This winter may be one of the fiercest we have faced in recent history, but it did not deter the serious buyers as they braved the harsh conditions to purchase 4,135 homes, slightly down from last year’s 4229 sales.
What the snow did affect was the number of homes that were listed for sale. There were only 11,903 homes listed for sale versus last year’s 14,231. In other words, inventory was down by 16%. This lack of inventory created multiple offer situations and resulted in January’s average selling price of $526,528 – up by more than 9% compared to $482,080 in January 2013.
Why such a big increase in prices? The first reason as I mentioned is low inventory. On top of this, the banks lowered their interest rates, which spurs purchasing. When supply is low and demand is strong, prices increase.
On a larger scale, the major change that is occurring is the recovery of the US economy. Analysts are reporting that real estate prices have recovered and are 15% below their height in 2007. (The only exception is Florida, where its 30% below its peak). This recovery has sparked the Canadian/US exchange rate to fall to $1 Canadian to .90 US with some predicting it will drop further to .80 cents. The lower exchange rate will stimulate our economy through tourism and of course exports, which is a good thing as a Canadian living at home, but makes it more expensive when we travel!
With the economic boost, there will be more jobs and more buyers entering the market, so real estate investment is still a great opportunity. If you are considering it, or know of a friend who is, let’s get together and talk!
Have a great month!