The pace of the market has slowed over the past few months, no question about it. Some of our buyer clients have actually told us they prefer to pause their search while they wait for the market to bottom out.
Many sellers have been making the same decision: let’s wait until real estate has fully stabilized before we make a move.
In combination, these developments have been at least partly to blame for fewer overall transactions month-over-month for almost all segments in Halton region and elsewhere.
Curiously, however, this inaction on the part of sellers is starting to lead to tighter market conditions specifically for the condo apartment segment in Halton region. With more sellers deciding to hold off, fewer condos were available for the buyers who wished to purchase them, driving up prices.
Since condo apartments have become more desirable alongside increasing interest rates, buyers may eventually be back in competition for that condo apartment on their wish list.
Let's take a look at what happened in real estate during the month of October, 2022, in Halton region.
October 2022 Market Results
Condo apartments saw significant price increases in Halton region during October. This while the detached and townhouse segments continued to see price and activity declines during the same period.
Burlington demonstrated the most striking increase at 20.2%, lifting September’s average condo apartment price from $632,656 to October’s $760,697 (TRREB, October 2022).
Oakville saw a similar trajectory during October. The average price of a condo apartment in Oakville during September was $732,306, while October’s average price grew by 12.6% to $824,237 (TRREB, October 2022).
Milton’s increase of 4.6% was less striking, but still significant given the consistent decreases in all other market segments. The average price of a condo apartment during September in Milton was $621,611; by October this had reached $650,000.
Time to sell these units was largely unchanged between September and October for Burlington and Oakville. However, Milton’s pace was a bit faster in October, demonstrating an 11-day drop in days on market since September.
Homes selling more quickly usually results from either increased demand, fewer listings, or both. While October did see some slackening of overall demand, there has also been an interest shift from the more expensive segments, like detached for example, to the less costly option of condo ownership.
First, a single month increase does not a trend make. It’s interesting and worth noting, to be sure, especially given the magnitude of the price increases and the fact that the same scenario is playing out across Halton region. However, until the data is repeated for at least a few consecutive months, the most we can do in the short term is to enjoy the idea that market stabilization could be on the way.
Second, increasing prices of condo apartments month-over-month does not seem to be evident in the other suburbs of the GTA, it appears to be a Halton-only trend. This may be due to the fact that Halton housing prices are already higher than some other suburbs of the GTA, making condo apartments the ideal option for those who wish to live in highly desirable Halton but can no longer afford a townhouse or detached home.
Moreover, it makes sense that the first housing segment to show a positive trend after the correction also happens to be the most affordable: condo apartment.
With interest rates increasing, we’re seeing house hunters show a tendency to ‘buy-down.’ When detached becomes too expensive due to higher interest rates, the next best option is semi-detached or townhouse. For buyers seeking a townhouse that suddenly becomes out of reach, condo apartment is next on the list.
This buy-down tendency seems to be supported by the data in Halton. Detached home pricing between September and October of this year saw an across-the-board dip. Burlington, Milton and Oakville demonstrated a price decrease ranging between 3.7% and 8.9% during that period. (TRREB, October 2022).
The best conclusion from this brief analysis is that there may be reason to be optimistic, in the coming months. Condo apartment owners in Halton who were holding off on selling due to market conditions may decide to reconsider, given the current demand for this segment.
Remember to stay tuned in here for further updates. If you have not yet decided who you would like to work with on the sale of your home, get in touch with us today.***
Toronto Regional Real Estate Board (TRREB). GTA REALTORS® Release October Stats.
Toronto Regional Real Estate Board (TRREB). GTA REALTORS® Release September Stats.