The Bibby Group | March 2022 Newsletter
As fears of rising interest rates—coupled with low supply—brought buyers out in droves throughout February, early first-quarter indicators showed that our downtown marketplace market was on pace for yet another record-setting year. By the third week of February, however, that feeling began to dissipate.
Recent sales have remained strong, yet results have varied from listing to listing. For example, depending on the week, we have seen minor fluctuations in the number of showings on certain properties, while some properties have failed to sell on offer night. As I write this, however, it appears that last week’s slower pace has mobilized buyers who may have been repelled or frustrated by the conditions in February.
One of the logical factors for these inconsistent outcomes could be increasing supply. Attractive early-February results prompted many who were waiting until spring to list their properties earlier than anticipated. As a result, some pockets witnessed slightly more supply than weeks past, thereby dispersing the pool of buyers into different directions. And since sellers aren’t willing to sell for less than their neighbour a week earlier, we are witnessing moments of inconsistency and minor fluctuations—proving it is indeed impossible to time a peak marketplace due to many external factors.
While any market cooling will be a welcome reprieve for buyers, another factor to watch is the Bank of Canada, which just raised interest rates for the first time since 2018. Low rates have undoubtedly poured fuel on our housing market; a series of rate hikes throughout the year may restore some order to the frenzied activity and temper the consequent skyrocketing prices we have witnessed. While the move was necessary, we may see fringe buyers on the cusp of being priced out, unfortunately.
Additional factors we must consider moving forward this spring include global economic consequences arising from the ongoing war in Ukraine, a softening stock market (which has made some buyers question their purchasing power), and, of course, inflation. The concern for most consumers and agents has been the sustainability of the current pace of price appreciation, which continues to defy all expectations. If history is any guide, this pace is unlikely to continue indefinitely.
Depending on the asset class, downsizers and affluent buyers may prove to be unaffected or indifferent and focus on lifestyle objectives rather than budget. In my opinion, March will be one of the most important and meaningful months to track. As always, I’m looking forward to fielding your questions or concerns in the coming weeks and will be in touch next month!