Home sales in Waterloo region down by almost 50 per cent compared to this time last year: WRAR

Home sales in Waterloo region have slowed to nearly half of where they were a year ago.

The Waterloo Region Association of Realtors (WRAR) says 439 homes were sold last month, compared to 798 during February of 2022. Across the last five years, the number of homes sold in February 2022 is 31.5 per cent below average.

"Increased borrowing costs, coupled with a shortage of housing supply and strong demand, have put a strain on prospective buyers as affordability continues to be a top concern; however, home prices have remained stable for the past several months,” says Megan Bell, the president of WRAR in a media release.

The average sale price for all residential properties in Waterloo region last month was $758,698, down a quarter from the same month last year when it topped $1 million for a the first time.

“Limited supply and the small number of listings coming to the market continues to be a trend within the region,” says Bell. “There may be some hesitation for those considering selling their property due to decreased reported sale prices; however, with demand continuing to outpace supply and prices stabilizing, sellers are in a healthy position to make their move.”

Bell says while most prices have fallen around 20 per cent from their peak in February 2022, they remain significantly higher than they were three years ago.

There were 671 new listings added to the MLS System in Waterloo region last month, down 37.1 per cent compared to the previous year and down 24.8 per cent compared to the previous ten-year average for February.

The total number of homes available for sale in active status at the end of last month was 691, an increase of a whopping 75.2 per cent compared to February 2022, but it is still 38 per cent below the previous ten-year average of 1117 listings for February.

But WRAR explains some of the numbers can be misleading. While the inventory seems to be improving when you compare it to this time last year, Bell says inventory still is not where it should be. She says we're still far from a balanced market but slowly getting closer. She suggests buyers and sellers focus on the absorption rate which is a way to measure the rate at which available homes are being sold. In February 2022 the absorption rate was 0.2 and last month the rate was just over a month.

“So we are at 1.2 months of inventory. So if we if nothing else came onto the market, it would take us just a little bit over a month, pretty much, to sell everything on the market in our region. A balanced market would be three months of inventory. Anything over six months would be considered a buyer’s market,” Bell says.

It took on average 20 days to sell a home in February, compared to eight days in February 2022. The previous five-year average is 16 days.

Total residential sales in February included:

• 256 detached homes – down 45.3 per cent from same month last year
• 100 townhouses – down 33.3 per cent
• 55 condominium units – down 52.6 per cent
• 28 semi-detached homes – down 56.3 per cent