DURHAM REGION - February 7, 2018 - Durham Region Association of REALTORS® (DRAR) reported 470 residential transactions in January 2018, a slight decrease from December 2017. January saw an increase in listings of 954 from 711 in December. There is 30 per cent increase year-over-year from January 2017, where there were 735 listings. Amid the new mortgage ‘stress test’ rules for buyers that came into effect January 1st, there has been a drop in sales but an increase in listings.
January’s average selling price was $578,645, which is a stable increase from the previous month, and a minor decrease over the same month in 2017 at $608,417. Homes were sold within an average of 30 days on market for January 2018, in comparison to 15 days in January 2017. However, we still have strong pricing with 98 per cent Sale Price to List Price (SP/LP) and a healthy Sales to New Listing Ratio (SNLR) of 49.3 per cent, further indicating that Durham Region continues a strong, balanced market.
The new ‘stress test’ rules require that borrowers qualify for mortgages at interest rates 2 per cent higher in order to still afford their monthly payments should interest rates rise. This was expected to moderate demand by qualifying loans more firmly, which has lowered the amount buyers can finance.
Our strong local economy and expected population growth will result in sustained household growth in Durham Region.
The Toronto Real Estate Board (TREB) released its outlook for 2018 on January 30th. The outlook pointed to a slower start to 2018, especially compared to the record-setting pace experienced a year ago. As we move through the year, expect the pace of home sales to pick up, as the psychological impact of the Fair Housing Plan starts to wane and home buyers find their footing relative to the new OSFI mandated stress test for mortgage approvals through federally regulated lenders.
It is not surprising that home prices in some market segments were flat to down in January compared to last year. At this time last year, we were in the midst of a housing price spike driven by exceptionally low inventory in the marketplace. It is likely that market conditions will support a return to positive price growth for many home types in the second half of 2018.