The impact of higher interest rates is being felt as the number of home sales in Orangeville in the month of July was very small. With the low number of sales, inventory levels continue to rise however prices have proven to be resilient holding at a similar level for the last three months of low sales number and prices continue to be higher than the same period of last year. Let’s take a dive into the numbers
The Month of July 2022
In the month of July, there were 75 homes listed for sale this is a 25.0% increase over the 60 homes listed in July 2021 and is at the ten-year average for the month of July.
25 homes sold in July this is a very low number of sales and is 52.8% lower than the 53 homes sold in the same period of 2021.
With 25 homes sold and 75 new listings, the Sales to New Listings Ratio (SNLR) for the month of July was 33.3%. With the SNLR under 40%, this is an indication of a buyer’s market and is expected given the decline in sales.
The Average Sales Price of a home in Orangeville in July was $887,592 compared to the average of $754,975 in July 2021 this is a 17.6% increase over last year. Given the low volume of sales, I am surprised to see the average sales price hold up as well as it has. Despite being higher than last year the average sales price in July is down 15.4% from the peak in February.
The Average Sales Price to List Price Ratio for the month of July was 97% again this figure is lower than it was last year and earlier in 2022 but has held up well given the decreased number of sales.
The Average Days on Market for a home in Orangeville in July was 24 days which is much higher than what we have experienced over the last two years but is quite low from a historical perspective.
At the end of the month, there were 120 homes available for sale a 287.1% increase over the 31 homes available last year. The inventory of homes continues to grow due mainly to the low number of sales.
With 120 homes available for sale at the end of July and 25 sales during the month this indicates there are 4.8 months of inventory of homes available in Orangeville. With between four and six months of inventory generally pointing to a balanced market I would argue that with the speed that the inventory of homes has grown in Orangeville that while we are technically in a balanced market when looking at this metric, we are in reality in more of a buyers market in Orangeville.
Year-to-Date July 2022
There have been 670 homes listed for sale through the first seven months of 2022, this is a 12.2% increase over the 597 homes listed for sale in the same period last year.
At the end of July, there have been 342 homes sold a decrease of 29.9% from the 488 sales in the first seven months of 2021.
Year-to-date the Average Sales Price is $964,993 an increase of 23.1% from the Average Sales Price of $784,084 in the same period of 2021.
The Sale Price to List Price Ratio so far this year is 108% this ratio has been declining over the last five months.
The Average Days on Market year-to-date is 10, this number has been increasing over the last two months but due to the low number of sales, the year-to-date figure is quite low.
What Does All This Mean?
Interest rates have been the driving factor in the Orangeville Real Estate Market in 2022. As the Bank of Canada has increased rates the number of sales has been declining. Many buyers have seen their buying power declining and have taken a wait-and-see approach to real estate. So far prices have remained relatively strong despite the decrease in the number of sales and the increased choices for buyers.
Over the remainder of 2022, I would expect the current market conditions to persist with low sales volumes and I would expect prices to decline over the next few months. The Bank of Canada is set to deliver another interest rate announcement on September 7, and the expectation is for another increase in the interest rates to continue to combat inflation.
If you are thinking about selling your home, I do not see any reason for prices to increase soon so getting your home on the market sooner than later is probably a good idea. With the increased inventory of homes on the market, homes are taking longer to sell and buyers are being more selective about the home they will buy. Your home needs to stand out from the other homes available it is more important now to ensure that your home looks its best and shows good value for the price in the eye of potential buyers.
If you are thinking of buying a home know that there may be some downward pressure on prices in the short term but if you are buying for the long term or if you are in a position where you are selling and buying you now have more selection of homes to choose from and with the low number of sales you have more negotiating power than you have had in the last two years. It is important if you are thinking of buying that you set a budget and that you have some discipline and don’t overextend yourself as there is some uncertainty in the economy.
If you would like to know more about what is going on in the market and how this impacts your specific situation, please reach out or book a call with me using the link below.
https://calendly.com/brianrooneyrealestate
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