Vol.7:1 Where Things Stand: The Current State of the Winnipeg Real Estate Market
The Winnipeg real estate statistics for 2022 have just been released and they tell the story of how a red-hot sellers market took an abrupt downturn mid-year, eventually coming to rest in December in what the Winnipeg Regional Real Estate Board (WRREB) is calling a balanced market.
January 2022 started out strong, continuing the trend of historically low inventory and historically high demand that has been the hallmark of our pandemic market.
The average sale price then was $401,216. By May, that had rocketed to $454,833.
Shortly after that, however, rapidly rising interest rates, rising inflation and a sudden influx of new listings combined to pour cold water on the Winnipeg market - in December 2022, the average sale price had fallen to $378 ,978, lower than where it had started out at in January, and almost on parr with where it had been a year ago.
So what does this mean for buyers and sellers who are trying to navigate the current market?
Here are the 5 takeaways that strike me as most relevant:
1) Sale prices in today’s market are 7% – 10% lower than they were at their highest point in the spring, effectively clawing back the gains of the year and leaving prices roughly where they left off in December of 2021.
2) Lower sale prices are disappointing to sellers who had their homes appraised in the first half of 2022, but the silver lining is that despite this slow down, sale prices are approximately 20% higher than they were pre-pandemic, still a significant gain in equity.
3) While lower sale prices are a relief for buyers, they are unfortunately offset by higher interest rates, higher stress test qualification rates and overall less buying power. (Note to Buyers: make sure you have checked in with your mortgage broker since the last rate hike to find out what your new mortgage ceiling is.)
Not sure what the stress test it? Click on the link below for an explanation: The Canadian Mortgage Stress Test In 2023 - Loans Canada
4) With more inventory and less competition, the wild bidding wars are gone - the rare property sells over its list price with most now selling below. Less competition also means that the offers date has largely been replaced by “offers as received,” which introduces a time pressure into the process. Time is now of the essence - there is no waiting until the weekend to see a house that you are interested in because “offers as received” means that the first buyer to write an acceptable offer gets the house.
5) Finally, a further significant by-product of having no competition is that buyers can expect to write a home inspection condition into their offer without it being thrown out.
Everything above references the resale of single family homes only. The condo market, on the other hand, is a different story altogether. Prolonged hot home sales breathed some life into the Winnipeg condo market for the first time in years and continues to offer a viable option for some of the buyers who have been priced out of the housing market – the current average sale price is approx. 6% higher than they were pre-pandemic.
I will close by saying that while I understand the temptation to call our current market a balanced one, it feels more to me like a market that is holding its breath, waiting to see what’s going to happen next with interest rates and inflation.
Regardless of what happens, the best way to hedge your bets as a buyer in any kind of market is to make sure the home you purchase has a high value proposition, meaning that it scores high on the enduring features that buyers regard as valuable.
For sellers, my best advice is to take extra care in the preparation and grooming of your property before bringing it to market.
For all other homeowners, my best advice would be to treat the maintenance and upgrading of your home as if you were planning to sell because the reality is that if everyone who thought they were in their forever home actually were, there wouldn't be much of market.
If you are looking for clarity on your options as a potential buyer or seller, don’t hesitate to get in touch - I would be happy to answer your questions and discuss potentials.
Warm Regards, Wendy