June 15th 2023
The May sales figures are in and they paint a somewhat mixed picture. On the negative side, prices across the Region are down slightly from April. This reverses a three-month trend that saw figures rise around 10% from year-end 2022. On the positive side, both the number of listings and the number of sales are up significantly from last month. And that’s a very good sign. First, let’s look at price trends.
In the month of May, the average residential sale price came in across the Region at $705,929. That’s down $12,602 or 1.75% from the $718,531 registered in April. Not huge, but it does cut down the gains since year-end 2022 to $49,592 or 7.56%.
As is often the case, looking at the chart by municipality we see a real diversity in trends. Niagara-on-the-Lake, for example, showed a drop of $240,189 or 19.5%, Port Colborne/Wainfleet a drop of $65,641 or 10.41%, and St. Catharines a drop of $16,021 or 2.45% while Niagara Falls saw their average price go up by $18,444 or 2.81% and Thorold grew by $47,122 or 6.77%. Other markets like Grimsby and Welland showed very little change one way or the other.
Of course, especially as markets with relatively few sales like Niagara-on-the-Lake, these figures are much more reflective of buying trends than they are of price fluctuations.
One interesting stat that we don’t generally consider is the average list price. What are sellers expecting to get for the properties they are putting on the market?
As you can see there is quite a spread between the average sale price and the average new list price. The reality in the marketplace is that properties are selling at 98.3% of the listing price on average.
So either sellers are anticipating a pretty substantial increase in price or what is more likely is that the tendency is for the lower-priced properties to sell. Or perhaps a combination of the two. Either way, it’s something to be aware of moving forward.
But let’s move our focus ahead to the number of units sold. In May a total of 735 residential properties were sold in Niagara. That’s up 142 units or 23.95% from the 593 registered in April. But what is really interesting is that it’s also up 120 units or 19.5% from May of last year. Amazing! For months we have been seeing sales trailing the previous year month by month by as much as 50%. And here we are in May 2023 outperforming the previous year.
Let’s see what that looks like on a graph.
Of course, last year was in free-fall after March, but you’ll see from the graph that years 2021, 2022, and 2023 all saw sales begin to decline after April. It’s nice to see the market gaining strength in May. Of course, only 2020 after the devastating onset of Covid saw the market activity increase beyond May. The next month or two will be interesting to watch.
And one final piece of the puzzle is inventory. How are we doing with the new inventory? Through the late winter and early spring, we saw listings coming in at a much-reduced rate compared to the norm for that time of year. No doubt that lack of inventory played a role in seeing the price increases that we did. But listings have come on to the market at a much faster clip in May up 342 or 34.5% from April and comparing very favourably to an April/May increase of only 93 or 6.7% in 2022.
The added inventory should stimulate buyers to enter the market in greater numbers while increased choice, could bring about a downward movement in price. Exactly what we saw happen in May. So, two generally opposing forces, increased numbers of buyers and increased numbers of properties to choose from are at play. It should make for interesting dynamics in the days ahead.