Thu. Jul 18th, 2024

Home Sales Dip in April Despite Spring Listings Uptick: CREA

he Canadian Real Estate Association (CREA) reports that the number of homes sold in April decreased compared to the previous month, despite an increase in new listings hitting the market.

According to CREA data, home sales in April fell 1.7% on a month-over-month basis, while newly listed properties rose 2.8%, marking the start of the spring market. The average home price in April was $703,446, down 1.8% from the same month last year.

Home sales were up 10.1% compared to April 2023, a gain largely attributed to the early Easter long weekend, with Good Friday and Easter falling on March 29 and March 31 this year compared to April 7 and 9 last year.

CREA’s senior economist Shaun Cathcart highlighted the contrasting conditions between this spring and the previous year. “April 2023 saw a surge of buyers re-entering a market with new listings at 20-year lows, whereas this spring has presented a healthier number of properties but less enthusiasm on the demand side,” Cathcart said.

The influx of new listings and slower monthly sales resulted in a 6.5% increase in the total number of properties on the market, the second-largest month-over-month gain on record. The national housing market now has the highest inventory levels since just before the COVID-19 pandemic, with 4.2 months of inventory at the end of April, compared to 3.9 months at the end of March. The long-term average is about five months of inventory.

Jason Ralph, broker of record for Royal LePage Team Realty in Ottawa, noted that local inventory levels in his market are not as high as the national figures. He emphasized that balanced market conditions are giving buyers more negotiating power. “Balanced markets tend to be a place where buyers can have conditions like home inspections and financing conditions,” Ralph said. “We consider it a fair market where neither buyers nor sellers have an advantage.”

Ralph also mentioned that now is a good time to buy, despite some buyers remaining cautious about potential interest rate cuts from the Bank of Canada. “There are some buyers on the sidelines waiting for that positive news release with the interest rate drop, but I see more buyers coming out of the woodwork,” Ralph added. “We’ve had a pretty strong start to the year compared to last year, and I think people are becoming more comfortable with the rates we will be dealing with.”

In related news, Canada Mortgage and Housing Corp. (CMHC) released data on housing starts for April, showing a 1% decrease in the annual pace of starts compared to March. The drop was primarily due to flatlined starts in urban centres, with challenging borrowing conditions from last year contributing to the downward trend.

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