In winter, it seemed like houses in our neighbourhood were selling as soon as the sign went up. Now that the weather is nicer, some listings seem to be hanging around longer. Is this backwards, or is it just me? – INTERESTED NEIGHBOUR
DEAR NEIGHBOUR: Are properties lingering these days? Yes and no. You are correct in recognizing that sales tend to slow in winter and pick up in spring. This pattern is typical in a balanced market, but our region has been off-balance since 2016 and feels especially skewed right now.
Kitchener-Waterloo has long been a seller’s market, which means we have a large pool of buyers and a limited number of listings. Locally, buyer demand has been outpacing supply for years, and a normal drop in listings over the winter season only amplified the problem.
Inventory tends to be lowest in December, January and February, since most sellers don’t want to list when the weather is lousy. Winter movers tend to be first-time buyers (who enter the market when they have sufficient down payment and bank approval, regardless of the season) and people driven by circumstance (such as death, divorce, or job change). Locally, our inventory was already limited early in the year, so even this small group of buyers had a hard time finding homes. Kitchener-Waterloo was averaging fewer than 200 listings on any given day at that time, and in January hit a low point of only 131 homes for sale. Our shelves had been quite bare for a long time, and at the start of this year, they were pretty much empty.
Now that spring has sprung, more homeowners are thinking about moving, which is completely expected. As of the end of March, K-W had almost tripled its inventory from eight weeks ago. The influx of new listings hasn’t fixed the supply problem, and it won’t, since new buyers are entering the market at the same time. Our inventory shortage is ongoing, hovering at just under 400 listings (and counting) on any given day — but overall, conditions are calming down ever so slightly.
So, to answer your question, yes — it does feel like some listings are hanging around a little longer, but only because the demand was so intense previously.
From here it’s full steam ahead for sellers, keeping in mind that a home probably won’t sell if you overreach on the list price. Buyers may want to take a deep breath, pump the brakes just a bit, and give inventory levels a chance to rebuild. I don’t expect the market to balance any time soon, but do predict the next few months will bring more selection, a little less pressure, and perhaps a return to the days of multiple offers with a handful of buyers, instead of a crowd.
PRO TIP: To get a feel for how our market is doing, imagine you’re travelling on Highway 401. A balanced market is like cruising at a comfortable 110 kilometers per hour (yes, I know the limit is 100). We floored it at 150 kilometers per hour this past winter, and currently, we’re still coming in hot at 130. #AskDavid #Advice