We are now in one of the strangest housing markets ever experienced. Still experiencing the effects of Covid and coming off one of the highest spending years in Consumer history in 2021 we are now facing record inflation. Supply lines to the end user are still recovering their momentum and the Bank of Canada is pushing to 3.5% lending rates to the Big Banks. 

Americans are not affected the same as Canadians as they have 30-year locked in mortgages.  We only have 5-year lock ins and are therefore impacted much more.

Ukraine has the second largest reserve of gas and oil compared to Russia. Thus, the war in Ukraine.  Russia already took Croatia with supplies 50% of the Neon Gas used in the world’s semiconductor production.  We therefore have rising gas and oil prices which also drives inflation.  Inflation runs 6 months behind an economy’s performance.  That is why there is a fear of recession worldwide next year.

What does this mean for the future of the housing market across our region? Back in 2017 the Government introduced the ability of immigrants to work in Canada while attending programs in our trade schools and universities and the ability to seek full time employment in Canada and stay upon graduation.  In 2021 the USA which is 10 times our size had 600,000 immigrants.  We had 500,000. 

The Ford Government announced they are going encourage building of new homes over the next 10 years. That does not solve today shortages in available new homes and rental accommodation. Rental accommodation across Ontario is up over 16% versus a year ago. Rental accommodation is virtually impossible to find.  Where all these new immigrants and growing family going to live?

Right now, people are hanging on to what they have, due to fear in the uncertain market.  Unemployment is predicted to rise next year.

Once the smoke clears housing prices will start to rise again to fill the real need.

What Should Buyers and Sellers Do?

In other words, my message to first time home buyers is BUY NOW!  There are no bidding wars, and the average selling price has moved below 100% of asking with the appropriate conditions to protect you the Buyer.  If you wait, prices will go up and offers will be harder to get any breaks on.

Move-up Buyers should sell first with an “Experienced Realtor” who will analyze the selling environment and maybe not get what you thought you’d get, but then you will be able to go alone into a purchase situation, without bidding wars, and negotiate the purchase price and conditions for what you need.

This is not the time to liquidate. Prices across oxford County are still above July 2021.

The Market Activity:

The average price of a Home in Oxford County fell to $637,634. This was the second time this year that the average price fell below $700,000. May was the other month at $696,389.  The average price in July last year in a bidding war environment was $610,420.

It is also important to understand what is selling across the County in July 2022 by selling price.

Sales have slowed dramatically to the slowest in history for the time.  Demand is pent up, but people are fearfully waiting to see what the future holds.  Oxford County averages 200 sales per month year in year out.  In July last year 201 homes sold. In July 2022 we saw Buyers only purchase 100 homes across the county. Only January 2021, historically the slowest month of the year, had less sales at 91 homes

The movement has erratic this year with June not being the historically biggest home sales month, as in the past.  The slowdown started in April this year with the first of the interest rate raises.

It had now jumped to 26 days to sell the average home.  This is a significant slowdown from even the previous 3 slower months, April 11 days, May 15 days, and June 18 days.  This slowdown in market activity moved Oxford County into a balanced market, with 6 months of supply. Negotiations are now common without bidding wars occurring. The average home is now selling at 97.8% of asking price. This will not last forever and even in June price wars were occurring but to a lesser degree.

The chart below will help you understand where the negotiations are taking place. The $400,000 to $500,000 price range is the most competitive.