The impact of COVID-19 has been widely felt across almost every aspect of our society and economy. The short-term financial impacts have already been seen in global stock markets and in the budgets of businesses and governments around the globe. Due to the lagging nature of the real estate market, the effects on the market were originally unclear, however there are now clear trends emerging in the Region of Waterloo.
There are 3 noticeable trends forming in the Region, these trends are also being reflected in real estate markets around the country.
- Downward Pressure on Prices
- Number of Sales Collapsing
- Growing Levels of Inventory
In February, median sales prices for the Waterloo Region hit an all time high of $542,500. This number represents a 17% increase from Feb 2019. However, since Feb 2020 we have seen two consecutive months of falling prices. Median sales price in April fell to $522,500, which represents approximately a 4% drop from all time highs. It is important to note that a significant amount of this drop took place in the last week of March and the rest in April. With the economy facing significant headwinds, this downward trend in median prices may continue for an extended period of time.
Number of Sales
The spring is one the strongest times of the year for the real estate market. Traditionally this time of year has the largest number of sales/transactions. In the month of April there were 346 sales in the region. This represents a 60% drop from Apr 2019 and March 2020. As you would imagine, the total sales volume in the Region also fell by 57%, from $442 million to $195 million.
Growing Levels of Inventory
This trend is not as pronounced or severe as the last, however it is something to follow very carefully. The median days on the market for the region rose from 8 to 14, a 75% increase. This means that homes are staying on the market longer, which leads to a rise in inventory levels. This is also reflected in the months supply of housing in the region which rose to 1.20. .