There has been a 10 per cent drop in single family dwelling sales since the start of the year, as real estate activity dipped once the full effects of the restrictions were put in place due to the COVID-19 pandemic.
The first quarter performed ‘statistically well’ but the full impacts on sales and real estate activity were felt in the second quarter, according to Jason Wheeldon, a local realtor.
For example, in April, sales were down 65 per cent, with only 12 single family home sales as compared to 30 in April a year ago. Sales improved in May, however, activity was still down 25 per cent.
Average sale price in Cranbrook is currently $362,660, up three per cent from this time last year, while single family dwelling units average 49 days on the market in 2020, as opposed to 62 last year.
Real estate demand is determined by supply and demand and forces within the market, according to Wheeldon.
“COVID-19 is definitely a force that has reduced demand in housing, but for how long, we don’t know,” said Wheeldon.
As for what’s currently on the market, Wheeldon says there are 79 single family listings right now, adding that May saw 91 homes listed.
Based on an absorption rate of 17.5 homes per month, Wheeldon estimates Cranbrook has approximately 4.5 months of housing inventory.
“This reflects a balanced market and after nearly four years of price appreciations, has moved the local market into balance,” said Wheeldon. “Moving forward, and as the pandemic continues, the local market needs to be monitored carefully for supply and demand.”
Wheeldon predicts a market correction, pointing to a report from the Canada Mortgage and Housing Corporation which anticipates a decline in housing starts and existing home sales throughout 2020.
“A market correction is always a typical part of the real estate cycle and Cranbrook will have a correction,” said Wheeldon.
The last correction occurred after the 2008 global recession when home prices in Cranbrook declined by approximately 13 per cent over four years.
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