February has come roaring back as sales rose 22% over February last year. More days of sunshine, warmer weather and melting snow is giving an early start to our local spring real estate market. 2015 is looking more like the right time to sell your home. Lower interest rates forecast for most of this year will keep Buyers in the market. Read on for more details.
Sales - The total sales for the 12 months ending February 2015 was at 1,020, up 28% from the 12 months ending February 2013 and still the highest volume of sales in the last 7 years since 2007 and up slightly from last month’s 26% increase.
Inventory - The average monthly inventory of single family homes dropped 14% to 537 for the last 12 months ending in February 2015, again, the lowest average inventory we have seen in the last 7 years. Inventory has not been this low since 2007, the year before the start of the recession triggered by the US banking crisis. The 12 month average dropped slightly less than last month’s 15% likely because more Sellers are realizing that this could be the year to sell their home and are calling their REALTOR® to get their home listed and sold.
Prices - Average median prices are still flat right now. At $345,135, average median prices for the last 12 months ending in February 2015 are virtually unchanged (up less than 1%) from 12 months ending in February 2014. This is another indication that the market remains cool. I continue to watch the statistics over the next 3 months with great interest.
Using an HPI (Home Price Index) is still the best way to determine the value of your home. The HPI considers all the sales of a typical house in a certain area and compares them to the same type of houses sold in the previous years. We find when we do an HPI that house prices are still doing different things in different areas and in different price ranges. I would be happy to do an HPI evaluation on any property you have or want to buy. Simply give me a call or send me an email.
Absorption Rate - The rate at which our inventory is being absorbed by sales was flat compared to last month. The average absorption rate of 15.36% over the 12 month period ending February 2015, is still the highest in the last 7 years and up slightly from last month’s 15.16%. At the end of February 2015, there was 12 months of inventory available on the market, up again from last month’s 11. This is considered more of a short term Buyers’ market favouring Buyers over Sellers with more inventory to choose from and Sellers having to adjust their prices down to affect a sale.
From these numbers, it will be interesting to watch how the spring market continues to unfold. The federal bank’s decision to cut interest rates was a direct attempt to stimulate the economy and we will see how that works over the coming months. I spoke with Tanis Yawney, a mortgage specialist at RBC who said that when the interest rate cut was announced, her phone started ringing and has not stopped.
At this point we still expect that the market over the next 6 to 18 months will be characterized by increasing sales and lower inventory moving towards a market that favours Sellers with more competition from Buyers and slowly rising prices. Prices will rise when consumer confidence gathers momentum and brings with it more Buyers.