Canadian Home Prices See Sudden End to Declines in Advance of Spring Market
Ottawa, ON March 18, 2024 – Canadian home prices as measured by the seasonally adjusted Aggregate Composite MLS® Home Price Index (HPI) were flat on a month-over-month basis in February 2024, ending a streak of five declines that began last fall, according to the latest data from the Canadian Real Estate Association (CREA). The fact that prices were unchanged from January to February was noteworthy given they had dropped 1.3% from December to January. Considering how stable the seasonally adjusted MLS® HPI tends to be, shifts this abrupt are exceedingly rare. (Chart A) There have only been three other times in the last 20 years that have shared a sudden improvement or increase in the month-over-month percentage change from one month to the next of this size; all at various points in the last four years when demand was coming off the sidelines. “It’s looking like February may end up being the last relatively uneventful month of the year as far as the 2024 housing story goes,” said Shaun Cathcart, CREA’s Senior Economist. “With so much demand having piled up on the sidelines, the story will likely be less about the exact timing of interest rate cuts and more about how many homes come up for sale this year.” Highlights: National home sales dipped 3.1% month-over-month in February. Actual (not seasonally adjusted) monthly activity came in 19.7% above February 2023. The number of newly listed properties edged up 1.6% month-over-month. The MLS® Home Price Index (HPI) was flat month-over-month and was up 0.8% year-over-year. The actual (not seasonally adjusted) national average sale price posted a 3.5% year-over-year increase in February. Chart A The actual (not seasonally adjusted) number of transactions came in 19.7% above February 2023. Part of that double-digit gain reflects the fact that February 2023 sales were one of the lowest for that month in the past two decades, but it also reflects the fact that current activity has climbed back to only around 5% below the 10-year average. The number of newly listed homes edged up 1.6% on a month-over-month basis in February. Gains may rise in the months ahead depending on how many owners are preparing to list their properties for sale this spring. “After two years of mostly quiet resale housing activity there’s a feeling that things are about to pick up,” said Larry Cerqua, Chair of CREA. “At this point, it’s hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they’re just waiting for the spring listings to hit the market. Either way, neither of those are likely too far off, so if you’re hoping to buy or sell a property in 2024, contact a REALTOR® in your area today,” continued Cerqua. Chart B With sales edging down and new listings inching up in February, the national sales-to-new listings ratio eased a bit to 55.6%. The long-term average for the national sales-to-new listings ratio is 55%. A sales-to-new listings ratio between 45% and 65% is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets respectively. There were 3.8 months of inventory on a national basis at the end of February 2024, up a touch from 3.7 months at the end of January. The long-term average is about five months of inventory. Home sales activity recorded over Canadian MLS® Systems dipped 3.1% between January and February 2024, giving back some of the cumulative 12.7% increase in activity recorded in December 2023 and January 2024. That said, the general trend has been somewhat higher levels of activity over the last three months compared to a quiet fall market in 2023. (Chart B) The actual (not seasonally adjusted) national average home price was $685,809 in February 2024, up 3.5% from February 2023.
How to Buy A Home in 9 Steps
Buying a home is an exciting milestone, but it can also be a complex process. Whether you're a first-time home buyer or an experienced investor, it's essential to have a clear understanding of the steps involved to make a successful purchase. In this blog post, we'll guide you through the nine essential steps to buying a home in Saskatoon, Canada.1. Determine your budget: Before you begin your home search, it's crucial to assess your financial situation and determine how much you can afford. Consider factors such as your income, credit score, and any existing debts. This evaluation will help you establish a realistic budget and avoid overstretching yourself financially.2. Get pre-approved for a mortgage: Once you've set your budget, it's recommended to get pre-approved for a mortgage. This process involves contacting lenders who will assess your financial situation and provide an estimate of the loan amount you qualify for. Being pre-approved will strengthen your negotiating power and show sellers that you are a serious buyer.3. Find a real estate agent: Working with a qualified real estate agent who specializes in the Saskatoon area is invaluable. They have extensive knowledge of the local market, access to exclusive listings, and the expertise to guide you through the buying process. Look for an agent with excellent communication skills, a solid track record, and a deep understanding of your needs.4. Start your home search: Armed with your budget and a trusted agent, it's time to begin the exciting part – searching for your dream home. Discuss your preferences, such as location, size, amenities, and any specific requirements, with your agent. They will use their resources to compile a list of suitable properties that match your criteria.5. Visit potential properties: Once you receive a list of potential properties, schedule viewings with your real estate agent. This step is crucial to get a firsthand look at the properties, assess their condition, and determine whether they meet your expectations. Take note of any maintenance or renovation work that might be necessary to factor into your budget.6. Make an offer: When you find the perfect home, work with your agent to prepare a written offer. Your agent will guide you through this process, ensuring that all necessary details such as the purchase price, financing conditions, and any additional terms are included. Your offer will be presented to the seller, who can either accept, reject, or negotiate the terms.7. Conduct inspections and finalize financing: If your offer is accepted, it's essential to hire a professional home inspector to evaluate the property's condition thoroughly. This step ensures that there are no hidden issues that may affect its value or safety. Simultaneously, you should finalize your mortgage financing, providing all necessary documents to your lender to secure your loan.8. Complete the legal process: Buying a home involves various legal procedures, such as conducting a title search, reviewing contracts, and transferring ownership. It's crucial to work with a real estate lawyer who specializes in property transactions to guide you through this process and ensure a smooth closing.9. Close the deal: Once all the necessary documents and financing are in order, you're ready to close the deal. During the closing, your lawyer will facilitate the transfer of funds, registration of the property, and distribution of legal documents. After the completion of these steps, you'll officially become a homeowner in Saskatoon!Purchasing a home is a significant investment, and it's essential to approach the process with careful planning and guidance. By following these nine steps, you'll be well-prepared to navigate the real estate market in Saskatoon, Canada, and find the perfect home that meets both your needs and your budget. Remember, working with a trusted real estate agent and legal professional is key to a successful and stress-free homebuying experience. Happy house hunting!
