Mid-autumn Halifax market update

It’s time for the latest Halifax market update! As we continue to move through autumn, we are seeing some big differences in the real estate market compared to earlier this year. Buyers and sellers’ positions have changed somewhat, as have the options for current home owners. Housing prices, supply, and demand have all shifted as well. Here’s what’s going on in the market at this point in the season.

What’s new with supply and demand?

Let’s start by diving into the current supply and demand trends. According to the Nova Scotia Association of Realtors, 389 homes sold in the Halifax-Dartmouth region in September 2022, a 34.5 per cent decrease from September 2021. For the year so far, our region has seen 4687 sales, a 24.8 per cent yearly drop. Is the drop in sales due to lack of buyers or lack of inventory? 

For the most part, a drop in demand is causing a cooldown in the market. As interest rates have steadily climbed this year, many buyers put their plans on hold until rate hikes have stopped. With fewer buyers and less demand, of course, fewer properties have been selling, leaving inventory to sit longer on the market. As we’ll detail below, prices have been sinking as a result. Halifax is coming down from the seller’s market it experienced for much of 2020, 2021, and even earlier this year. This means buyers are generally in a better position to make a move than they were one year ago.

Housing prices update

The average price of a home in Halifax came in at $496,000 in September. This is a decrease from the April high of over $600,000, according to a Halifax Real Estate News report from the Andrew Perkins Real Estate Team. Basically, housing prices are slipping. This is also largely due to the Bank of Canada’s rate hikes. With fewer buyers on the market, homes have been less valuable and sellers have been settling for lower offers. Buyers have been in a better place for price negotiations. When rate hikes stop and more buyers come out to purchase again, we are likely to see housing prices increase, but for now they are on the decline.

Options for buyers

Buyers in today’s market are in a better position today than they were one year ago. With housing prices decreasing, a potential buyer’s budget will leave them with more options and purchasing power. Higher inventory also means more selection in properties. The bottom line here is sellers have less power over buyers and will be more open to negotiations to sell their home. However, buyers will have to work with rate hikes, which is the main reason the housing market is opening up. With an overnight rate of (update on Oct.26), borrowing is more expensive these days, meaning monthly mortgage payments will be higher as well. Buyers must be sure they have the finances to support a bigger monthly payment, even if they are able to enjoy a lower sale price of the home they purchase. If you’re unsure whether you should hop into the market or hold on for now, you can contact a broker to discuss your options.

Options for sellers

There’s no denying that selling has become a bit of a longer process than it was at the start of this year. Homes were selling at an unbelievable pace with unimaginable prices when we entered 2022, so it’s not a huge surprise that things eventually settled down once the Bank of Canada intervened. These days, sellers are more likely to spend a longer amount of time on the market, and are bound to receive fewer and lower offers. That doesn’t mean you can’t get a good sale on your home, but you can’t expect to have quite the same hold over buyers. You might be wondering if you should list your property right now, or if you should wait until rate increases settle down and demand picks up. We aren’t quite sure when this will happen, and the risk of a recession in 2023 could hurt potential sales once again. We most likely won’t recapture the market conditions we had last year, but each situation is different, so the decision to list or wait depends on your needs.

And what about current home owners?

Finally, where do home owners fall in this Halifax market update? If you have a variable-rate mortgage, you have experienced increases to your monthly payments, and you may be wondering if you should make a switch. We understand that dealing with rate hikes has been stressful, but in many cases we still recommend hanging onto a variable product. This blog post discusses how to manage mortgage payments without converting. Some suggestions in this post include altering your amortization schedule, or your payment structure, to benefit you. If you have different mortgage concerns, like your current rate or lender, a refinance could still be an option. Reaching out to a broker will help you understand your choices.

This Halifax market update highlights the fact that sellers no longer have complete control over the housing market, and buyers are gaining more power. However, interest rates are still posing a challenge for many buyers, and for current home owners as well. Reaching out to a mortgage broker is one of the best ways to understand how the current market affects you, and whether you should make any changes.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.