Why home prices keep climbing even though sales are falling
Home sales in Canada fell a significant 14 per cent year over year in August, the Canadian Real Estate Association (CREA) reported Sept. 15. Great news, right? If sales are down, doesn’t that mean demand is weakening?
Not when it comes to Canadian real estate at this strange juncture in history. While some buyers may indeed be stepping away from the market with a mixture of frustration, sadness and disgust, the sales dip can largely be attributed to the lack of homes for sale.
New listings in August were 22.2 per cent lower than they were a year ago. That works out to about 18,000 fewer homes on the market — for just one month. So long as the number of houses for sale keeps shrinking, prices have only one way to go.
On the slightly less dreary side, fewer homes for sale means fewer bidding wars. A smaller number of aggressive sales kept the average price of homes from exploding in August with the same intensity seen earlier this year. If you’re a buyer, here’s what the past month did to your chances of landing a home.