fbpx

2023 Trends + 2024 Predictions

St. John's Market Update with 2023 Summary and 2024 Predictions

St. John’s Metro Real Estate Market Update for Q4 2023 + 2024 Predictions.

St. John’s homeowners and future homeowners, this is your real estate market update from the fourth quarter of 2023, plus an overview of the real estate trends from last year.  And be sure to stay tuned to the end for my 2024 predictions. 

My data is focused on the residential real estate market in St. John’s Metro. This includes St. John’s, CBS, Mount Pearl, Paradise and Eastern Extension Areas.  These Statistics were prepared from data available on January 3nd, from the NLAR’s MLS System. And please note that I am not an economist but I am giving my insights as a realtor on what I see happening in our local market. 

Market Overview

Average Sale Price

Starting off, the AVERAGE SALE PRICE for a residential home in St. John’s Metro was $355,023. This number is up 0.7% from the third quarter of 2023 and up 3.5% from the previous year

And the Average Sale Price for all of 2023 was $346,282, which is higher than it has been in the past 10 years.

Average Sale Price St. John's

Active Listings

There were an average 1444 ACTIVE LISTINGS available each month last quarter.  The number of active listings available for buyers trended down from 121 compared to the previous quarter, but we are trending up by 45 year over year. 

When we look at 2023 as a whole we can see a typical trend happening where active listings increase in the spring and summer months and then begin to decline into the fall. 

Active Listings St. John's

New Listings

There were 1014 NEW RESIDENTIAL LISTINGS  in the third quarter. This number is down from 442 in the third quarter and about the same as this time last year.  

The total number of new residential listings in 2023 was 4,838, which is down 40% from the amount of new listings that we had on the market ten years ago.

New Listings St. John's

Sold Listings

And, there were 748 HOMES SOLD in the third quarter.  This number is down from 239 homes sold the previous quarter and 120 homes sold this time last year.

The total number of homes sold in 2023 was 2960. Although we are down from 2021 and 2022, we are close to what we typically see in St. John’s Metro for the number of homes sold.

Homes Sold St. John's

Months of Supply

When we look at months of supply of homes in St. John’s Metro, right now we have 6 MONTHS OF SUPPLY so we are in between a balanced market and a buyers market. We are up from 5 months of supply in the third quarter and this time last year. Supply is calculated based on how many months it would take for all of the homes currently listed to sell, given the average sales volume.

If we take a look at the ten year history, other than the past couple of years St. John’s Metro has been in a Buyers Market and it looks like we are trending that way again.

Months of Supply History St. John's

Days to sell

If you are wondering how long it’s taking properties to sell? On average in the third quarter it took 50 DAYS FOR A HOME TO SELL  in St. John’s Metro.  We are up from 45 days on market in the third quarter and 45 days on market this time the previous year.

But if we analyze the data a bit further we can see that homes under $400,000 are selling on average in 45 days while it is taking homes $400,000 and above over 57 days.  So the market for those higher end, executive type homes are not moving as quickly. 

And if we compare this year to previous years, homes are not moving as fast as 2022 but are also not sitting on the market for months like we saw in the past.

Average Days to Sell St. John's

List to Sale Price Ratio

And finally, the average LIST-TO-SALE PRICE RATIO was 99.4% in the last quarter. That simply means that on average, properties are selling for just below asking price. 

Interest Rate Update

Currently, for a five year fixed mortgage, interest rates are 5.14% which is down slightly from last quarter.

(Rates provided by Darryl Lane – East Coast Mortgage Brokers.)

Will Interest Rates Drop Soon?

The number one question from 2023 has been will interest rates drop soon? In order to best guess what could happen with interest rates in the future, we need to look at what’s happened to rates in the past. Historically, the direction of inflation leads the way and interest rates have followed suit.  So when inflation is high, interest rates are high.  But when inflation goes down, interest rates have always gone down too.

The Bank of Canada does have a goal to bring INFLATION back down. Currently the inflation rate is about 3%, it was as high as 8% in 2022, and their goal is to bring it down to around 2%. This would lead the way to a lower interest rate, making it much more affordable for you to buy a home. And while it is good news to know that there is a good chance of lower interest rates again, with lower rates comes MORE BUYERS! Which means more housing competition for the limited inventory that we have available.

St. John's Property Tax

And a quick note that the City of St. John’s has increased PROPERTY TAX from 8.3 mills to 9.1 mills.  So now, for every $100,000 of assessed value on your home you pay $910 in property tax. Each municipality has their own property tax rates, however this is something to consider as a cost of being a homeowner.

My Market Trends Insights

So now that we got all the numbers, let’s try to make sense of what happened in St. John’s Metro this past quarter, this past year, and what this may mean as we head into 2024.

  1. Interest rates coming down (but slowly) First of all, while interest rates are predicted to come down over 2024, some economists predict about 75 basis points over the year, my personal prediction is that it may be less than that.  If interest rates drop too quickly it would drive inflation back up into 2025, so I believe that the Bank of Canada is going to take their time to avoid this from happening.  If you are a homeowner and your mortgage is coming up for renewal in the next 4-6 months I strongly advise you to reach out to your bank or mortgage broker today to discuss your options in advance. 
  2. Buying now may be a better long term financial decision. That being said, if you can afford a payment at a higher rate, now may be a good time to buy. Until we see a large increase in the overall supply of homes I predict that home prices would continue to rise in the under $400,000 price bracket in 2024, due to an increase in demand from all the people who held off buying in 2023 waiting for rates to drop.  Think about it this way, in 3 to 4 years, you can lower your interest rate but what you originally paid for the house stays the same. I believe it is a better long term financial decision to adjust your search criteria and shop within your current budget. 
  3. Executive Homes are seeing a Buyers Market. My next insight is that buyers are starting to have a lot more buying power for higher priced, executive style homes.  These homes are staying on the market longer and we have also seen an increase in the number of price adjustments and expired listings this past quarter.  If you are a seller, you will want to work with an agent to help price your house correctly from the beginning and position your home to appeal to these buyers.  You may need to adjust your expectations that you might not get what the house down the street sold for in 2022.
  4. Home supply is predicted to increase in 2024. I believe that we will see an increase in the supply of homes available in 2024 in all price ranges.  A lot of move-up buyers, homeowners who have outgrown their starter home, held off listing in 2023 waiting for interest rates to come down.  I believe we are going to see these homeowners finally make the move in 2024 to take advantage of the high demand for their home in combination with executive home prices cooling off.  As well, some homeowners may be in an unfortunate situation when their mortgages come up for renewal, especially those who purchased a home 3-4 years ago. I believe that there will be a lot of people reconsidering their current living situation which will also add new listings to the market.
  5. Buying and selling decisions impacted by monthly payments. And finally, homeowners are not making buying and selling decisions based solely on home price, they are more than ever considering all of their monthly costs, from gas to groceries.  Inflation and interest rates and property taxes are having a huge impact on monthly home expenses.  The best advice that I can give is to meet with a mortgage specialist and take the time to create a monthly budget before you start shopping for homes.

How does this impact you?

The bottom line is that whether you’re buying, selling or investing, your situation is unique and a general market update should be taken with a grain of salt.

If you want a market analysis for your home or you’re thinking of buying and want to know where hidden opportunities may lie, you can request a free no-obligation market analysis of your home or book a call with me to have a conversation about your options.

CLICK HERE TO EMAIL JESSICA.

And if you liked this blog post...

Be sure to check out my other real estate blog posts!  Like this one about buying or selling in the winter months in St. John’s.

Join The Discussion

Compare listings

Compare