March 13th 2025
Now that the figures are in for February, they confirm what realtors were learning from experience. The real story is not what’s happening to prices but rather what is happening to activity in general. Unit sales were very soft in January and that trend has continued on into February.
As you can see across the Region the Board registered 368 sales in February. That’s up 44 units or 13.6% from January. On the other hand, however, that figure is down 178 unites or 32.6% from last February. That’s significant. Normally January is soft. But the market traditionally picks up in mid to late January and February comes in much stronger. Last year, for example, January tallied 371 units. But February came in at 546 units. Up 175 units or 47.2%. By comparison, this year’s month-over-month increase of 13.6% is pretty meagre.
So, what is going on? That’s the $64,000 question. Some people speculate it’s the weather. And I’m sure weather did play a part. I mean compared to last year, this February was pretty brutal and nobody enjoys being out shopping for houses with sleet dripping off their foreheads. But I don’t think weather played a huge part. I believe buying hesitancy is a result of uncertainty in the marketplace. This holds especially true in real estate. When people are confused, they tend to sideline themselves and wait. And we’ve had plenty to be uncertain about. Provincial elections. Shutting down of parliament in Ottawa with the looming possibility of a spring election federally. A new rogue president in the U.S.A. imposing tariffs on Canada/U.S. trade, and sabre rattling internationally. People are scared. Uncertain if they’ll still have a job. If they will be able to pay their bills and buy groceries. So, they procrastinate.
Of course, the media doesn’t help. I don’t generally watch the news. I don’t need the negativity. But the other day on my way to a sports channel I passed a CTV news clip. What they were saying was that in a recent survey done in both Canada and the U.S. 25% of citizens believe we are heading into a recession. We hear the words ‘heading into recession’ and we panic. But wait a minute. If 25% believe we are heading into recession, that means 75% don’t. They believe things are getting rosier. Great times ahead. So why don’t they tell it that way? “75% of people surveyed believe we are headed for increased prosperity ahead.” Because negativity sells newspapers and increases ratings. Keep in mind these 25% are ‘glass half empty’ people. They believe the sky is falling. The earth is flat. That clip isn’t news. It’s fear mongering. But it will feed a lot of people’s uncertainty.
There’s no doubt in my mind we hit a real estate recession around April 2022. That was the watershed between the Covid boom and the post-Covid burst. So, this April will complete 3 years where we’ve been mired in a sluggish market. We’ve been here before: 1980 and 1990. And it takes a bit of time to climb out. But we know that we will. And it’ll come back stronger than ever. I can’t predict when, but it’s only a question of time.
So, on to prices. You’d think with sales as sluggish as they have been, that prices would be taking it on the chin as well. But that hasn’t been the case.
You may recall last month we saw January prices had dropped to $646,689, down $31,585 or 4.66% from December. Well, now into February and even with a very sluggish volume of sales, prices are up $13,245 or 2.05% from January. And although it’s not uniform across the Region, more municipalities are up month-over-month than down.
And this is interesting. Last year the increase from January to February was only $7,703 or 1.18%. So, price gains so far in 2025 exceed those for the same period in 2024, in spite of lagging sales. It speaks of the strength in the marketplace in spite of buyer uncertainty.
I’m with the 75%. Good times ahead.