Market Update May 2021
Economists are like psychics. They collect data, analyze it and then make predictions that are more often than not, wrong. In fact, did you know that economists have predicted nine out of the last five recessions? (lol) Much like psychics, economists learn to downplay what they get wrong and make a big deal when they guess something correctly.
Last May, the Canada Mortgage and Housing Corporation (CMHC) made headlines with a forecast that Canadian home prices could fall up to 18 percent over the next 12-month period as the pandemic decimated the real estate market. But, in case you haven’t been paying attention, the opposite happened. Prices soared up to 30% year over year as the pandemic created unprecedented buyer demand. They continued to climb to new highs across the country in April.
Closer to home there were 1380 sales in The Quad Cities (KW, Cambridge & Guelph) for April, down 12% from March. The average time on market was 12 days which is slightly longer than the previous month. The average sale price for April was about $740,000 or $488 per square foot. Happy sellers received on average 113% of their asking price which means that virtually every home attracted multiple offers. Going forward into May there are 700 active listings which represents about 2 weeks worth of housing inventory. Even though the market slowed down slightly in April, this is still an extreme seller’s market so homes should continue to sell quickly and over asking price.
The CMHC’s most recent forecast in its Housing Market Outlook for spring 2021, the agency is singing a different tune. For Canada’s resale housing market, it’s predicting a 10.7 percent to 14.4 percent price increase compared to 2020’s national average home price. I’d say that’s a pretty safe prediction!
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