Sellers beware?

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This article was published 02/10/2022 (717 days ago), so information in it may no longer be current.

Residential sale prices in Winnipeg will decrease eight per cent this fall in comparison to last year, according to a recent Re/Max Canadian housing market report.

The national report, released Wednesday morning, says it expects sale prices across the country to drop 2.2 per cent on average in the last four months of the year. Manitoba’s capital is projected to see the second-sharpest decline behind Barrie, Ont. (10 per cent).

“This market moderation comes on the heels of rising interest rates, record-high inflation and broader global and economic uncertainties that have impacted consumer confidence and market activity,” the report states.

A survey commissioned by Re/Max Canada revealed 44 per cent of Canadians agree that rising interest rates are compelling them to hold on buying a property this fall, while 34 per cent say they won’t hold.

In that same study, 25 out of 30 Re/Max brokers and agents say rising interest rates have affected activity in their local residential market this year, with some indicating that this has been the biggest factor affecting homebuyer and seller confidence — a trend that is likely to continue for the remainder of 2022.

But Winnipeg’s market is its own beast. For that reason, local market analysts and real estate brokers are urging people not to panic.

“I just think that’s a little harsh, in my view. I think we’re going to be less than that. Maybe half of that, three to four (per cent),” said Peter Squire, MLS market analyst with the Winnipeg Regional Real Estate Board.

“It’s certainly possible that the average for the last four months will be less than what the average price was for that property type in 2021, but I don’t think to the extent that they’ve indicated in their report.”

Squire emphasized that people need to be conscious of reports comparing any market to that in 2021, a year in which Winnipeg saw record-shattering numbers and double-digit price increases. That period made up the majority of 13 consecutive record-breaking sales months throughout the pandemic, an unprecedented streak that started in 2020 and stretched through June 2021.

“You’re really comparing yourself against the best year ever,” Squire said.

The booming market continued through the fall of 2021 and through much of 2022. Winnipeg’s average residential sale price this year (Jan. 1-Aug 31.) is $427,402, up 11.4 per cent from the same time last year, which produced a $383,510 average sale price.

Soaring price tags have changed the expectation of buyers and sellers, but with the former less motivated to jump into a new home and more listings continuing to show, Squire conceded the market is slowly shifting in the buyer’s favour and could continue to do so in the last four months of the year.

“We’re now coming back to what would be considered a more normal market. It’s not going to be our best fourth quarter by far, given what’s happening. But the overall year will still finish as our third-highest MLS sales year on record,” he said.

“I think the good part of this is that we’re in a better position in terms of seeing our affordability come back to where people want it to be in terms of prices.”

Rena Prefontaine has noticed the normalizing market has tamed some prospective sellers.

“It honestly really depends on the motivation of the seller. If they have to sell because they’re being transferred or need a bigger house, need a smaller house, they’re still going to sell, it doesn’t matter what the prices are doing or what time of the year it is,” said Prefontaine, a broker for eXp Realty in Winnipeg.

“But the ones who are just, ‘I’m thinking of selling maybe to get out of my mortgage and do whatever for a little bit,’ those people, I think, tend to be holding off a little bit.”

Prefontaine, who has 70 agents under her umbrella, said the market has changed drastically even since April, a time she calls “the wild west.” To avoid rattling the perception of her selling clients, she often draws on the markets in 2019 or 2020, though the value of homes are different.

“I think the biggest message we can ever give our sellers is: if you price your home right, it will sell,” she said. “It’s managing the expectations and pricing the home to what the current conditions are, and it will definitely sell. Gone are the days of the multiple offers, but if you price correctly, it’s in a desirable neighbourhood, your home is in good shape, it shows well, it’s gonna sell. It may sell over list (price), it may not.”

“We are seeing more listings, at least, on the market. And I think now the correction is correcting people’s mindset as far as, ‘Oh, well, somebody told me my house should be worth this.’ It’s not to look necessarily just month over month, year over year, but kind of get a picture of what the market’s been doing over the years.”

jfreysam@freepress.mb.ca

Twitter: @jfreysam