Lakelands Association of REALTORS® MLS® home sales remain Below Average as Rising Interest Rates Impact Affordability
"Many housing markets in the province and across the country are experiencing sustained downturns in activity and ours was no exception in August," said Chuck Murney, President of the Lakelands Association of REALTORS®. "Supply levels are moving up from record lows and prices are pulling back from their peak earlier this spring, trends that we expect will continue through the end of the year, since we have at least one more rate hike on the horizon. Once interest rates have stabilized there will likely be a period of adjustment where buyers and sellers reassess their positions on affordability and pricing expectations, respectively. The housing market is expected to be in transition for some time while all of this is going on."
Residential (Non-Waterfront) Synopsis
Residential (non-waterfront) sales activity recorded through the MLS® System for the Lakelands region totaled 355 units in August 2022. This was a substantial reduction of 41% from the same period in 2021 and sits 39% below bothe the five-year and 10-year averages for the month of August.
The median price for residential (non-waterfront) property "sales" in August 2022 was up modestly (1.3%) from August 2021. Though the more comprehensive year-to-date median price still shows an increase of 14.9% over the first eight months of 2021 it is important to note that the slowdown in sales and the increase in interest rates will have an effect on year-over-year values as we move into the latter half of 2022.
Waterfront Synopsis
Sales of waterfront properties numbered 141 units in August 2022. This was a substantial reduction of 44% from the same period in 2021, sitting 42% below the five-year and 10-year average for the month of August.
The median price for waterfront property sales in August 2022 was down modestly (-3.8%) from August 2021. The more comprehensive year-to-date waterfront median price shows an increase of 13.3% from the first eight months of 2021. This can be attributed to the strong sales over the latter half of 2021 and first few months of 2022 with the same expected trend as suggested in the residential market stated above.
Overall Synopsis
The real estate market through Parry Sound and Muskoka is seeing a lot of the same pressures seen to the south. The difference here is that the reduced inventory of homes is having less of an effect on value due to supply vs. demand.
Residential home values will continue to remain fairly stable through smaller communities where low inventory will be a factor. Larger communities should continue to see some level of drop in value with more choice for buyers and greater effect from city centres to the south.
As the cottage market winds down, cottage sellers are holding strong on their prices - gambling on the long term market and looking towards spring 2023 in hopes that it will be a more favourable market. As such, I expect that we will see more expired cottages in the fall than your typical year.
Cheers, Chuck.
