“Canada's housing bubble has vanished without a 'crash landing', say economists”
That was a recent headline in the financial post (read the article here)
Many were convinced that the strong housing market was nothing more than a bubble, ready to burst at anytime - the reality could not be further from the truth.
Brantford is experiencing similar conditions to the GTA, although much less dramatic. There has been a summer cool-down for a variety of reasons (read more on that below) and fundamentally the market is still very healthy with low inventory and high demand. Inventory levels have dropped 18% in the past month after an increasing for three months. This is a leading indicator that we are heading into a strong fall market.
How We Got To Here:
Incredibly low inventory at the end of 2016 is what fuelled a record winter-to-spring market unlike anything Brantford had ever experienced previously. [1 on the chart].
Line-ups of buyers and ‘bazooka offers’ (our term for offers way over-asking and with no conditions) were the norm, with 90% of homes selling for asking price or more, and the median days to sell was only 8 days. We knew however, that these conditions could not last forever.
Three factors combined to trigger a cool-off in late May and early June [2 on the chart]:
- the government introduced legislation to intentionally cool off the market,
- an unseasonably high number of homes were put on the market in May/June,
- and the summer months bring a seasonal slow-down every year
Unfortunately during this summer slow-down some sellers were forced to discount their prices to get their properties sold.
Sellers who were patient through the summer are already being rewarded as activity is picking back up and buyers are returning with strong offers. Our team is seeing much more showing activity the last couple of weeks and multiple offers on properties are happing more regularly again.
Proof that the bubble didn’t burst is evident when you see that even after this slight pull-back over the summer, the median sale price is still up 25% over 2016.
Inventory levels dropped 18% in August after growing for three months, and the number of homes coming on the market has declined for two consecutive months.
If inventory levels continue to decline through September we will be right back to where we were at the very end of 2016 when the market took off like a rocket. [3 on the chart above]
With market conditions changing quickly (and potentially tens of thousands of dollars at stake) your best asset is an experienced, local, trusted REALTOR®. Our team understands this market better than anyone.
Before you start viewing houses, or getting your home for sale - call us for a complimentary move consultation (buy or sell) and we’ll create a custom plan to meet your goals.
Scroll Down For An Even Deep Look Into Our Market
Price Points, Neighbourhoods, and Investment Properties
A Deeper Look….
There was a large increase in new homes coming on the market (grey line) in May. Thiscombined with a slowdown in the overall GTA created the same conditions in our local market. Since May, the number of new listings coming on the market has retreated, and now in August, inventory level are reflecting this.
The gap between supply and demand is closing and once again inventory levels are dropping. These are the exact same conditions that caused the excitement of the spring real estate market earlier this year. Get ready for these conditions to return in the next 30-60 days!
The median price of a home in Brantford is up 25% this year from an additional 12% last year. In The past 20 months the median price of a Brantford home has risen from $255,000 to $357,500. If you have owned a home during this time congratulations- you’re $100,000 richer!
Home sellers should feel confident in listing their homes in August-October. However, have a careful look at your competition and your goals (both sale price and how quickly you want to sell), and create a plan to maximize your chances at winning.
Buyers still have a brief window to pickup a deal as some sellers have been pinched in this temporary slowdown. In the past 30 days 30% of homes have sold at full price or better. Not bad for a “slow-down”.
Comparing Different Price Points
Home sales considered to be in the entry level market (homes under $300,000) have still been performing well over the summer months as demand for homes in this price range has stayed strong during the summer months. With new listing inventory decreasing since a peak in May, we expect “hot” conditions to return very shortly.
The temporary slowdown has had more of an influence on the mid-level market. New listings increased significantly in May and June then dropped off significantly in July. The mid-level market is running about a month behind the entry level market, and we expect conditions to improve significantly come September during the fall market.
The luxury market is the most interesting to look at. Less than two years ago we would have called anything over $450,000 “luxury” in Brantford. With the recent acceleration in the average home price we have adjusted our price brackets, and we now consider over $600k to be the high-end of homes here in Brantford. What is interesting here is the sudden drop-off of buyers (red line) in July. Many of the luxury homes in Brantford were being purchased by buyers new to Brantford, and when the GTA market slowed after the spring those higher end Brantford homes felt the effect first. As confidence returns to the Greater Golden Horseshoe real estate market the energy in the Brantford luxury market will return also.
Brantford is made up of several smaller sub-markets based on geography. To highlight the differences we have compared the same sale data for the collective “North End” neighbourhoods and also the sprawling master-planned community of West Brant, where most the the new construction has been and continues to be.
Notice how in the north end neighbourhoods the supply and demand lines are converging again along with inventory levelling off over the past three months. This is a sign of a hot market returning! In west brant there remains a large gap between supply and demand, and inventory remains high in August. This neighbourhood will be slower to return to the bidding wars we saw in the spring market.
The Residential Investment Market
The residential investment market (includes duplex, tri-plex, 4-plex, and rooming houses) has been the least effected by wild swings of the spring and summer market of 2017. Supply, demand, and inventory have remained relativity consistent over the past 12 months.
The Brantford real estate market is moving and changing quickly. Your best asset is an experienced local Realtor who understands your goals and works in this market everyday. Our team has helped over 150 family navigate this market in the past 18 months and we currently are accepting new clients for fall and winter moves. Call our team today to speak with a professional about your plans 226-920-8080