000.
“The amount of sales remained the same from March 2023 to April 2023, but with 10 less average days on the market, from 41 days in March 2023 to 31 days in April 2023,” Layton noted. “The buyers are there, and they want to buy, as indicated by the decrease in the average days on the market, increase in price in one month, and the same amount of sales with less listings available.”
Meanwhile, housing stocks were mixed to kick off the typically busying spring buying seas, says the NAR.
New listings declined 28 per cent to 1,097 units, while active residential listings advanced about 50 per cent from a year ago to 1,756 units. The former was 8.8 per cent below the five-year average, and the latter was 19 per cent above the five-year average.
Months of inventory clocked in at 2.8, up from 1.5 in April 2022 and slightly above the long-run average of 2.6 months for this time of the year. This is a widely watched metric because it measures the number of months it would take to exhaust current supplies at the present rate of sales activity.
New housing construction activity has also slowed down as housing starts totalled 147 units, down more than 70 per cent from last year, according to the Canada Mortgage Housing Corporation (CMHC). Year-to-date, housing starts tumbled about eight per cent, with 850 units.
A Year of Recovery?
In the pandemic-era years of 2020 and 2021, the Niagara real estate market was in a sizzling phase. In 2022, it was a year of transition. What will 2023 be? Industry experts suggest that it will be a “year of recovery.”
Speaking in an interview with the St. Catharines Standard earlier this year, the NAR board of directors president explained that the housing market is stabilizing and levelling out, which is good news for the Niagara region.
“This is better. This is a little more relaxed, a little cautious,” said Layton. “It’s just a different space. I feel people now are more optimistic; they’re feeling better.”
For both buyers and sellers, it is a relief to return to some semblance of normalcy after a couple of years of frenzy.
“This was supposed to be fun. Buying a house is a good thing. People worked hard,” she told the newspaper. “Most of the sellers I sat with in the last two years were feeling bad for those who didn’t get their house. And we’re breaking hearts every day with buyers. So now we’re into a more stable, more fair space where people can live the Canadian dream.”
A look at the RE/MAX 2023 Canadian Housing Market Outlook shows that the Niagara real estate industry is seeing decent conditions this year, with the sales price expected to rise three per cent and unit sales forecast to drop eight per cent.
Indeed, like the rest of the Canadian real estate market, how Niagara performs during the typically busying spring buying season could set the tone for the area for the rest of the year.