These are definitely interesting times in the real estate world. April inflation numbers actually increased – putting more pressure on the Bank of Canada to perhaps increase- but certainly not decrease interest rates.

Predictions of an upcoming recession continue. Rent pricing continues to go up. And yes, real estate prices are increasing again – for multiple months in a row now.  

While agents in my brokerage service areas outside Centre Wellington, including areas like Guelph and Kitchener Waterloo, I tend to specialize in Centre Wellington. But occasionally a good existing client will ask me to take care of a property sale outside of CW.

I have handled sales in Guelph and KW this past month on behalf of clients. I marketed one property in Guelph where I held offers (i.e., list a house today, set an offer date the following week, with the goal of getting multiple offers). And yes, we ended up with multiple offers and selling $100K over asking.

I did the same thing in KW, with the result being a whopping $175K over asking. So, the larger markets surrounding us have definitely heated up regardless of the mixed messages in the overall economy.

A glut of buyers coming off the sidelines all at once and low inventory are the driving factors here. It’s just interesting to watch how quickly buyer psychology changes. If you have been waiting for the market to bottom out, you may have missed it. Or maybe there is a nasty surprise around the corner. Nobody really knows.   

Here in Centre Wellington, the month to date data I have indicate prices are on trend to average 5.8% higher than April 2023 – keeping in mind April was already up 7.3% over March. While not yet seeing the same level of competitiveness of larger markets around us, clearly Centre Wellington is now seeing a sustained increase in pricing over the past couple of months.

Homes under $800,000 and condos continue to see the greatest activity locally, although I must mention that 30% of recent sales have been over $1 million, so as predicted last month, this part of the market is slowly coming to life. 

The number of new listings and sales, while picking up, are still down significantly year over year – although inventory continues to build slowly in our area. This means we have a number of older listings not selling very quickly – mostly over $1 million – leading to an overall buildup of inventory.

If inventory starts to spike, price increases could quickly come to an end. But locally we are not seeing any evidence yet to suggest any distressed or forced sales, or evidence that inventory is about to spike.

There continues to be a level of unpredictability in the market – and if the Bank of Canada unexpectedly increases rates to combat the stubborn inflation numbers – this will not be good for the real estate market.

But for now, more buyers seem to be adapting to the realities of the new market we are in and deciding that while there are unknown risks, it is better to be in the market than out of the market. And for sellers, current market conditions suggest it might be a good time to list. 

As usual, the realtor you hire matters. If you need real estate advice, feel free to call me anytime at 519-766-3716.

Until next month,

Take care,

George