Woodstock Market Report - Year in Review (2022).
Tags: Stats, Market, Woodstock, Real Estate, Sales, Year in review, 2022, correction, average sale price, house value, home values, interest rates
The year started out with some of the craziest sale prices imaginable, culminating in a tremendous February. Anyone who timed their sale to be on the market between January and March of 2022 will be unlikely to repeat that kind of exceptional decision making! Lucky guess, or incredible timing? Who knows. All I can say is that February represented the absolute peak of the market in Woodstock.
For the THIRD year in a row, I honestly can say that if you had asked me back at the beginning of the year how I thought things would go, I would have predicted that the market would continue moving, at a muted pace. Values holding, and number of transactions steady if not decreasing slightly.
I would NOT have predicted the roller coaster ride we experienced last year!
The seller's market hit its fever pitch in February of 2022, before taking an absolute beating for the remainder of the year.
Let's take a closer look at some details from 2022....
Average Sale Price:
On an annual basis, the average sale price for Residential properties in the City of Woodstock ended the year at $690,769. This marked an increase in the average sale price of a surprising 10.99% over the same metric in 2021.
This chart shows a 22 year history of average sale price (Red line) and annual increase (percentage over prior year, grey bars). Despite what you may have heard, still not negative on the year - not by a long shot.
On a month by month basis, it becomes clear what has happened to average sale prices in Woodstock as rates began rising in March.
Peaking in February, with an average residential sale price of $824,602, and ending the year with a trough of $555,319.
Average Sale Price (Detached)
This year, the average sale price of Detached homes in Woodstock was $746,195. This was up an impressive 11.8% over last year.
Number of Sales
This represents the lowest number of transactions in a year since 2014, and a reduction of 22.8% from 2021.
Average Days on Market
Firstly, let's talk about Days on Market.
This is now a metric that you can see on Realtor.ca. But, it doesn't tell the whole story. As a matter of fact, I believe realtor.ca is misleading home buyers. On realtor.ca, there is a field called "Time on REALTOR.ca," and that reports "Days on Market, or DOM"
However, there's ANOTHER data field on the WITAAR MLS® system, called CDOM, or CUMULATIVE Days on Market. Cumulative days on market tracks the number of days the listing has been on the market in it's current listing cycle. Meaning, if the home has not SOLD, or been OFF THE MARKET for a minimum of 90 days, the CDOM tracks all of those days.
123 Whatever St. Listed April 1st for $799,900. On May 30th, the seller cancels the listing. On June 15th, it is re-listed by the same agent, for $749,900. The DOM counter (and subsequently the "Time on REALTOR.ca" field) is reset to ZERO. However, the CDOM counter, which AGENT'S see, but not BUYERS, remains at 60 days. This is the TRUE measure of days on the market.
This is what I ALWAYS report on.
For the year. we ended up with an average # of CDOM at 25. Almost double the metric from 2021.
But look at how it changed throughout the year!!!
A low of 8, and a high (December) of 69!! What a change!
Number of Active Listings
No. It's not. At all. Well it's up a BIT, but nowhere near where it COULD be.
What's happening now is that a lot of sellers (and buyers) are taking a wait-and-see approach to the market. This is causing buyers to make decisions a lot more slowly, or even deferring decision making into the future. Sellers, similarly, are reluctant to list their properties for reasonable asking prices, and sensing the slowness in the market, are refraining from listing their homes, unless absolutely necessary.
It's just a complete slowdown in all respects.
So what's the story with active inventory?
At the end of 2022, it looked like this:
What a change over last year. BUT, still remarkably low.
Here's an 11-year history of active inventory:
- Peaks in June 2011 with 550 listings. Troughs in Dec 2022 (and Dec 2020 / Jan 2021) at 14.
Supply vs. Demand
Yes, supply relative to demand has increased. Demand is down a bit, and supply is up a bit, BUT, as of year end, we are still in a seller's market. Believe it.
December saw a reasonable 2.83 months of inventory.
The Blue line represents the number of months of inventory in 2022, Red is 2021, and Yellow is the past 5 year average.
So this chart shows SOME relief, but, still a fundamentally a seller's market.
Sellers always wonder "What is the best time to sell my house?" It is natural to attach timing to a calendar. We have been trained, for whatever reason, to believe that spring is always the right time to sell. But fundamentally, the best time to sell something is when supply of that thing is low, and demand is high. This is a pretty rudimentary concept. The reason I put so much stock into this metric is because it allows me to answer that question with complete confidence.
If you look at 2022, statistically speaking, the best time to sell was in January/February. Now, interest rates are a HUGE factor here, but this is the third year in a row that the first quarter was the best time to sell.
This chart shows a 11 year history of average sale prices and active inventory (by month). Fascinating to put the pandemic spending spree and subsequent correction into context. You can see how we still have low inventory by looking at this chart.
Predictions for 2023
It makes me uncomfortable, but here goes.
It all boils down to rates. Rates are influenced (right or wrong) by inflation. Obviously we are all dealing with incredibly high inflation, and the governments favourite tool to tame inflation is manipulation of overnight rates. After 7 rate increases in 2022, inflation is beginning to respond. Dropping slightly, but remaining stubbornly high.
The Bank of Canada has 8 rate announcements scheduled for 2023. The first is in a couple of days, on January 25th. It is widely expected that it will be an increase. Many economists are predicting a 0.25% increase in rates, and then a period of holding.
I think holding is predicated on inflation continuing to fall, at current rates. Otherwise, rates will continue to increase, further diminishing sales activity in the real estate market, and erosion of sales prices (but not affordability).
Unfortunately, the collateral damage from increasing rates means that consumers feel the pinch, and jobless numbers are likely to increase. Two quarters of consecutive negative growth in GDP means a recession. We almost never know we are in a recession until it is well under way, but I fear that's where we are heading, if we aren't already there.
Anyway, I predict a continued erosion of sales prices for the first 2-3 quarters of 2023, drifting slowly towards stability by end of Q2, and into Q3. Unless rate increases continue, Q4 will represent a return to more normal conditions, with inflationary gains returning.
2024 is anyone's guess. :)
Do you need to make a Move?
If you are a Seller, having a strategy has always been important. Here's how my sellers have maximized on the current market trends:
Unfortunately we can't control the market, but we can work as hard as possible to capitalize on what it provides! If a move is in your future, let's chat today to get you started on your plans. Even if you don't want to do anything until summer or fall, starting your project early is a great way to optimize your experience.
If you're interested in a free consultation to discuss your real estate plans, shoot me a text and let's chat! 519-532-1295.
Thanks again, and happy new year!
Ben Sage | Broker | Cell/Text: 519-532-1295
RE/MAX a-b Realty Ltd., Brokerage
Independently Owned and Operated
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