Real Talk, Real Estate: 2023 Real Estate TrendsReal Estate Resources
Real Talk, Real Estate:
2023 Real Estate Trends
Owning a home is perhaps the most significant financial and emotional investment you’ll ever make. The experience is exciting and can be overwhelming at times, but asking the right real estate questions, and seeking answers from a trusted team of professionals, will put your mind at ease.
What can you expect from the Ontario real estate market as we head into 2023? Discover common trends, best practices and key takeaways for buyers and sellers to keep in mind when making their next move. Interest rates and inflation continue to drive a market shift and unknown narrative going into the New Year. With that said, Muskoka remains a highly desirable community for many families to reside in or vacation, making on-and-off-water real estate relatively stable in today’s market.
1. What key real estate trends do you expect to see in 2023?
Real estate is hyper-local, so we need to be careful when we make a general assessment of the market. Each province is impacted differently. Currently, the GTA, GVA, Edmonton and Montreal are showing the highest decline in average sale prices, while the Prairies and Maritime provinces have experienced increases. Interest rates and inflation continue to be at the forefront, so until inflation and interest rates start to settle, consumer confidence will remain shaky. A ‘let’s wait and see approach’ is a common trend amongst many buyers and sellers as they decide on their next move.
2. How will these trends influence the Muskoka market?
There is a lot of positive real estate news in the headlines right now, with a recent article in BlogTO suggesting Muskoka home sales will increase by 6% in 2023. Although it is speculation, I find this prediction a little surprising. While we saw an uptick in median sale prices in October, November median sale prices and the number of sales decreased, and December is typically a quieter month. We shall see what numbers transpire! The two I’s (interest rates and inflation) have impacted and continue to influence the Muskoka market, and until both decline, perhaps stabilization of home prices is a more accurate prediction.
The most evident shift in market activity has been in the waterfront market. Cottages, pre-covid were seen as discretionary and not a need. We are falling back into that mindset, especially with travel open again, interest rates and the fear of a looming recession. For some, a cottage has taken a back seat, while others are back on the hunt after pausing during the past two years of heightened real estate action.
With buyers returning to a pre-pandemic mindset of a cottage being a want, not a need, the urgency for these properties has dissipated. From the residential housing point of view, we continue to see families and couples move to Muskoka from the city. They are just more selective and cautiously negotiate prices and conditions.
3. Housing costs and availability have been ranked top social and political issues in Canada. How do these issues affect the Muskoka region and how is the housing crisis being addressed in our communities?
Muskoka is not immune to the housing and real estate challenges faced by many right now. Many other Realtors (not local to Muskoka) I speak with regularly, are very surprised to find out that our median sale price for off-water freehold homes is sitting around 700k. Locally, there has been talk of housing initiatives, but we have a long way to go. Housing prices (like everywhere) increased dramatically over the past two and a half years and many of our local population just do not have the incomes to afford housing, especially combined with the increase in interest rates.
4. With the pandemic behind us, are families still moving from cities to the Muskoka region?
They are, however, not to the extent they were. In my experience, some considering a move to Muskoka have faced challenges selling their GTA home, or find out they won’t get what they thought they might, so their move is on hold. Muskoka does continue to be a desirable destination for both full-time and seasonal residents, and I don’t see that changing. It is a fabulous place to live!
5. Do you believe we will remain in a sellers market in the Muskoka region? Does this relate to on-water and off-water properties?
The scales are not necessarily tipped in favour of sellers anymore. Despite relatively low inventory, there are also fewer sales. Generally, buyers are more patient in making their next move. They are likely to wait if they feel a property is priced too high and are putting conditions back into offers, potentially including the sale of their home to buy. Back to a “normal” market so to speak!
Frankly, buyers are done with inflated pricing for both on-water and off-waterfront properties. The successful sales we are experiencing now are homes well-priced for sale, selling on average 92%-95% of sale to list price. Multiple offers are still occurring but not near to where there were. We are not in a market for seller to “test the waters”.
Overall, the road is likely to be bumpy for the next several months, however, I am confident we will see a more balanced, healthy market in 2023. At the end of the day, most real estate transactions are a result of life changes, and life changes everyday. People will always need to buy and sell.
Do you have a real estate question you are seeking advice and guidance on? Let’s connect!