St. John’s Metro Real Estate Market Update for Q3 2023.
I will be focusing my data on St. John’s Metro. This includes St. John’s, CBS, Mount Pearl, Paradise and Eastern Extension Areas. I prepared these Statistics from data available on October 2nd, from NLAR’s MLS System. And as always, I am not an economist but I will provide my insights as a realtor in this update.
Average Sale Price
Starting off, the AVERAGE SALE PRICE for a residential home in St. John’s Metro was $367,567. This number is up from both the previous quarter and last year.
There was an average 1,442 ACTIVE LISTINGS available each month last quarter The number of active listings available for buyers trended up month over month in 2023 but took a little step backwards in September. However, we are still down year over year.
There were 1336 NEW RESIDENTIAL LISTINGS in the third quarter. This number is up slightly from the second quarter and from this time last year. We have been experiencing a 10 year low when it comes to new listings coming to market so it is positive to see these numbers begin to increase.
And, there were 833 HOMES SOLD in the third quarter. Although this number has increased from the beginning of the year it is still down from last year. The supply of homes being down makes a huge impact on the overall number of homes being sold.
Months of Supply
Speaking of supply, there was 5 MONTHS OF SUPPLY available in St. John’s Metro at the end of the third quarter. We saw a low of 4 months in August and right now we are at the same level of supply as this time last year. This is technically a balanced market. However, since months of 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. And since our overall sales volume in St. John’s metro is low right now, it is appearing like the market is balanced even though in some areas and price points it is acting much more like a sellers market.
Days to sell
If you are wondering how long it’s taking properties to sell? On average in the third quarter it took 44 DAYS FOR A HOME TO SELL in St. John’s Metro. As we analyze the data a bit further we can see that homes under $400,000 are selling on average in 41 days while it is taking homes $400,000 and above over 50 days. So the market for those higher end, executive type homes are not moving as quickly.
List to Sale Price Ratio
And finally, the average LIST-TO-SALE PRICE RATIO was 99.9% in the last quarter. That simply means that on average, properties are selling for asking price.
Interest Rate Update
Before we get into my market trend insights from the third quarter, let’s take a quick look at INTEREST RATES. Currently, for a five year fixed mortgage, interest rates are 5.84%.
Will Interest Rates Drop Soon?
The number one question I have been getting this year has been will interest rates drop soon? And this is what I tell people. 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.
If you’ve been to the grocery store lately, you know inflation is high. 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 4%, it has been as high as 7% over the past year and their goal is to bring it down around 2%.
Lower Rates = More Buyers
This would lead the way to a lower interest rate, MAKING IT MUCH MORE AFFORDABLE for you to buy a home. This is such good news… right? Well… it’s mostly good news. It’s certainly nice to know WE ARE HEADED IN THE RIGHT DIRECTION and there is a good chance of lower interest rates again. BUT with lower rates comes… MORE BUYERS! Which means more housing competition for the limited inventory that we have available.
My Market Trends Insights
- First of all, if you can afford a payment at a higher rate, now is a great time to buy. It may still take a year or two for interest rates to come back down and unless the supply of homes available increases between now and then I would predict home prices will continue to rise with this increase in demand. At least until the supply of homes available comes up to meet demand. And if rates do happen to go down you can take advantage of the lower rates when it’s time to renew.
- Second, buyers are starting to have a lot more buying power for those more expensive homes. These homes are staying on the market longer and we have also seen an increase in the number of price adjustments 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. If there are less buyers for more expensive homes, you have to make sure that you position your home to appeal to these buyers.
- Next, if you are a buyer, homes under $400,000 price point there is a lot of competition. If you see something you like, there are probably a lot of people looking at that same listing. A nice home in a desirable area is still receiving multiple offers so you have to make sure that your offer is compelling.
- The average home price is up this quarter but remember this is an average. Real estate is local, and what is happening in one area of town may be different from another. There are different micro markets everywhere. If you are a buyer, do your research before placing an offer so you are not overpaying for a home.
- And Finally, don’t make your buying and selling decisions based solely on the home price, you have to consider your monthly payment and the impact that interest rates and inflation are having on monthly expenses. The best advice that I can give a home buyer is to get pre-approved and shop within your budget.
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.