In the ever-evolving landscape of the Canadian housing market, staying informed about current trends and predictions is crucial for both buyers and sellers.
As we look ahead to the rest of 2024, it’s essential to understand the nuances of your local housing market to make informed decisions.
Let’s take a closer look at what to expect this year and how you can navigate through the dynamic realm of real estate.
Housing Market Predictions and Forecast for 2024
The housing market forecast for 2024 is characterized by cautious optimism. While challenges such as inflation, rising interest rates, supply chain disruptions, and changing buyer preferences continue to influence the market, there are still several factors pointing towards stability and gradual growth.
There is hope for a balanced market as the high interest rates seem to have reached their peak, which would lead to increased housing supply and more accessible and modest home prices.
Supply and Demand
Supply, demand, and housing inventory are key factors that can influence the Canadian real estate market and home prices.
As we look ahead to spring and summer, we will likely see an increase in housing demand and home sales which is typical of the seasons.
Increased demand, paired with the lingering possibility of dropping interest rates, means that buyer demand might increase among home buyers. “However, there are expectations that more sellers will come out of the woodwork after waiting on the sidelines the past while,” says True North Mortgage.
Interest Rates and the Housing Market in 2024
Interest rates remain a significant factor influencing the real estate market, housing prices, and number of home sales.
Despite recent fluctuations, mortgage rates are expected to hover around historically high rates, but there is hope that the Bank of Canada will start to lower the rates to stimulate economic growth through buying, borrowing, and increased consumer spending.
However, high interest rates do not entice first time homebuyers and prospective buyers to make their move. Rather, many are opting to stay where they are amidst these economic uncertainties and wait until there is a modest decline in sale prices and interest rates.
While the fear of a housing market crash has spooked potential buyers and would-be buyers during the housing recession, a crash is not on the horizon for 2024. Rather, real estate agents and professionals actually predict that the Canadian housing markets will see some recovery throughout the year, leading to a more balanced housing market.
Residential Real Estate Stats (2023)
To gain insight into the current state of the real estate industry and the local market, let’s review some key statistics from the Canadian Real Estate Association (CREA) for the year 2023:
- The average price of residential homes in Canada in 2023 was $678,282
- The average price of homes across the provinces ranged from $297, 481 in New Brunswick to $971,152 in British Columbia.
- High interest rates and high inflation slowed housing market activity as existing homeowners had historically high mortgage payments.
- There were 443,511 sales in 2023 which is a bit down from 2022’s 498,958 and even more than 2021’s 666,319 sales.
- The average price for a minimum down payment (5%) was at $41,000
Will the Housing Market Recover in 2024?
While the real estate market has shown resilience in the face of adversity, the question remains: will it fully recover in 2024? While a complete return to pre-pandemic norms may not be immediate, gradual improvements are expected across various indicators.
Factors such as economic stimulus measures and easing supply chain disruptions will contribute to a more stable housing market environment.
However, uncertainties surrounding geopolitical events, population growth, homelessness, inflationary pressures, and interest rate movements could introduce volatility and impact the pace of recovery.
On the other hand, home prices are set to increase from 2023 with “the national average home price [expecting] to climb 2.3% on an annual basis to $694,173 in 2024.”
“The market has been showing some early signs of life over the last couple of months, probably no surprise given how much pent-up demand is out there,” said Larry Cerqua, Chair of CREA. “There’s a consensus that the market will probably look quite a bit different this year compared to 2022 and 2023, so if you’re hoping to buy or sell a property in 2024, contact a REALTOR® in your area and get your game plan ready today,” continued Cerqua.
Is It a Good Time to Buy a House?
For prospective homebuyers, determining the right time to enter the market can be challenging. While timing the market perfectly is nearly impossible, here are some factors to take into consideration as you determine what move is best for you:
- Mortgage Rates: While we reached historically high interest rates in 2023, experts do suggest that the Bank of Canada will start to lower these rates to encourage economic activity and to move out of a recession. As rates hopefully decrease, it might be a good time to break into your local market.
- Increased Inventory: While inventory levels remain constrained in some areas, gradual improvements are expected as sellers gain confidence in the market
- Buyer-Friendly Market: Softening competition and negotiating power shifting towards first time buyers and potential buyers create opportunities to secure favorable deals and terms.
What is a Seller’s market?
A seller’s market is characterized by extremely high demand from buyers leading to bidding wars and homes selling for over the asking price or list price.
One example of a seller’s market was in 2020-2021 when homes were selling for sometimes double the asking price and buyers were scrambling to make a deal with a seller. Homes were selling extremely fast, sometimes only lasting a day on the market. This led to home price growth across the country.
What is a Buyer’s market?
On the other hand, a buyer’s market is characterized by high inventory and lower demand from buyers. Because buyers have the “power,” homes often sell for lower than the asking price or with more terms and conditions. After the seller’s market in 2020-21, we’ve moved towards more of a buyer’s market in the past few years and throughout 2023.
Final Tips for Buying in Today’s Real Estate Market
Navigating the real estate market requires careful consideration and strategic planning. Whether you’re a first-time buyer or seasoned investor, here are some final tips to help you succeed in today’s dynamic environment:
- Define Your Priorities: Clearly outline your needs, preferences, and financial goals to guide your home search and decision-making process. Be sure to set your budget and understand your non-negotiables.
- Work with a Professional: Partnering with a knowledgeable real estate agent can provide valuable insights, expertise, and support throughout the buying journey. Other professionals include mortgage brokers, real estate investors, accountants, and financial advisors.
- Be Flexible: Remain open to exploring existing homes in different neighborhoods, property types, and financing options to maximize your chances of finding the right home.
- Conduct Due Diligence: Thoroughly research market trends, existing home sales, property values, home prices, and potential risks to make informed decisions and avoid costly mistakes.
- Plan for the Long Term: Consider the long-term implications of your investment and assess factors such as resale potential, neighborhood development, and future market dynamics.
Voortman Realty
Navigating home prices, inflation, markets, and building home equity can seem daunting. At Voortman Realty, we pride ourselves on working closely with our clients to ensure they put their best foot forward when navigating real estate transactions – whether it’s buying, selling, renting, or investing.
If you’re looking to break into the market and want to work with a team of professional realtors, Voortman Realty is here!
Contact us today to see how we can help you find your dream home!