Condominium sales in Barrie have been quite slow this fall compared to the same time last year.
The average days on market grew substantially as sellers needed time to adjust their expectations while the real estate market continued to shift. As the market slowed further, many sellers were required to reduce their list price multiple times prior to securing a firm transaction.
Last month, 25 condominiums sold in Barrie, including 17 condo apartments and eight condo townhouses.
The average sale price for a condo apartment in November was $566,376 and the average days on market to sell decreased to 47 days, down from 69 days in October.
This shows sellers became more realistic with their original list price as Barrie moved further into the fall market. Rather than starting high and going through a series of price reductions, which was affecting the length of time a property would sit on the market, sellers were simply pricing competitively right from the beginning.
Barrie saw a similar trend in the condo townhouse sector. The average days on market to sell dropped from 94 days in October to 66 days in November. Sellers started to understand the market had shifted toward a more balanced state and they needed to adjust their expectations. With the increase in properties for sale on the market, it was important for sellers to continue to stay competitive against other sellers if they wanted to find a buyer within a reasonable amount of time.
The average sale price for a condo townhouse last month was $534,800 and units were selling for 98 per cent of the original list price. Although the average sale price had come down from the peak of the market in April, the average sale price was still recorded as higher than November 2021.
The question people keep asking is: Will there be a correction?
What do we need for a market correction to occur?
1) A ‘price bubble’ – that is usually defined as double-digit price increases in three consecutive years.
2) People selling their properties at any price – because of rising mortgage arrears, caused by a spike in interest rates or a jump in job losses.
3) Properties not selling that are located in areas where no one wants to live.
We could very well experience numbers two and three this coming year.
If interest rates continue to rise in the new year, demand to purchase property could decrease based on buyer affordability. Higher rates make it more expensive to purchase a home so any rate hike could have a direct impact on one’s housing budget.
In addition, there could be some challenging times ahead for current owners whose mortgage is up for renewal in 2023. Their new rate will be double the interest they are paying now and many might not be able to afford their new payments. This could force some homeowners to put their house on the market causing a potential increase in inventory, which could soften the market further.
Demand from out-of-town buyers to live in Barrie has decreased tremendously over the second, third and fourth quarters of 2022. This was primarily influenced by the reopening of the economy where many people no longer felt the need to move out of the Greater Toronto Area (GTA).
The rise in gas prices also had a large influence on the demand for real estate in Barrie, as it forced many people to rethink buying a home with a longer commute to work.
Although there are not as many buyers in the market as there once was, one needs to remember that there will always be a demand for condominiums. Condos are an entry-level property type where most first-time buyers and investors start. Condo living is also a lifestyle choice made by those who would prefer a turn key, low maintenance home and community socials at their doorstep. Because condominiums are one of the most affordable property types available for sale, there will always be buyers looking in this sector of the real estate market.
There are currently 76 condominium units for sale in Barrie, including 65 condo apartments and 11 condo townhouses.
