July 2022 Numbers

July 2022 Numbers

  • Maria Brooks
  • 08/25/22
July market stats deliver expected results with some outliers.
 
With sales declining over 47% yr/yr we can no longer associate this cooling period with the typical summer calm.  Across all property types in all Treb zones, this is the lowest amount of sale activity reported during the month of July for the past 10 years.  
 
How unexpected is this cooling and what zones are the most responsible?  
 
Sales activity across the board are still within the 5 year average, if you count the last 5 years being worthy of the term average.  Lets take a look
 
The 2017 rapid price rise cooled by end of spring as we introduced more difficult lending strategies.  These strategies flattened the market for a period. The market was beginning to recover as 2018 drew to a close. 
 
2019 was our most confident year and optimism in the market really began to take hold. 
 
We flew into 2020 with anticipation until the market froze from March- June.  Come July the mounting pressure and dissastisfaction of our make-shift work spaces drove many back to the market to look for any solution at any price. That pressure in July continued to mount as we saw no relief from Covid and our current living situations.  
 
So can we really use that last 5 years as an accurate measure of normal growth? 
 
Average prices, albeit minutely, are still showing a 1.2% increase yr/yr.  The only asset class under performing with negative yr/yr growth is the detach market, but why? In July 2021 42 homes over 3.5M transacted.  In July 2022 only 14 homes transacted, a decline of 66.7%.  And, it gets curiouser and curiouser.  C12, an area that represents probably the largest congregation of luxury homes, saw a disproportionate slow down in the sales, from 24 in July 2021 to 1 in July 2022.  When removing C12 from the average stats, the decline in single family homes becomes less bleak. 
 
Other areas in TRREB Zones that slowed between 2.25M-3.49M and 3.5M + are C04, C14, C15, W01 and W07.  The cooling off of the luxury market is interesting indeed and may  represent a hesitation for buyers to increase their debt loads.  Their low confidence is echoed throughout the market as hesitation limits inventory and cools the market on all levels. 
 
Condos have cooled month/month but are still experiencing relatively healthy yearly increases. +4.3% yr/yr , down from March highs of 10.6%. The condo market may come out unscathed as the red hot rental market is keeping the investors interested in this asset class.  
 
At the end of the day supply/demand of the fall market will likely dictate the length of the market correction and although interest rates are expected to rise again a 5-6% rate is relatively normal.  

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