Market Update (November 2017)
We’re back with the market review for October 2017. Again, these stats were pulled from DRAR which is the Durham Region Association of Realtors, and are an accurate depiction of the Real Estate market in the Durham Region.
- There were a reported 845 sales transactions in the month of October.
This is down 23% from the same time last year in Oct 2016; however it is a slight increase on the previous month in Sep 2017.
We know there are less sales going on, this impacts sellers as buyers have more choice and wiggle room with negotiation price.
Year over year we continue to see an increase of average selling price (ASP).
The ASP in Oct was $575,602. This is slightly down on Sep 17 of $578,666 but 2% more than ASP of Oct 16.
Experts say Durham Region offers the best value of Real Estate in the GTA. Buyers benefit from a more relaxed market, without multiple offers while sellers experience an increase in their homes value over previous years.
An important statistic we should look at is Months of Inventory (MOI). This is found by calculating
➢ Active listings divided by sales
MOI is one of the most important numbers in real estate because it shows supply and demand and dictates whether prices will increase or decrease. If we are in a market experiencing 6 months of inventory, prices will decrease – this would be known is known as a buyers markets as there is more choice for buyers and less competition.
Below 6 months of inventory, prices will increase with multiple offers being more common and less time to think for a buyer, which is known as a seller’s market.
Around 2-3 months of inventory is ideal as it is a more balanced market. In October there was 1912 active listing and this divided by sales of 845 gives an inventory of 2.3, so we are looking at a really healthy market right now in Durham.
We should also quickly talk about the new mortgage rules coming into effect in the New Year from OSFI, which is the Office of the Superintendent of Financial Institutions.
OSFI is setting a new minimum qualifying rate, or “stress test” for uninsured mortgages. The rules would require the minimum qualifying rate for uninsured mortgages to be the greater of the five-year benchmark rate published by the Bank of Canada (presently at 4.89%) or 200 basis points above the mortgage holder’s contractual mortgage rate. The main effect will be felt by fist time buyers, as no matter how much money they put down as a down payment, they will have to pass the stress test. However, I believe the new stress testing prevents people from buying homes that in a year or 2 years time they will be unable to afford if the Bank of Canada were to increase they key interest rate again. So, this stress testing is actually protecting people in many ways from future loss. The stress testing gives buyers the reassurance that they are, in fact making an economically wise decision to buy the homes they want.
Now remember, if you have any real estate enquiries or need some guidance The Michael Baird Team is always here for you. You can contact me directly on 905-242-2716.