An increase in available inventory and rising interest rates have combined to slow the Niagara real estate market.
In its monthly report, Niagara Association of Realtors said the number of sales decreased last month, down 14.8 per cent in April (707) from March (830), and down 34.7 from a year ago.
Niagara also saw a decrease in the average price of a home for the first time since October 2019.
The benchmark price in the region — for a three-bedroom, two-bathroom home — decreased 8.8 per cent to $814,600 in April from $825,300 in March.
It remains, however, a 26.6 per cent increase from a year ago when the benchmark price was $643,200.
While the number of sales dropped, the amount of available homes on the market continued to rise, with a 6.9 per cent jump from last month, said association president Jim Brown.
“We are experiencing a drop in the number of sales … but we are experiencing a number of listings increasing,” said Brown, a St. Catharines broker. “The trends are indicating that, hopefully, we’re getting more towards a balanced market.”
The market in Niagara is a continuation of recent trends seen across Ontario.
Brown said inventory is “always” the No. 1 issue impacting the Niagara market, with the increase providing more options for buyers. But interest rate hikes are also playing a part, “which makes it more difficult for the first-time homebuyer.”
He said first-time homebuyers, searching in the $500,000 range, remain active, and although the market is not seeing as many offers as it may have been a few months ago, “we’re certainly still seeing the activity that goes along with that price.”
But for homes listed upwards of $800,000, the market is slowing down, and it likely will result in a fade away of some of the staples of the pandemic real estate era, such as presentation dates (when all offers were presented on a specific date).
“I think you’re going to see more conditional offers … and, of course, home inspections which are key for all buyers, you’re going to start seeing those as well,” Brown said.
A balanced market with allow for a more “normal” process in which buyers will be able to get all their “ducks in a row,” he said.
“I think it’s more of you bring an offer, give us 24 hours to work it over and go from there. I think that’s a trend that should be coming shortly.”