January 15th 2025
Last month, as you recall, we were a little light on data in our market report. This was because our local real estate board, The Niagara Association of Realtors, was in the process of changing MLS service providers and it was taking time to implement the new systems and getting all the data transferred over.
Well, that process apparently has not been completed. So, the average sale prices throughout the Region, by municipality are still unavailable for the month of November and now December.
Having said that, although the average sale prices are not available, the HPI is. HPI as you may recall is the average sale price of a specific type of property: 3 BR bungalow, attached garage, 50-100 years old, etc. It’s an attempt to provide a more uniform standard that compares comparable products rather than buying trends. And it’s not a bad idea really. So why don’t I typically use it? Because it reflects a change in the way statistics are being compiled. And because I want to be able to go back years and years, including all the years HPI was not being considered, for the sake of consistency, I need to stay with averages.
However, because we do not have averages to work with for November and December, I am going to look at HPI numbers currently available. This will be specifically over the past 3 months but also with a glimpse of the numbers spanning the last 5 years.
While the above chart isn’t totally complete in the time periods presented, it does illustrate some general trends. Looking at the regional averages we see December 2024 came in at $633,300, that’s down slightly $6,400 or 1.00% from November and down $18,500 or 2.84% from its mid year peak.
But if we go back a full year, we see that in the first 6 months the average price in the Region grew by $33,400 or 5.40%. And while much of the early gains were erased in the last 6 months, we still ended the year up $14,900 or 2.41%.
So, two shifts in annual trends are emerging. Yes, the market strengthens in the first six months of the year. Prices increase. And then prices erode in the last half of the year. That is a recurring trend. But first, the price slide was more gradual in the last half of 2024 than it has been in previous years like 2022 and 2023. And secondly, overall prices have increased somewhat over the course of the year. The gains are more substantial than the losses. That’s encouraging. Have a look at these numbers.
Now these are all HPI averages, so the comparisons are consistent. In 2022 for example, in the last couple of months of the year, average sale price dropped by 5.02%. That’s a lot. But of course, 2022 was adjusting downward after the Covid era. Prices were in free fall. So, what happened in 2023. Same period October-December. Prices dropped by 4.35%. Almost as much.
Now look at 2024. Same period. This time the price drop is much less severe. Only a decline of 0.81%.
We look at these figures. We try to recognize trends, with the hope of being able to predict the future. Of course, nobody has a faultless crystal ball. But what we are seeing is a market that is stabilizing. The free fall of 2022 is behind us. As is the correction of the latter half of 2023. 2024 has presented a soft landing. It certainly looks like a rebound is on its way.
In 2023 we saw substantial price gains in the first half of the year. That happened again in 2024. We’re talking in the neighbourhood of $100,000 in increases. Now with the consistent drop in interest rates and the corresponding increase in unit sales, there is no reason not to expect substantial price gains to be realized in 2025. The difference is, what will happen in the latter half of 2025. Yes, there may be some settling but considering the soft landing of 2024, we can expect much of the price gains we will experience in the early months of the year to hold till the end.