August is usually a month when things slow down in the local real estate market as people get out and enjoy our best month of the year. However, this August defied that trend. The graphs attached are reminiscent of 2006 when the market just never slowed down and pushed through the normal bell curve of annual real estate sales trends. The key fall market indicator in the attached graphs is the supply side of what happened in August. A number of factors are driving our local market conditions: the key ones being: 1) Many current homeowners are staying put as they can’t afford to sell and move given mortgage rate increases and the cost of financing thus restricting the supply of resale homes. 2) New construction costs are extremely volatile and many builders are being very cautious about commiting to new builds and are often having to hold decisions to secure quotes and nail down costs. Thus we have a shortage of new homes, townhomes, and apartments. 3) Labour shortages are driving up new construction costs and timelines for project completions as well as how many projects can be taken on. 4) We are still seeing a good deal of net migration to the province as it remains relatively affordable vs many other areas of Canada.
Without a dramatic increase in new construction and some creative ways for current home-owners to purchase them, we will continue to have a shortage of preowned properties in our region. I had thought we might be peaking after July, but August trends tell a different story. The fall market is usually much stronger than the summer market. Stay tuned.
