The Canadian Real Estate Association (CREA) today reported that there are a record low number of homes for sale, across Canada.
This echos what the BC Real Estate Association has recently noted and what I discussed in yesterday's blog post. See my blog post: Lack of Listings to Start 2022.
CREA reports that there is less than a two-month supply of homes for sale, assuming the current sales pace continued. The long-term average for this metric is just over a 5 month supply of homes available. Obviously, this means that this is an incredibly strong seller's market.
CREA stated that the MLS® Home Price Index (MLS® HPI) rose 2.5% month-over-month and was up a record 26.6% year-over-year in December 2021. This is essentially in-line or somewhat below what we have seen in the Fraser Valley, during 2021.
“There are currently fewer properties listed for sale in Canada than at any point on record,” said Shaun Cathcart, CREA’s Senior Economist. “So unfortunately, the housing affordability problem facing the country is likely to get worse before it gets better. Policymakers are starting to say the right things, but now they have to act to change this course we’re on. An aggressive national push to build more homes is what will address the issue, but it will probably have to be a greater amount of building than anything we’ve ever undertaken. A touch over the status quo won’t cut it.”
- market conditions changing undoubtedly hinge on more listings coming to market
- it's likely that a lot of demand is being pulled-forward by people with low mortgage rate pre-approvals in hand. These are people who want to buy before their rate holds expire and they might have to accept a higher rate hold.
- it may make sense for some buyers to hold off on making a purchase until later in the year, if and when, more active listings become available
- I agree that the housing affordability problem may indeed get worse before it improves
- There is no doubt that there is a crisis in housing supply, especially, considering the high immigration numbers forecast
- Homeowners may be sitting back and holding off on listing as they watch prices (and their equity) rapidly rise each month. There may be seller FOMO with respect to easy price gains.